SPOUSES ANTONIO and LOLITA TAN v. CARMELITO VILLAPAZ
457 SCRA 720 (2005)
A check, the entries of which are no doubt in writing, could prove a loan transaction.
Respondent Carmelito Villapaz filed before the Regional Trial Court (RTC) a Complaint for sum of money against Spouses Antonio and Lolita Tan. Villapaz alleged that Spouses Tan obtained a loan from him where he issued a crossed check payable to the order of Antonio Tan and deposited the same to the latter‘s account at the PBCom Davao City branch. On the maturity date of the loan, Antonio Tan failed to settle the same.
Spouses Tan denied obtaining a loan from Villapaz. They also alleged that 1) the check issued by Villapaz was in exchange for equivalent cash; 2) that they never received any demand for payment be it verbal or written; 3) that since the alleged loan was one with a period, it should have been expressly stipulated upon in writing by the parties, but it was not, hence, the essential requisite for the validity and enforceability of a loan is wanting; and, finally 3) that the check is inadmissible to prove the existence of the a P250,000 loan.
By way of Compulsory Counterclaim, they prayed for the award of damages and litigation expenses and attorney‘s fees. The RTC dismissed the Complaint and granted the Counterclaim. Villapaz appealed to the Court of Appeals (CA) which reversed the trial court‘s decision.
ISSUE:
Whether or not the CA erred in concluding that the transaction in dispute was a contract of loan and not a mere matter of check encashment
HELD:
At all events, a check, the entries of which are no doubt in writing, could prove a loan transaction.
That apart from the check no written proof of the grant of the loan was executed was credibly explained by Villapaz when he declared that Spouses Tan‘s son being his godson, he, out of trust and respect, believed that the crossed check sufficed to prove their transaction.
As for spouses Tan‘s reliance on Art. 1358 of the Civil Code, the same is misplaced for the requirement that contracts where the amount involved exceeds P500.00 must appear in writing is only for convenience.
That Antonio Tan had an outstanding balance of more than P950,000.00 in his account at PBCom Monteverde branch where he was later to deposit respondent‘s check did not rule out petitioners‘ securing a loan. It is pure naivete to believe that if a businessman has such an outstanding balance in his bank account, he would have no need to borrow a lesser amount.
In fine, as Spouses Tan‘s side of the case is incredible as it is inconsistent with the principles by which men similarly situated are governed, whereas Villapaz‘s claim that the proceeds of the check, which were admittedly received by petitioners, represented a loan extended to petitioner Antonio Tan is credible, the preponderance of evidence inclines on Villapaz.
