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G.R. No. 181560, November 15, 2012

Vitarich Corporation is the supplier of poultry meat for Chona Losins
food and catering business. Her account was handled by Rodrigo Directo and
Allan Rosa, and Arnold Baybay, all employees of the said corporation. In August
24, 1996, Directos services were terminated. On November 30, 1996, Rosa and
Baybay resigned. All three did not turn over documents pertinent to Losins
It appears that from July to November 1996, Losins order allegedly
amounted to P921, 083.10. On February 12, 1997, a demand letter was sent to
Losin. Losin on the other hand claims that she had an overpayment of P500,
000.00. She alleged that she issued checks that were collected by Directo.
However, it appears that three checks issued by Losin amounting to P388,
463.30 were dishonored for either reasons of Drawn Against Insufficient Funds
or Stop Payment.
Vitarich filed a Collection of Sum of Money against Losin, Directo, Rosa
and Baybay.
The Regional Trial Court ruled in favor of Vitarich ordering Losin to pay.
The complaint was dismissed against Rosa and Baybay. Directo who was at
large cannot be served with summons.
The Court of Appeals set aside and vacated the judgment of the trial
court ruling that both parties failed to prove their respective claims.
Who is liable to whom and for how much?
Losin is liable to Vitarich but only for P222, 434.96.

As a general rule, the one who pleads payment has the burden of proving
it. In this case, Losin, who pleads the affirmative defense of overpayment failed
to discharge that burden. She failed to present a single official receipt to prove
payment. All she presented were copies of list of checks allegedly issued to
Vitarich, a Statement of Payments made to Vitarich, and copies of the history
of her checking account with RCBC. These only serve as records of her
business dealings with Vitarich but not enough to prove payment.
Article 1249 the of the Civil Code provides that delivery of promissory
notes, or bills of exchanges or other mercantile documents shall produce the
effect of payment only when they have been cashed, or when the fault of
creditor they have been impaired. In the present case, it was not proven that
the checks issued by Losin were actually encashed by Vitarich as these were
actually dishonored. Thus, she cannot claim payment, much more,
As to the amount of Losins liability, the Court found out that Vitarich
claims six amounts which were not properly supported by Charge Sales Invoice.
Of the six amounts, two were covered by the checks issued by Losin but which
were not encashed because of Losins order to RCBC. The amounts are P93,
388.96 and P50, 265.00. The Court believes that Losin would not have issued
the checks had she not received the goods. Losin cannot be held liable for the
third check amounting to P144, 309.50 because Vitarich did not claim for such
Losin is also held liable for P78, 281.00. Although Vitarich failed to
substantiate this claim, the goods were admitted by Losin to have been
Lastly, Losin is made liable to pay the amount of P18, 281.00 because
this was duly proven. All other claims cannot be charged to Losin for failure of
Vitarich to prove that the same are chargeable to the former. Her total liability
amounts to P222, 434.96.
Since the obligation is one not arising from loan or forbearance of money,
but consists in payment of a sum of money, the legal rate of interest is 6% per
annum to run from February 12, 1997, the date when Vitarich demanded
payment from Losin until the finality of the decision. The rate of interest shall
increase to 12% per annum form finality until satisfaction, the interim period
being deemed to be equivalent to forbearance of credit.