Park vs. Choi

A party who repeatedly seeks postponements despite repeated court warnings is deemed to have waived the right to present evidence, and such waiver does not constitute deprivation of due process where the party was afforded ample opportunity to be heard and to present evidence but failed to do so through causes attributable solely to himself. Judicial admissions in a counter-affidavit are conclusive and binding on the party making them, and the burden of proving payment rests on the debtor who alleges it.

Park was engaged in the business of lending money. On June 28, 1999, he extended a loan to Choi, a Korean national, in connection with which Choi issued PNB Check No. 0077133 in the amount of P1,875,000.00 dated August 28, 1999. The check was dishonored upon presentment for being drawn against a closed account, prompting Park to file a criminal complaint for estafa and violation of B.P. 22. The civil aspect of the obligation — a simple money claim arising from the loan — became the central dispute after the criminal charge was dismissed on demurrer, and the case was twice remanded to the MeTC for reception of evidence on the civil aspect alone.

Park, who was engaged in the business of lending money, extended a loan to Choi on June 28, 1999, in the amount of P1,875,000.00. As payment for the loan, Choi issued PNB Check No. 0077133 in the same amount, dated August 28, 1999, in favor of Park. On October 5, 1999, Park attempted to deposit the check to his bank account, but it was returned dishonored for having been drawn against a closed account. Thereafter, Park, through counsel, sent a letter to Choi on May 11, 2000 informing him of the dishonored check. As stipulated by Choi during the pre-trial conference, and as evidenced by the registry return receipt attached to Park's Complaint-Affidavit, Choi received the demand letter on May 19, 2000 through a certain Ina Soliven. Choi nevertheless failed to resolve the dishonored check, and the loan remained unpaid.

With the loan still outstanding, Park instituted a complaint against Choi for estafa and violation of B.P. 22. The Office of the City Prosecutor of Makati, in an Information dated August 31, 2000, charged Choi with one count of violation of B.P. 22, docketed as Criminal Case No. 294690 before the MeTC. Choi pleaded not guilty upon arraignment. After the prosecution presented its evidence, Choi filed a demurrer to evidence asserting that the prosecution failed to prove he received the notice of dishonor, and that absent such proof, the presumption of knowledge of insufficiency of funds — an element for conviction under B.P. 22 — did not arise. The MeTC granted the demurrer and dismissed the criminal complaint. The case was subsequently remanded — first by the RTC-Branch 60 on reconsideration, and ultimately by the Supreme Court in G.R. No. 165496 — to the MeTC for the sole purpose of receiving Choi's evidence on the civil aspect of the case.

The proceedings before the MeTC for the reception of Choi's evidence were marked by repeated postponements at Choi's instance. The MeTC initially scheduled the hearing for July 16, 2008, but it was declared a holiday. The hearing was reset to January 7, 2009, then to April 7, 2009, then to May 19, 2009, and then to August 5, 2009 — which was again declared a holiday. On September 15, 2010, Choi sought postponement on the ground that he needed the assistance of an interpreter to translate his testimony from Korean to English. The MeTC granted the request, resetting the hearing to November 23, 2010, but warned that failure to present evidence on the scheduled date would result in a deemed waiver of the right to do so. On November 23, 2010, Choi again moved for postponement, this time because the interpreter's certification from the Korean Embassy was for a different case. The MeTC again granted the motion with a final warning. On March 7, 2011, Choi's new counsel moved for yet another postponement on the ground that the previous counsel had retired and the new counsel was unprepared. Park objected, citing the court's prior warnings. The MeTC denied the sixth motion for postponement and declared Choi's right to present evidence waived, deeming the case submitted for resolution.

On the civil liability itself, the MeTC found that the prosecution had proven the check was issued by Choi in exchange for the cash loaned to him, and that Choi adduced no evidence to controvert Park's claim of indebtedness. The MeTC accordingly held Choi civilly liable for the loan. On appeal, the RTC-Branch 142 affirmed this ruling, observing that Choi's failure to adduce evidence was clearly attributable to himself due to his repeated postponements, and that if he truly wished to present his case he could have availed of the ample opportunities given him. The RTC-Branch 142 likewise denied Choi's motion for reconsideration on March 28, 2012, two days before the expiration of the ten-day period the court had given Choi to file a reply to Park's opposition. The CA reversed, holding that the postponements were attended by justifiable reasons and that only a full-blown hearing would guarantee a fair resolution. The CA remanded the case to the MeTC for reception of Choi's evidence, prompting Park's petition to the Supreme Court.

As to the underlying facts bearing on the extent of liability, Choi admitted in his Counter-Affidavit that he borrowed money from Park, but contended that the principal was only P1,500,000.00 and that the P1,875,000.00 check included P375,000.00 as 25% interest, with the check serving merely as evidence of indebtedness in lieu of a promissory note. Choi also claimed to have already paid P1,590,000.00, leaving an unpaid balance of only P285,000.00. Park, in his Reply-Affidavit, testified that the P1,590,000.00 in checks given by Choi was not in payment of the P1,875,000.00 check but was for two other checks — PNB Check No. 0077134 (P750,000.00) and PNB Check No. 0008013 (P700,000.00) — which Choi had encashed with Park in July 1999. Park further testified that of the P1,875,000.00, Choi had directed P100,000.00 to a commission for a third party, P196,000.00 for warehouse rentals, P1,500,000.00 to be converted to manager's checks for payment to Samsung Electric Company, and P69,000.00 as interest for July and August. The subject check for P1,875,000.00 remained in Park's possession, and Park continued to make demands on the basis of it.

• Civil Liability Survives Criminal Dismissal: Park contended that the dismissal of the criminal case should not carry with it the dismissal of the civil aspect of the case.
• Objection to Further Postponement: Park objected to further postponement of the case before the MeTC, considering that the last two postponements had already come with the court's warning against further postponements.
• Reversible Error by the CA: Park assailed the CA's reversal of the RTC-Branch 142, arguing that the CA erred in remanding the case to the MeTC when Choi had been given more than ample opportunity to present evidence and had waived that right through his own repeated postponements.

• Substantive Justice and Postponement: Choi argued that substantive justice must be the determinative end of courts, and that any grant of postponement must take into consideration the reason for the postponement and the merits of the case of the movant.
• Deprivation of Due Process (Premature Denial of MR): Choi contended that the RTC-Branch 142 violated his constitutional right to due process in denying his motion for reconsideration on March 28, 2012, even before his ten-day period to file a reply to Park's opposition had expired on March 30, 2012.
• Waiver Was Erroneous: Choi argued that the RTC erred in declaring his right to present evidence waived for the reason that the day of presentation of evidence was the day of the retirement of his lawyer, a circumstance beyond his control.
• Claim of Partial Payment: Choi raised the defense of payment, insisting that he had already paid P1,590,000.00 (P1,500,000.00 as principal and P90,000.00 as interest), leaving an unpaid balance of only P285,000.00.

• Due Process — Waiver of Right to Present Evidence: Whether the MeTC, as affirmed by the RTC-Branch 142, correctly declared Choi to have waived his right to present evidence after he moved for a sixth postponement, such that the declaration of waiver did not constitute deprivation of due process.
• Due Process — Premature Denial of Motion for Reconsideration: Whether the RTC-Branch 142's denial of Choi's motion for reconsideration two days before the lapse of the period to file a reply constituted a violation of due process.
• Extent of Civil Liability: Whether Choi is liable to Park for the full face value of the check (P1,875,000.00) as principal, and the proper rate and period of legal interest to be imposed.

• Due Process — Waiver of Right to Present Evidence: No deprivation of due process occurred. The MeTC, as affirmed by the RTC-Branch 142, correctly declared Choi to have waived his right to present evidence, he having been given more than ample opportunity — spanning almost three years — to present his case, with all postponements sought at his own instance and despite repeated court warnings.
• Due Process — Premature Denial of Motion for Reconsideration: No violation of due process. The denial of the motion for reconsideration two days before the lapse of the period to file a reply did not, by itself, support a claim of deprivation, the reply being limited to issues already raised in the opposition and the motion for reconsideration.
• Extent of Civil Liability: Choi is liable to pay P1,875,000.00 as principal, the full face value of the check, with legal interest at 12% per annum from May 19, 2000 until June 30, 2013, and 6% per annum from July 1, 2013 until finality, and 6% per annum from finality until full payment.

• Due Process — Waiver of Right to Present Evidence: The grant or denial of a motion for postponement is addressed to the sound discretion of the court, predicated on the consideration that the ends of justice and fairness are served. Postponement is a matter of privilege, not a right, and a movant should not assume that his motion will be granted. Pursuant to Sections 2 and 3 of Rule 30 of the Rules of Court, a motion to postpone trial on the ground of absence of evidence can be granted only upon affidavit showing the materiality or relevancy of such evidence and that due diligence has been used to procure it. Courts must exercise their discretion mindful of the constitutional guarantee against unreasonable delay in the disposition of cases. Here, the MeTC had been very liberal in granting Choi's numerous motions for postponement, each time reminding him to come prepared. From July 16, 2008 until March 7, 2011 — almost three years — Choi was given several opportunities to present his evidence. All postponements were at his instance: first for the unavailability of a Korean interpreter, then for an erroneous interpreter certification, and finally for the substitution of counsel. There is no deprivation of due process when a party is given an opportunity to be heard, and Choi was given more than enough opportunity. The unpreparedness of counsel cannot justify further delay to the detriment of Park's right to an expeditious resolution of a simple money claim. In the absence of grave abuse of discretion, the MeTC's denial of the sixth postponement was justified.

• Due Process — Premature Denial of Motion for Reconsideration: The RTC-Branch 142's denial of Choi's motion for reconsideration on March 28, 2012, two days before the lapse of the ten-day period to file a reply, does not support a claim of due process violation. A reply to an opposition is limited to the issues and arguments raised in the opposition, which in turn is limited to the issues and arguments raised in the movant's own motion for reconsideration. The denial of the motion for reconsideration before the reply period lapsed did not deprive Choi of the opportunity to be heard on the motion, as the motion itself and the opposition had already been filed and the issues joined.

• Extent of Civil Liability: Choi's liability was established by his own judicial admissions. In his Counter-Affidavit, Choi admitted that he borrowed money from Park and issued the subject check in the amount of P1,875,000.00. Judicial admissions made by parties in the course of trial are conclusive and do not require further evidence to prove them, and they are legally binding on the party making them except when shown to have been made through palpable mistake or when no such admission was made — neither of which was shown here. Choi's contention that the principal was only P1,500,000.00 and that P375,000.00 was interest rested solely on his bare allegations in the Counter-Affidavit. Under Article 1956 of the Civil Code, no interest shall be due unless it has been expressly stipulated in writing; absent proof of any express written agreement that P375,000.00 pertained to interest, the entire face value of the check — P1,875,000.00 — constitutes the principal. Choi's defense of payment likewise failed. A party claiming that an obligation has been discharged by payment bears the burden of proving it. Other than his mere allegation of payment of P1,590,000.00, Choi adduced no evidence to prove the fact of payment. Park's categorical testimony that the P1,590,000.00 was not for the subject check but for two other checks (PNB Check No. 0077134 for P750,000.00 and PNB Check No. 0008013 for P700,000.00), coupled with Park's continued possession of the subject check and his continued demands on the basis of it, rebutted Choi's claim. As to interest, no monetary interest could be imposed because the parties did not execute a written loan agreement stipulating interest, as required by Article 1956. However, compensatory interest under Article 2209 of the Civil Code applies from the time the debtor incurs in delay, which under Article 1169 begins from the time of extrajudicial demand — May 19, 2000. There being no stipulation as to the rate, the legal interest of 6% per annum under Article 2209 applies, but pursuant to Eastern Shipping Lines, Inc. vs. Court of Appeals as clarified by Nacar vs. Gallery Frames and BSP-MB Circular No. 799, the rate of 12% per annum applies until June 30, 2013, and 6% per annum from July 1, 2013. Article 2212 of the Civil Code, which provides that interest due shall earn legal interest from the time of judicial demand, does not apply because it contemplates only accrued or conventional interest, as clarified by the counterpart provision (Article 1109 of the old Civil Code) and the Court's ruling in Zobel vs. City of Manila. Upon finality of the judgment, the rate of 6% per annum applies until full satisfaction, the interim period being deemed equivalent to a forbearance of credit.

• Postponement as a Matter of Privilege, Not Right — The grant or denial of a motion for postponement is addressed to the sound discretion of the court, predicated on the consideration that the ends of justice and fairness are served. A movant for postponement should not assume beforehand that his motion will be granted. In considering motions for postponement, two things must be borne in mind: (1) the reason for the postponement, and (2) the merits of the case of the movant. Unless grave abuse of discretion is shown, such discretion will not be interfered with. The Court applied this doctrine to hold that the MeTC's denial of Choi's sixth motion for postponement, after repeated warnings and almost three years of opportunities, was justified and did not constitute grave abuse of discretion.

• Judicial Admissions — Admissions made by a party in the course of the trial in the same case are conclusive and do not require further evidence to prove them. They are legally binding on the party making them except when shown to have been made through palpable mistake or when no such admission was in fact made. The Court applied this doctrine to Choi's admission in his Counter-Affidavit that he borrowed money from Park, which established the fact of indebtedness and left only the extent of liability for determination.

• Burden of Proof for Payment — One who pleads payment has the burden of proving it. Even where the plaintiff must allege non-payment, the general rule is that the burden rests on the defendant to prove payment, rather than on the plaintiff to prove non-payment. The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment. The Court applied this doctrine to reject Choi's unsupported allegation of partial payment of P1,590,000.00.

• No Interest Unless Expressly Stipulated in Writing (Article 1956) — No interest shall be due unless it has been expressly stipulated in writing. The Court applied this to hold that no monetary interest could be imposed because the parties did not execute a written loan agreement stipulating interest, and consequently Choi's bare allegation that P375,000.00 of the P1,875,000.00 constituted interest was insufficient to reduce the principal.

• Compensatory Interest for Delay (Article 2209) — If the obligation consists in the payment of a sum of money and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six percent (6%) per annum. The Court applied this to award compensatory interest from the date of extrajudicial demand (May 19, 2000), with the applicable rate determined by Eastern Shipping Lines, Nacar vs. Gallery Frames, and BSP-MB Circular No. 799: 12% per annum until June 30, 2013, 6% per annum from July 1, 2013 until finality, and 6% per annum from finality until full payment.

• Article 2212 Applies Only to Accrued or Conventional Interest — Article 2212 of the Civil Code, which provides that interest due shall earn legal interest from the time it is judicially demanded, contemplates and applies only when there exists stipulated or conventional interest. The Court relied on the counterpart provision (Article 1109 of the old Civil Code) and Zobel vs. City of Manila to clarify that "interest due" in Article 2212 refers only to accrued interest, and thus the provision does not apply where no conventional interest was stipulated.

• "There is no deprivation of due process when a party is given an opportunity to be heard, not only through hearings, but even through pleadings, so that one may explain one's side or arguments." — This passage articulates the ratio decidendi on the due process issue, establishing that the opportunity to be heard — not the actual presentation of evidence — is the touchstone of due process, and that a party who forfeits that opportunity through repeated postponements cannot claim deprivation.

• "Judicial admissions made by parties in the course of the trial in the same case are conclusive and do not require further evidence to prove them. They are legally binding on the party making them except when it is shown that they have been made through palpable mistake, or that no such admission was made, neither of which was shown to exist in this case." — This passage states the controlling doctrine on judicial admissions and its application to Choi's Counter-Affidavit admission of indebtedness, which the Court treated as conclusive proof of liability.

• "In accordance with Article 1956 of the Civil Code, no interest shall be due unless it has been expressly stipulated in writing. Here, without further proof of any express agreement that P375,000.00 of the P1,875,000.00 pertains to interest, the Court is predisposed, based on the facts of the case, to rule that the entire principal amount owed by Choi to Park is the face value of the check, or P1,875,000.00." — This passage applies Article 1956 to determine the extent of liability, rejecting the attempt to characterize part of the check as interest absent a written stipulation, and fixing the principal at the full face value of the check.

• Sibay vs. Bermudez, G.R. No. 198196, July 17, 2017, 831 SCRA 191 — Cited for the doctrine that the grant or denial of postponement is addressed to the sound discretion of the court, and that two things must be considered: the reason for the postponement and the merits of the movant's case. The Court relied on this to uphold the MeTC's denial of Choi's sixth postponement.

• Eastern Shipping Lines, Inc. vs. Court of Appeals, 304 Phil. 236 (1994) — Cited for the framework on legal interest rates in judgments awarding sums of money, including the rule that the applicable rate from the time of default until finality and the 6% per annum rate from finality until satisfaction. The Court applied this framework, as further clarified by Nacar vs. Gallery Frames, to fix the interest rates payable by Choi.

• Nacar vs. Gallery Frames, 716 Phil. 267 (2013) — Cited as clarifying Eastern Shipping Lines in light of BSP-MB Circular No. 799 (s. 2013), which reduced the legal interest rate for loans or forbearance of money from 12% to 6% per annum effective July 1, 2013. The Court applied this to impose 12% per annum until June 30, 2013 and 6% per annum thereafter.

• Alonzo vs. San Juan, 491 Phil. 233 (2005) — Cited for the doctrine that the burden of proving payment rests on the party alleging it, and that the debtor must show with legal certainty that the obligation has been discharged. The Court applied this to reject Choi's unsupported claim of partial payment.

• Zobel vs. City of Manila, 47 Phil. 169 (1925) — Cited for the interpretation of Article 1109 of the old Civil Code (the counterpart of Article 2212 of the new Civil Code), holding that the provision applies only to conventional obligations containing a stipulation on interest. The Court relied on this to clarify that Article 2212 applies only when conventional interest exists, and thus does not apply to the present case where no interest was stipulated.

• Article 1956, Civil Code of the Philippines — Provides that "[n]o interest shall be due unless it has been expressly stipulated in writing." Applied to preclude the imposition of monetary interest, as the parties did not execute a written loan agreement stipulating interest, and to reject Choi's attempt to characterize P375,000.00 of the P1,875,000.00 check as interest, thereby fixing the principal at the full face value of the check.

• Article 2209, Civil Code of the Philippines — Provides that if the obligation consists in the payment of a sum of money and the debtor incurs in delay, the indemnity for damages, absent stipulation to the contrary, shall be the legal interest of six percent (6%) per annum. Applied to award compensatory interest to Park for damages suffered as a result of Choi's delay, computed from the date of extrajudicial demand.

• Article 1169, Civil Code of the Philippines — Provides that those obliged to deliver or do something incur in delay from the time the obligee judicially or extrajudicially demands fulfillment of the obligation. Applied to fix the commencement of delay — and thus the accrual of compensatory interest — from May 19, 2000, the date Choi received Park's extrajudicial demand letter.

• Article 2212, Civil Code of the Philippines — Provides that interest due shall earn legal interest from the time it is judicially demanded. The Court clarified that this provision applies only to accrued or conventional interest, and thus does not apply where no stipulated interest exists, as in the present case.

• Sections 2 and 3, Rule 30, Rules of Court — Section 2 governs adjournments and postponements of trial; Section 3 provides that a motion to postpone trial on the ground of absence of evidence can be granted only upon affidavit showing the materiality or relevancy of such evidence and that due diligence has been used to procure it. Applied to support the MeTC's denial of Choi's sixth motion for postponement and the declaration of waiver of his right to present evidence.

• BSP-MB Circular No. 799 (s. 2013) — Reduced the rate of legal interest for loans or forbearance of money, goods, or credits and the rate allowed in judgments from 12% to 6% per annum, effective July 1, 2013. Applied to impose 12% per annum until June 30, 2013, and 6% per annum from July 1, 2013 until finality, and 6% per annum from finality until full payment.

Carpio (Chairperson), Perlas-Bernabe, J. Reyes, Jr., and Lazaro-Javier, JJ., concurred. No separate concurring opinions were written.