Bank of the Philippine Islands vs. Amado M. Mendoza and Maria Marcos Vda. de Mendoza

A photocopy of a document is admissible as secondary evidence under the Best Evidence Rule exception when the original has been lost, destroyed, or cannot be produced in court without bad faith on the part of the offeror, provided the offeror proves: (a) the existence or due execution of the original; (b) the loss and destruction of the original, or the reason for its non-production in court; and (c) the absence of bad faith. In civil cases, the plaintiff need only prove his claim by preponderance of evidence, which requires that the evidence be greater or more convincing than the opposing evidence.

BPI is a commercial banking institution that maintained a branch in Gapan City, Nueva Ecija. Respondents Amado M. Mendoza and his mother, Maria Marcos Vda. de Mendoza, were depositors who opened a foreign currency savings account with BPI-Gapan Branch. The dispute arose from a US Treasury check deposited into this account, which was subsequently dishonored by the drawee bank due to an alteration in the amount. The case involves the application of the principle of solutio indebiti under Article 2154 of the Civil Code, which requires the return of something received when there is no right to demand it and it was unduly delivered through mistake.

On April 8, 1997, respondents Amado M. Mendoza and his mother, Maria Marcos Vda. de Mendoza, opened a foreign currency savings account with Account No. 0584-0007-08 at BPI-Gapan Branch, depositing a total of US$16,264.00, consisting of US$100.00 in cash and US$16,164.00 in a US Treasury Check with No. 3149-09693369 payable to "Ma. Marcos Vda. de Mendoza." Respondents also placed US$2,000.00 in a time deposit account. After the thirty-day clearing period lapsed on May 9 and 13, 1997, respondents withdrew US$16,244.00 from the US savings account, leaving only US$20.00 for bank charges.

On June 26, 1997, BPI received notice from its correspondent bank, Bankers Trust Company New York, that the subject check was dishonored due to "amount altered," as evidenced by an e-mail advice from Bankers Trust and a photocopy of the check with a notation "endorsement cancelled" by Bankers Trust. The original copy of the check was allegedly confiscated by the government of the United States of America. BPI informed respondents of the dishonor and demanded reimbursement. On July 18, 1997, respondents allowed BPI to apply the proceeds of their time deposit account in the amount of US$2,015.00 to their outstanding obligation. Thereafter, Amado gave BPI a promissory note dated September 8, 1997, promising to pay BPI-Gapan Branch ₱1,000.00 monthly. When respondents failed to fulfill their obligation despite repeated demands, BPI sent a final demand letter on November 27, 1997.

Respondents admitted the withdrawals and exchanging the same with BPI at the rate of ₱26.159 per dollar, but claimed they did not receive the amount of ₱582,140.00 from the proceeds. Amado maintained that he only affixed his signature in the July 18, 1997 letter to acknowledge receipt, not to consent to the application of the time deposit proceeds to their purported obligations. According to Amado, he would have been willing to pay BPI if the latter presented proper and authenticated proof of the dishonor of the subject check, and since the bank failed to do so, BPI had no cause of action against him and his mother.

The RTC found that BPI duly notified respondents of the dishonor, creating an obligation to return the proceeds, and that Amado unmistakably acknowledged the same by executing the promissory note. The RTC opined that since respondents withdrew the money prior to the dishonor and BPI allowed such withdrawal by mistake, respondents must return the proceeds pursuant to solutio indebiti under Article 2154 of the Civil Code. The CA reversed, holding that BPI failed to prove the dishonor because the photocopy of the check violated the Best Evidence Rule and the e-mail advice was not properly authenticated under the Rules on Electronic Evidence.

• Preponderance of Evidence: BPI argued that it proved respondents' obligation by preponderance of evidence through Amado's voluntary acts, including affixing his signature on the letters dated June 27, 1997 and July 18, 1997, and executing the promissory note dated September 8, 1997, wherein he undertook to pay BPI in monthly installments.
• Best Evidence Rule Exception: BPI argued that the presentation of the photocopy of the subject check was permissible under the exception to the Best Evidence Rule because the original was confiscated by the US government, and BPI proved the existence or due execution of the original, the reason for its non-production, and the absence of bad faith.
• Corroborative Nature of E-mail: BPI argued that the e-mail advice from Bankers Trust was merely corroborative evidence, and its admissibility or inadmissibility should not diminish the probative value of the other evidence proving respondents' obligation.
• Failure to Object: BPI argued that respondents did not proffer any objection to the evidence presented, as shown by their failure to file a comment or opposition to BPI's formal offer of evidence, and evidence not objected to is deemed admitted.

• Lack of Authenticated Proof: Respondents argued that BPI had no cause of action because the bank failed to present proper and authenticated proof of the dishonor of the subject check, and Amado would have been willing to pay if such proof was presented.
• No Consent to Application: Respondents maintained that Amado only affixed his signature in the July 18, 1997 letter to acknowledge its receipt, but not to give his consent to the application of the proceeds of their time deposit account to their purported obligations to BPI.
• Non-Receipt of Proceeds: Respondents claimed they did not receive the amount of ₱582,140.00 from the proceeds of the withdrawals, although they admitted the withdrawals and the exchange with BPI at the rate of ₱26.159 per dollar.

• Dismissal of Complaint: Whether the CA correctly dismissed BPI's complaint for sum of money against respondents.
• Admissibility of Photocopy: Whether the photocopy of the subject check was admissible as secondary evidence under the exception to the Best Evidence Rule.
• Interest Rate: Whether the interest rate of 12% per annum imposed by the RTC should be modified given the nature of the obligation.

• Dismissal of Complaint: No. The CA erred in dismissing BPI's complaint because BPI proved its cause of action by preponderance of evidence, and the conflicting factual findings of the RTC and CA warranted the Court's own factual review.
• Admissibility of Photocopy: Yes. The photocopy of the subject check was admissible under the exception to the Best Evidence Rule, as BPI proved the existence or due execution of the original, the reason for its non-production (confiscation by the US government), and the absence of bad faith.
• Interest Rate: Modified. The obligation arose from solutio indebiti under Article 2154 of the Civil Code, not from a loan or forbearance of money, so the interest rate should be 6% per annum from the date of extrajudicial demand on June 27, 1997, until fully paid.

• Dismissal of Complaint: The Court noted that while a Rule 45 petition generally allows only questions of law, an exception exists where the factual findings of the RTC and the CA are conflicting or contradictory, which was evident in this case. The RTC found that BPI sufficiently established by preponderance of evidence that respondents were duly notified of the dishonor, while the CA held that BPI failed to competently prove the fact of dishonor. After a judicious review of the records, the Court sustained the RTC's findings. The Court emphasized that in civil cases, the party having the burden of proof must produce a preponderance of evidence, and the plaintiff must rely on the strength of his own evidence. BPI satisfactorily proved the existence of respondents' obligation through Amado's voluntary acts: affixing his signature on the letters dated June 27, 1997 and July 18, 1997, where he acknowledged the dishonor and allowed BPI to apply the time deposit proceeds to partially offset the obligation, and executing the promissory note dated September 8, 1997. Amado's bare testimony, unsupported by corroborative evidence, was self-serving and could not be relied upon. The Court also noted that the RTC's findings on credibility deserve great weight, as the trial judge is in the best position to assess witness credibility, and absent any showing that the trial court's calibration was flawed, the appellate court is bound by its assessment.

• Admissibility of Photocopy: The Court held that while the Best Evidence Rule under Section 3, Rule 130 of the Rules of Court generally requires the presentation of the original document, an exception exists when the original has been lost or destroyed, or cannot be produced in court without bad faith on the part of the offeror. To fall under this exception, the offeror must prove: (a) the existence or due execution of the original; (b) the loss and destruction of the original, or the reason for its non-production in court; and (c) the absence of bad faith. BPI sufficiently complied with all three requisites. First, the existence or due execution of the subject check was admitted by both parties. Second, the reason for non-presentation was justifiable because the check was confiscated by the US government for being an altered check, and being a US Treasury Warrant, it was not an ordinary check that could be easily obtained. Lastly, absent any proof to the contrary, no bad faith could be attributed to BPI. As to the e-mail advice, while it may not have been properly authenticated under the Rules on Electronic Evidence, it was merely corroborative evidence, and its inadmissibility should not diminish the probative value of the other evidence proving respondents' obligation. The Court also noted that respondents did not proffer any objection to the evidence presented by BPI, as shown by their failure to file a comment or opposition to the formal offer of evidence, and evidence not objected to is deemed admitted.

• Interest Rate: The Court modified the interest rate from 12% to 6% per annum. The RTC's imposition of 12% interest implied that the amount was a loan or a forbearance of money. However, BPI's payment of the proceeds of the subject check was due to a mistaken notion that such check was cleared, when in fact it was dishonored due to an alteration in the amount. Such payment was clearly made by mistake, giving rise to the quasi-contractual obligation of solutio indebiti under Article 2154 in relation to Article 2163 of the Civil Code. Not being a loan or forbearance of money, an interest of 6% per annum should be imposed on the amount to be refunded and on the damages and attorney's fees awarded, if any, computed from the time of demand until its satisfaction. Consequently, respondents must return the amount of ₱369,600.51 with legal interest at 6% per annum from June 27, 1997, the date of extrajudicial demand, until fully paid.

• Solutio Indebiti — Under Article 2154 of the Civil Code, if something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises. Article 2163 provides that it is presumed there was a mistake in payment if something which had never been due or had already been paid was delivered. In this case, BPI's payment of the check proceeds to respondents was made by mistake, as the check was dishonored due to an alteration in the amount, giving rise to respondents' obligation to return the proceeds. Because the obligation arose from a quasi-contract rather than a loan or forbearance of money, the applicable interest rate is 6% per annum, not 12%.

• Preponderance of Evidence — In civil cases, the party having the burden of proof must produce a preponderance of evidence, with the plaintiff having to rely on the strength of his own evidence and not upon the weakness of the defendant's. Preponderance of evidence is the weight, credit, and value of the aggregate evidence on either side, synonymous with "greater weight of evidence" or "greater weight of credible evidence." It only requires that evidence be greater or more convincing than the opposing evidence. BPI satisfied this standard through Amado's voluntary acknowledgments and the promissory note, while Amado's unsubstantiated testimony was self-serving and could not be relied upon.

• Best Evidence Rule Exception — Under Section 3, Rule 130 of the Rules of Court, the original document must be produced when the subject of inquiry is the contents of a document, except when the original has been lost or destroyed, or cannot be produced in court without bad faith on the part of the offeror. To fall under this exception, the offeror must prove: (a) the existence or due execution of the original; (b) the loss and destruction of the original, or the reason for its non-production in court; and (c) the absence of bad faith. The Court applied this exception to allow the photocopy of the subject check, which was confiscated by the US government.

• Trial Court Credibility Findings — Findings of the trial court on the credibility of witnesses deserve great weight, as the trial judge is in the best position to assess the credibility of witnesses and has the unique opportunity to observe the witness firsthand and note his demeanor, conduct, and attitude under gruelling examination. Absent any showing that the trial court's calibration of credibility was flawed, the appellate court is bound by its assessment.

• "It is settled that in civil cases, the party having the burden of proof must produce a preponderance of evidence thereon, with plaintiff having to rely on the strength of his own evidence and not upon the weakness of the defendant's." — This passage articulates the controlling standard of proof in civil cases and the principle that a plaintiff must establish its own case rather than depend on the defendant's deficiencies.

• "Records evince that BPI was able to satisfactorily prove by preponderance of evidence the existence of respondents' obligation in its favor. Verily, Amado acknowledged its existence and expressed his conformity thereto when he voluntarily: (a) affixed his signature in the letters dated June 27, 1997 and July 18, 1997, where he acknowledged the dishonor of the subject check, and subsequently, allowed BPI to apply the proceeds of their US time deposit account to partially offset their obligation to the bank; and (b) executed a Promissory Note dated September 8, 1997 wherein he undertook to pay BPI in installments of ₱1,000.00 per month until the remaining balance of his obligation is fully paid." — This passage identifies the specific evidence that satisfied BPI's burden of proof and establishes the basis for respondents' liability.

• "In order to fall under the aforesaid exception, it is crucial that the offeror proves: (a) the existence or due execution of the original; (b) the loss and destruction of the original, or the reason for its non-production in court; and (c) the absence of bad faith on the part of the offeror to which the unavailability of the original can be attributed." — This passage states the requisites for the exception to the Best Evidence Rule, which the Court applied to admit the photocopy of the subject check.

• "Not being a loan or forbearance of money, an interest of six percent (6%) per annum should be imposed on the amount to be refunded and on the damages and attorney's fees awarded, if any, computed from the time of demand until its satisfaction." — This passage establishes the correct interest rate applicable to obligations arising from solutio indebiti, distinguishing such obligations from loans or forbearance of money.

• General Mariano Alvarez Services Cooperative, Inc. vs. National Housing Authority, G.R. No. 175417, February 9, 2015, 750 SCRA 156 — Cited for the general rule that a Rule 45 petition allows only questions of law and that the Court is not a trier of facts.
• Bases Conversion Development Authority vs. Reyes, 711 Phil. 631 (2013) — Cited for the definition of a question of law versus a question of fact, and the test for determining whether an error is one of law or fact.
• Miro vs. Vda. de Erederos, 721 Phil. 772 (2013) — Cited for the exception to the general rule on Rule 45 petitions where the factual findings of the RTC and the CA are conflicting or contradictory.
• Cirtek Employees Labor Union-Federation of Free Workers vs. Cirtek Electronics, Inc., 665 Phil. 784 (2011) — Cited for the enumeration of exceptions to the general rule against factual review in Rule 45 petitions.
• Republic vs. Galeno, G.R. No. 215009, January 23, 2017 — Cited for the rule that in civil cases, the party having the burden of proof must produce a preponderance of evidence.
• Ogawa vs. Menigishi, 690 Phil. 359 (2012) — Cited for the definition of preponderance of evidence as the weight, credit, and value of the aggregate evidence on either side.
• Diaz vs. People, G.R. No. 208113, December 2, 2015, 776 SCRA 43 — Cited for the proposition that preponderance of evidence only requires that evidence be greater or more convincing than the opposing evidence.
• Reyes vs. Nieva, A.C. No. 8560, September 6, 2016 — Cited for the rule that unsubstantiated testimony is self-serving and cannot be relied upon.
• People vs. Sevillano, G.R. No. 200800, February 9, 2015, 750 SCRA 221 — Cited for the principle that findings of the trial court on the credibility of witnesses deserve great weight.
• Heirs of Prodan vs. Heirs of Alvarez, 717 Phil. 54 (2013) — Cited for the requisites to fall under the exception to the Best Evidence Rule.
• Citibank, N.A. Mastercard vs. Teodoro, 458 Phil. 480 (2003) — Cited in connection with the requisites for the Best Evidence Rule exception.
• Spouses Enriquez vs. Isarog Line Transport, Inc., G.R. No. 212008, November 16, 2016 — Cited for the rule that evidence not objected to is deemed admitted.
• Marilag vs. Martinez, G.R. No. 201892, July 22, 2015, 763 SCRA 533 — Cited for the rule that 6% per annum interest should be imposed on obligations arising from solutio indebiti, not 12%.

• Section 3, Rule 130, Rules of Court — The Best Evidence Rule, which requires the production of the original document when the subject of inquiry is the contents of a document, subject to exceptions including when the original has been lost or destroyed, or cannot be produced in court without bad faith on the part of the offeror. The Court applied the exception to admit the photocopy of the subject check.
• Article 2154, Civil Code — Provides that if something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it arises. The Court applied this provision to hold respondents liable to return the proceeds of the dishonored check.
• Article 2163, Civil Code — Provides that it is presumed that there was a mistake in the payment if something which had never been due or had already been paid was delivered, but the person from whom return is claimed may prove that the delivery was made out of liberality or for any other just cause. The Court applied this provision in relation to Article 2154 to establish the presumption of mistake in BPI's payment.
• Rule 45, Rules of Court — Governs petitions for review on certiorari to the Supreme Court, which generally limits review to pure questions of law. The Court noted this general rule but applied the exception for conflicting factual findings of the lower courts.

Sereno, C.J. (Chairperson), Leonardo-De Castro, J., Del Castillo, J., and Caguioa, J., concurred in the decision.