Primary and Secondary Evidence
H. D. KNEEDLER vs. SIMON PATERNO
No. L-1349. December 29, 1949
Facts:
This is an appeal from a judgment of the Court of First Instance of Rizal.
Kneedler Realty Co. sold to Simon Paterno a parcel of land situated in the
municipality of Pasay (now Rizal City), and more particularly described in transfer
certificate of title No. 6555, for the sum of P1,111,000. Paterno made an initial
payment of P30,000 and agreed to pay the balance of P81,000 in eleven monthly
installments of P7,000 each and a twelfth installment of P4,000, with interest at 9
per cent (9%) per annum. To guarantee the payment of the said balance of P81,000
plus interest, attorney's fees, and cost of collection, Paterno mortgaged the same
property to the Kneedler Realty Co., and the mortgage was duly annotated on the
new transfer certificate of title No. 44470 issued in his name by virtue of the deed of
sale. The last mentioned transfer certificate of title was subsequently lost.
This action was commenced to foreclose said mortgage. On June 26, 1946, the
defendant Simon Paterno wrote to the plaintiff H. D. Kneedler, in his capacity as
liquidator of the Kneedler Realty Co. with reference to their conversation of the 22nd
instant and the suit Kneedler instituted against Paterno, Vicente Madrigal, and the
Registers of Deeds of Manila and Rizal in Civil Case No. 7729 where he beg to confirm
the arrangement they have entered into in settlement of that suit. Acknowledging his
indebtedness to Kneedler in the amount of P81,000, together with interest at the rate
of 5 per cent (5%) per annum from exclusive of the time of the Japanese occupation.
He will pay P5,000 upon accepting the letter and the dismissal of that suit. The
balance, will be paid P20,000.00 within 90 days; 20,000.00 within 180 days;
20,000.00 within 270 days; and the balancewithin 360 days with interest at 5 per
cent (5%) per annum on unpaid balances. The letter was alleged to be guaranted by
Don Vicente Madrigal upon sending by Kneedler a copy of the motion to dismiss the
case, whereupon Paterno will send Mr. Vicente Madrigal's guaranty.
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Because Paterno refused to sign a mortgage to guarantee the new schedule of
payments as contained in the foregoing letter, the plaintiff did not move to dismiss
this case.
The defendants Paterno and Madrigal filed their answer, wherein they admitted the
purchase by Paterno of the property in question and the execution by him of a
mortgage thereon to guarantee the payment of P81,000 plus interest, attorney's fees,
and cost of collection, as alleged in paragraph III of the complaint; but averred as a
special defense "that during the Japanese occupation Simon Paterno paid to the
Japanese Enemy Property Custodian as liquidator of the Kneedler Realty Co., the
entire amount, in Japanese currency, due and owing under the mortgage referred to
in paragraph III of the complaint.
After due trial His Honor Judge Eulalio Garcia declared proven the alleged
payment to the Japanese Enemy Property Custodian but held that such payment was
null and void and that therefore the obligation in favor of the plaintiff had not been
extinguished. Hence, the judgment was in favor of the plaintiff.
The plaintiff denied the alleged payment of the mortgage to the Japanese and
insists in his brief that in the absence of documentary proof plaintiff- appellee cannot
accept the allegation of payment and wishes to invite the attention of the Court to the
contradictions in the testimony of Mr. Paterno with regard to the said mortgage.
Issue:
Whether or not proof of payment may be established in the absence of
documentary proof to relieve the appellant from his obligation?
Ruling:
The trial judge, who entertained the opinion that the alleged payment to the
Japanese was invalid, did not take the trouble to analyze the proof of the alleged
payment as carefully and critically as he should if he had held such payment valid.
After such analysis, the Court is persuaded that the defendants have not
satisfactorily proved the alleged payment. The proofs above set forth do not produce
in us the moral suasion that the defendant Paterno has discharged the burden of
proof required of a debtor to entitle him to be relieved by the court from paying his
debt. The Court leads to the conclusion that said defendant has not presented the
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best evidence of which the case is susceptible. The payment was alleged to have been
made by checks on the Yokohama Specie Bank. The records of said bank existed in
the office of the Philippine Alien Property Administration of the United States in
Manila, and the fact that it would have taken at least two weeks to locate the checks
in question was not a sufficient ground for the acceptance of oral testimony as to the
alleged payment. The present action was commenced on May 24, 1946, and the trial
was not held until October 25, 1946. Defendant then had sufficient opportunity to
produce the best evidence available had he exercised due diligence. If the intervening
period of five months between the filing of the complaint and the date of the trial were
not sufficient, said defendant could and should have asked the trial court for the
postponement of the trial to enable him to locate the necessary documentary
evidence in support of his defense.
"It is an elementary principle of the law of evidence that the best evidence of which
the case in its nature is susceptible and which is within the power of the party to
produce, or is capable of being produced, must always be adduced in proof of every
disputed fact. Secondary evidence is never admissible unless it is made manifest that
the primary evidence is unavailable, as where it is shown that it has been lost or
destroyed, is beyond the jurisdiction of the court, or is in the hands of the opposite
party who, on due notice, fails to produce it . . . According to the great weight of
authority . . ., where primary evidence is not available so that a fact may be proved by
secondary evidence, the proponent of the secondary evidence is required to produce
the best secondary evidence which exists and which. is in his power to produce." (20
Am. Jur., Evidence, secs. 403, 404, pp. 364, 365.)
In the present case, however, no such cancellation of mortgage is claimed to have
been issued to the defendant-mortgagor. It is strange that in paying off a mortgage for
such a big amount of money (more than P96,000) the defendant Paterno contented
himself with a mere receipt in Japanese characters instead of securing a cancellation
of the mortgage as other debtors of enemy nationals who made payments to the
Japanese did, thus it appears from defendant's own testimony and that of his
witnesses -that the Japanese Military Administration did not cancel or release the
mortgage in question. Under the circumstances the Court must consider it still
subsisting and enforceable.
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Even if the oral evidence adduced in this case be held valid, it is too vague,
uncertain, and full of contradictions to be relied on. According to Mr. Paterno the
checks were paid to the "Alien Property Custodian" of the Japanese, whereas
according to Mr. Panganiban, who prepared said checks, they were paid to
the Japanese Military Administration. According to Mr. Paterno the cheks were issued
in November or December, 1943, whereas according to Mr. Panganiban they were
issued in March, 1943, and according to Mr. Bayani in January or February, 1944.
While these discrepancies do not necessarily indicate prevarication, they demonstrate
the frailty and unreliability of human memory.
The judgment is affirmed, with costs against the appellant.
Ratio Decidendi:
Failure on part of Paterno to produce the primary or best evidence to establish
that the debt had been already paid is the receipt itself cancelling the mortgage, made
him accountable that the mortgage still subsists. Otherwise, he should have a
secondary evidence proving that the mortgage had been cancelled and paid other
than the oral testimony that does not corroborating as in the present case.
Under Sec. 3., Rule 130 of the Rules of Court
Original document must be produced as a general rule. Under the following
circumstances, when:
a. The original of the document is one the contents of which are the subject of
inquiry;
b. When a document is in two or more copies executed at or about the same time,
with identical contents, all such copies are equally regarded as originals;
c. When an entry is repeated in the regular course of business, one being copied
from another at or near the time of the transaction, all the entries are likewise
equally regarded as originals.
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