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    Towne and City Development Vs CA - Digest

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    Rowena Gallego
    This case involves a dispute over payment for construction services. The petitioner claimed to have paid the respondent contractor through checks, as evidenced by vouchers signed by the respondent. However, the court ruled that vouchers alone do not constitute sufficient proof of payment under the Civil Code, which states that checks only extinguish debt upon encashment. The petitioner failed to produce check originals or bank statements from the alleged payments about 5 years prior. Therefore, the court affirmed the lower court's ruling requiring the petitioner to pay the outstanding balance to the respondent contractor.

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    Towne and City Development Vs CA - Digest

    Uploaded by

    Rowena Gallego
    504 views3 pages
    This case involves a dispute over payment for construction services. The petitioner claimed to have paid the respondent contractor through checks, as evidenced by vouchers signed by the respondent. However, the court ruled that vouchers alone do not constitute sufficient proof of payment under the Civil Code, which states that checks only extinguish debt upon encashment. The petitioner failed to produce check originals or bank statements from the alleged payments about 5 years prior. Therefore, the court affirmed the lower court's ruling requiring the petitioner to pay the outstanding balance to the respondent contractor.

    Original Description:

    Oblicon - Article No. 1249 of the Civil Code

    Original Title

    Towne and City Development vs CA - Digest

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    This case involves a dispute over payment for construction services. The petitioner claimed to have paid the respondent contractor through checks, as evidenced by vouchers signed by the respondent. However, the court ruled that vouchers alone do not constitute sufficient proof of payment under the Civil Code, which states that checks only extinguish debt upon encashment. The petitioner failed to produce check originals or bank statements from the alleged payments about 5 years prior. Therefore, the court affirmed the lower court's ruling requiring the petitioner to pay the outstanding balance to the respondent contractor.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    504 views3 pages

    Towne and City Development Vs CA - Digest

    Uploaded by

    Rowena Gallego
    This case involves a dispute over payment for construction services. The petitioner claimed to have paid the respondent contractor through checks, as evidenced by vouchers signed by the respondent. However, the court ruled that vouchers alone do not constitute sufficient proof of payment under the Civil Code, which states that checks only extinguish debt upon encashment. The petitioner failed to produce check originals or bank statements from the alleged payments about 5 years prior. Therefore, the court affirmed the lower court's ruling requiring the petitioner to pay the outstanding balance to the respondent contractor.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 3

    G.R. No.

    135043

    July 14, 2004

    TOWNE & CITY DEVELOPMENT CORPORATION, petitioner, vs.


    COURT OF APPEALS and GUILLERMO R. VOLUNTAD (substituted by TOMAS
    VOLUNTAD and FLORDELIZA ESTEBAN Vda. De VOLUNTAD) respondents.

    Doctrine: Under Article 1249 of the Civil Code, payment of debts in money has
    to be made in legal tender and the delivery of mercantile documents, including
    checks, "shall produce the effect of payment only when they have been cashed, or
    when through the fault of the creditor they have been impaired."

    From the text of the Civil Code provision, it is clear that there are two exceptions to
    the rule that payment by check does not extinguish the obligation. Neither
    exception is present in this case. Concerning the first, petitioner failed to produce
    the originals of the checks after their supposed encashment and even the bank
    statements although the supposed payments by check were effected only about 5
    years before the filing of the collection suit. Anent the second exception, the
    doctrine is that it does not apply to instruments executed by the debtor himself and
    delivered to the creditor.
    Facts:
    Petitioner Towne & City Development and respondent Guillermo entered into a
    construction contract, whereby the latter undertake to construct several housing
    units belonging to different individuals; repair of several existing housing units and
    repair of facilities, all located in the Virginia Valley Subdivision, for a total contract
    price of P1,041,359.00. The agreement provides that Guillermo should be paid in full
    upon completion of the project in 1985, and was allowed by petitioner to occupy,
    free of charge, one of its houses in said subdivision pending completion of the
    project.
    After completing the project, Guillermo demanded for the payment of his services,
    which the petitioner refused. Thus, Guillermo filed a Complaint for Collection against
    the petitioner. In its Answer, petitioner averred that it had already paid Guillermo for
    his services and claimed that Guillermo is liable for unpaid rentals for his occupancy
    of one of the houses in the subdivision.
    The petitioner presented its Corporate Secretary (Rhoda Aguila) as its sole witness.
    She testified that she personally handed or delivered the case or check payments to
    Guillermo, who in turn acknowledged payments with his signatures on the vouchers.
    TRIAL COURT: ordering the defendant to pay the unpaid balance with 3% interest
    from the time of filing the complaint until full satisfaction.

    COURT OF APPEALS: affirmed in all respects


    Issue:
    Whether or not the vouchers and other documentary exhibits may be considered as
    proofs of payment
    Ruling:
    NO. Citing the case of PNB v. Court of Appeals, the SC ruled that while a receipt of
    payment is the best evidence of the fact of payment, it is, however, not conclusive
    but merely presumptive; neither it is exclusive evidence as the fact of payment may
    be established also by parole evidence.
    In the case at bar, petitioner has relied on vouchers to prove its defense of
    payment. However, as correctly pointed out by the trial court which the appellate
    court upheld, vouchers are not receipts.

    It should be noted that a voucher is not necessarily an evidence of payment. It


    is merely a way or method of recording or keeping track of payments made. A
    procedure adopted by companies for the orderly and proper accounting of funds
    disbursed. Unless it is supported by an actual payment like the issuance of a
    check which is subsequently encashed or negotiated, or an actual payment of
    cash duly receipted for as is customary among businessmen, a voucher remains
    a piece of paper having no evidentiary weight. (Emphasis supplied).

    A receipt is a written and signed acknowledgment that money has been or goods
    have been delivered,26 while a voucher is documentary record of a business
    transaction.

    The references to alleged check payments in the vouchers presented by the


    petitioner do not vest them with the character of receipts. Under Article 1249 of the
    Civil Code, payment of debts in money has to be made in legal tender and the
    delivery of mercantile documents, including checks, "shall produce the effect of
    payment only when they have been cashed, or when through the fault of the
    creditor they have been impaired."

    From the text of the Civil Code provision, it is clear that there are two exceptions
    to the rule that payment by check does not extinguish the obligation. Neither

    exception is present in this case. Concerning the first, petitioner failed to produce
    the originals of the checks after their supposed encashment and even the bank
    statements although the supposed payments by check were effected only about 5
    years before the filing of the collection suit. Anent the second exception, the
    doctrine is that it does not apply to instruments executed by the debtor himself and
    delivered to the creditor. Indubitably, that is not the situation in this case.

    Disposition: Petition is denied, CA Decision is AFFIRMED.

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