Sps. Ricardo and Elena Golez v.

Meliton Nemeño AUTHOR: ONG

[G.R. No. 178317, 23 September 2015] NOTES:
TOPIC: Condonation or remission of debt
PONENTE: Villarama, Jr., J.
CASE LAW/ DOCTRINE: Art. 1272. Whenever the private document in which the debt appears is found in the possession of the
debtor, it shall be presumed that the creditor delivered it voluntarily, unless the contrary is proved. (1189)

FACTS:
 Nemeño is the registered owner of a commercial lot located in Molave, Zamboanga del Sur known as Lot No. 7728 and
covered by Original Certificate of Title No. 0-2,233 of the Registry of Deeds of Zamboanga del Sur
 31 May 1989-Nemeño entered into a Lease Contract over a portion of said lot with petitioners as "lessees."
 Pertinent portion of the contract:
“That, the Party of the First Part/Lessor hereby leased a portion of that Commercial Lot with an area of 12 meters by 7
meters to the Party of the Second Part;
That, the term of this contract shall be for FOUR (4) Years only, however, if the amount of (P143,823.00) shall not be fully paid
within the period, the parties hereby reserves the right to extend this contract, until such time that the above[-]mentioned
amount shall have been fully paid”
 23 May 1992-the building subject of the lease contract was burned down
 Because of the destruction of the building, respondent, on May 29, 1992, sent a letter to petitioners demanding the
accumulated rentals for the leased property from March 17, 1989 to June 17, 1992 totaling P78,000.00. As the demand
was left unheeded, respondent filed a complaint for collection of rentals plus damages before the Molave RTC.
 Respondent: alleged that Ricardo is the proximate cause of the fire that razed the building to the ground. He also
claimed that without his knowledge, petitioners insured the building with two insurance companies for face values of
more than its cost
 Petitioners: contended that under the contract of lease, the rental payment is amortized over the cost of the subject
building, thus, respondent had already become its co-owner who must suffer the loss of his property; denied liability
for the burning of the building contending that it has been destroyed by a fortuitous event. They admitted though that
they insured the building beyond their insurable interest over it. By way of counterclaim, they alleged that they
extended various cash loans to respondent in the total amount of P11,000.00 starting April 1989 with an agreed
monthly interest of 5%. Because respondent failed to pay the loan, they claimed that the total demandable amount
from him is already P39,104.00 as of the filing of their Answer. Petitioners are also demanding P1,000,000.00 in
damages from respondent for publicly imputing to them the burning of the subject building.
 Ricardo testified on his counterclaim referring to an indebtedness of respondent amounting to P11,000.00 as
evidenced by a promissory note dated January 1, 1990 signed by the latter. According to him, the loan remained
unpaid and ballooned to P368,362.50 as of December 1995 because of the 5% monthly interest. They also presented
two handwritten letters of respondent, one dated May 8, 1991 and January 12, 1992, to supposedly prove that said
 loan remains outstanding.
 Respondent took again the witness stand to refute petitioners’ allegation that his debt was still unpaid. He presented
the supposed original of the January 1, 1990 promissory note that was in his possession since July 26, 1990, the date
when he claimed to have paid his debt. He also testified that he wrote the May 8, 1991 and January 12, 1992 letters to
demand from petitioners the previous promissory notes which were consolidated in the January 1, 1990 promissory
note
 RTC: in favor of Nemeño; CA: affirmed
ISSUE(S): Whether there was condonation of the debt of the respondent involving the promissory note

HELD: Yes. Petition partly granted. CA decision affirmed with modification

RATIO:
 The Court finds no reason to depart from the ruling of the courts a quo that petitioners should pay respondent for
back rentals. There is no dispute that the contract entered into by the parties is one of lease. True, it had some
modifications such that instead of paying the rent in the form of money, petitioners will withhold such payment and
will apply the accumulated rent to the cost of the building they built on the leased property. Thereafter, at the end of
the lease period or until such time the cost of the building has been fully covered by the rent accumulated,
petitioners, as lessees will transfer the ownership of said building to respondent. Unfortunately, the subject building
was gutted down by fire. However, the destruction of the building should not in any way be made a basis to exempt
petitioners from paying rent for the period they made use of the leased property. Otherwise, this will be a clear case
of unjust enrichment. As held in P.C. Javier & Sons, Inc. v. Court of Appeals:
“The fundamental doctrine of unjust enrichment is the transfer of value without just cause or consideration. The elements of
this doctrine are: enrichment on the part of the defendant; impoverishment on the part of the plaintiff; and lack of cause. The
main objective is to prevent one to enrich himself at the expense of another. It is commonly accepted that this doctrine
simply means that a person shall not be allowed to profit or enrich himself inequitably at another’s expense.”
 In the instant case, there is no dispute that petitioners used the property for several years for their own benefit having
operated a restaurant thereon. Therefore, it would be the height of injustice to deprive respondent of compensation
due him on the use of his property by petitioners. The fact that the parties agreed to a different mode of payment – in
this case, a building – does not in any way exempt petitioners from paying compensation due to respondent for the use
of the latter’s property because the building was destroyed.
 As correctly ruled by the trial and appellate courts, the possession of respondent of the promissory note evidencing
his debt to petitioners is prima facie evidence of the payment of the same as provided in Section 3(h) of Rule 131 of
the Rules of Court which reads:
SEC. 3. Disputable presumptions. – The following presumptions are satisfactory if uncontradicted, but may be contradicted
and overcome by other evidence:
(h) That an obligation delivered up to the debtor has been paid;
 Unfortunately for petitioners, the evidence they presented failed to contradict the above presumption as they did not
conclusively show that respondent’s obligation to them remains outstanding.
DISSENTING/CONCURRING OPINION(S):