Republic v. De Guzman (G.R. No. 175021. Jun 15, 2011)

CASE DIGEST: REPUBLIC OF THE PHILIPPINES, represented by the CHIEF OF THEPHILIPPINE NATIONAL POLICE, Petitioner, v THI THU THUY T. DE GUZMAN, Respondent.

FACTS: On December 8, 1995, the PNP Engineering Services (PNPES), released a Requisition and Issue Voucherfor the acquisition of various building materials amounting to Two Million Two Hundred Eighty-Eight Thousand Five Hundred Sixty-Two Pesos and Sixty Centavos (P2,288,562.60) for the construction of a four-storey condominium building with roof deck at Camp Crame, Quezon City.

Respondent averred that on December 11, 1995, MGM and petitioner, represented by the PNP, through its chief, executed a Contract of Agreement(the Contract) wherein MGM, for the price ofP2,288,562.60, undertook to procure and deliver to the PNP the construction materials itemized in the purchase order attached to the Contract.Respondent claimed that after the PNP Chief approved the Contract and purchase order,MGM, on March 1, 1996, proceeded with the delivery of the construction materials, as evidenced by Delivery Receipt Nos. 151-153, Sales Invoice Nos. 038 and 041,and the "Report of Public Property Purchase" issued by the PNPs Receiving and Accounting Officers to their Internal Auditor Chief.Respondent asseverated that following the PNPs inspection of the delivered materials on March 4, 1996,the PNP issued two Disbursement Vouchers; one in the amount ofP2,226,147.26 in favor of MGM,and the other,in the amount of P62,415.34, representing the three percent (3%) withholding tax, in favor of the Bureau of Internal Revenue (BIR).On November 5, 1997, the respondent, through counsel, sent a letter dated October 20, 1997to the PNP, demanding the payment ofP2,288,562.60 for the construction materials MGM procured for the PNP under their December 1995 Contract.

On November 17, 1997, the PNP, through its Officer-in-Charge, repliedto respondents counsel, informing her of the payment made to MGMviaLand Bank of the Philippines (LBP) Check No. 0000530631,as evidenced by Receipt No. 001,issued by the respondent to the PNP on April 23, 1996

On November 26, 1997, respondent, through counsel, responded by reiterating her demand and denying having ever received the LBP check, personally or through an authorized person.She also claimed that Receipt No. 001, a copy of which was attached to the PNPs November 17, 1997 letter, could not support the PNPs claim of payment as the aforesaid receipt belonged to Montaguz Builders, her other company, which was also doing business with the PNP, and not to MGM, with which the contract was made.

On May 5, 1999, respondent filed a Complaint for Sum of Money against the petitioner, represented by the Chief of the PNP, before the RTC, Branch 222 of Quezon City.This was docketed as Civil Case No. Q99-37717.

The petitioner filed a Motion to Dismisson July 5, 1999, on the ground that the claim or demand set forth in respondents complaint had already been paid or extinguished,as evidenced by LBP Check No. 0000530631 dated April 18, 1996, issued by the PNP to MGM, and Receipt No. 001, which the respondent correspondingly issued to the PNP.The petitioner also argued that aside from the fact that the respondent, in her October 20, 1997 letter, demanded the incorrect amount since it included the withholding tax paid to the BIR, her delay in making such demand "[did] not speak well of the worthiness of the cause she espouse[d]."

ISSUE: Was payment already made to the respondent?

HELD: The RTC and the Court of Appeals correctly ruled that the petitioners obligation has not been extinguished. The petitioners obligation consists of payment of a sum of money. In order for petitioners payment to be effective in extinguishing its obligation, it must be made to the proper person. Article 1240 of the Civil Code states:

Art. 1240.Payment shall be made to the person in whose favor the obligation has been constituted, or his successor in interest, or any person authorized to receive it.

The respondent was able to establish that the LBP check was not received by her or by her authorized personnel.The PNP's own records show that it was claimed and signed for by Cruz, who is openly known as being connected to Highland Enterprises, another contractor.Hence, absent any showing that the respondent agreed to the payment of the contract price to another person, or that she authorized Cruz to claim the check on her behalf, the payment, to be effective must be made to her.

The petitioner also challenged the RTC's findings, on the ground that it "overlooked material fact and circumstance of significant weight and substance." Invoking the doctrine of adoptive admission, the petitioner pointed out that the respondents inaction towards Cruz, whom she has known to have claimed her check as early as 1996, should be taken against her. Finally, the petitioner contends that Cruzs testimony should be taken against respondent as well, under Rule 130, Sec. 32 of the Revised Rules on Evidence, since she has not presented any "controverting evidence x x x notwithstanding that she personally heard it."

The respondent has explained her inaction towards Cruz and Highland Enterprises.Both the RTC and the Court of Appeals have found her explanation sufficient and this Court finds no cogent reason to overturn the assessment by the trial court and the Court of Appeals of the respondents testimony.It may be recalled that the respondent argued that since it was the PNP who owed her money, her actions should be directed towards the PNP and not Cruz or Highland Enterprises, against whom she has no adequate proof. Respondent has also adequately explained her delay in filing an action against the petitioner, particularly that she did not want to prejudice her other pending transactions with the PNP.

PETITION GRANTED.