Once a debtor introduces evidence of payment, the burden of going forward with the evidence shifts to the creditor, who then has the duty to produce evidence to show non-payment; material alterations on a promissory note made without the assent of the other contracting party render the instrument void and unenforceable by the party causing the alteration.

Petitioner Gemma A. Ridao obtained loans from respondent Handmade Credit and Loans, Inc., represented by Ridao's brother-in-law, Teofilo Manipon. A dispute arose when Handmade Credit claimed Ridao failed to pay her obligations, including an alleged increased dollar loan and an additional peso loan, while Ridao asserted she had fully paid the admitted $4,300.00 loan obligation.

• On February 20, 2004, Gemma A. Ridao obtained a $4,000.00 loan from Handmade Credit and Loans, Inc., represented by her brother-in-law Teofilo Manipon, evidenced by Promissory Note No. 2000029B.
• Ridao stated an additional $300.00 was given to her late husband Avelino (Teofilo's brother) when Ridao left for abroad, making her admitted loan obligation $4,300.00.
• Handmade Credit claimed that on August 24, 2004, Ridao obtained an additional loan increasing her dollar obligation to $6,167.00 (evidenced by the same Promissory Note No. 2000029B but allegedly reflecting a new date of August 20, 2004) and a P40,000.00 loan. Both loans had 4% monthly interest.
• Handmade Credit sent a demand letter on September 21, 2012, for the $6,167.00 obligation plus 4% monthly interest, and the P40,000.00 obligation with legal interest, plus attorney's fees.
• On July 11, 2013, Handmade Credit filed a collection suit, alleging Ridao had not paid a single centavo.
• Ridao, in her Answer, admitted the initial $4,000.00 loan (plus $300.00, totaling $4,300.00) but asserted full payment through Avelino, attaching a copy of a ledger page showing payments totaling $4,300.00, with the last payment on October 15, 2005.
• Ridao denied the increased dollar loan and the P40,000.00 loan, alleging material alterations and forged signatures on the promissory notes and loan release statements provided by Handmade Credit, as she was out of the country during the alleged subsequent transactions.
• During trial, Teofilo admitted Ridao executed a personal loan of $4,000.00, with an initial $1,000.00 released on February 20, 2004, and the remaining balance plus an additional $300.00 given to Avelino in August 2004, totaling $4,300.00.
• Teofilo admitted altering the date on Promissory Note 2000029B from February 20, 2004, to August 20, 2004, without Ridao's knowledge.
• Teofilo admitted receiving the first four payments listed in the ledger totaling $1,100.00, but disputed the last three payments ($800.00, $900.00, $1,500.00) because serial numbers of dollar bills were not recorded, a company policy. He also admitted not issuing receipts because the ledger already indicated payment.
• The RTC found the 4% monthly interest iniquitous and held that the $4,300.00 paid by Ridao was sufficient. It also declared the P40,000.00 loan void as Ridao was abroad.
• The CA found the promissory notes void due to material alterations but held Ridao liable for an unpaid balance of $3,200.00, finding insufficient proof for the last three payments in the ledger.

• Handmade Credit impliedly admitted the genuineness and due execution of the ledger (attached by Ridao to her Answer as proof of payment) by failing to file a Reply specifically denying it under oath, per Section 8, Rule 8 of the Rules of Court.
• Teofilo, Handmade Credit's representative, deliberately lied in the complaint's verification by alleging Ridao had not paid a single centavo, despite later admitting to receiving several payments during trial only after Ridao presented the ledger.
• Had Ridao not submitted the ledger as proof of payment, Handmade Credit would have been unjustly enriched.
• Ridao presented evidence of full payment of the $4,300.00 loan obligation through the ledger, shifting the burden to Handmade Credit to prove non-payment.

• The ledger presented by Ridao is not an actionable document because it merely indicates money received and does not provide the terms and conditions of the loan transaction; thus, there was no need to deny its genuineness and due execution under oath.
• While the existence of the ledger is not in issue, its regularity, particularly the last three entries for $800.00, $900.00, and $1,500.00, is questionable due to discrepancies (e.g., lack of serial numbers, only one dated entry for the last three).
• Ridao failed to provide sufficient evidence to prove full payment, specifically regarding the last three disputed entries in the ledger.
• Ridao failed to clarify why serial numbers were omitted for the later payments and who received them, thus failing to prove full settlement of the $4,300.00 loan.

• Whether the Court of Appeals committed reversible error in ordering Ridao to pay Handmade Credit the sum of $3,200.00 or its peso equivalent, with interest, despite Ridao's defense of full payment supported by a ledger and the finding that the promissory notes were void due to material alterations.

• Yes, the Court of Appeals committed reversible error. The Supreme Court granted Ridao's petition and dismissed Handmade Credit's complaint.
• The Court ruled that while the ledger is not an actionable document (as it does not establish the terms of the loan itself), its non-denial under oath does not equate to an implied admission of its genuineness and due execution. However, the ledger is admissible as evidence of payment.
• Once Ridao presented evidence of payment (the ledger, acknowledged in part by Teofilo), the burden of going forward with the evidence to prove non-payment shifted to Handmade Credit.
• Handmade Credit failed to discharge this burden. Its denial of the later payments based on the absence of dollar bill serial numbers in the ledger was insufficient, especially since Teofilo admitted they did not issue receipts and relied on the ledger due to the familial relationship with Avelino (who made the payments).
• The Court emphasized that Handmade Credit, as a lending corporation, is expected to transact fairly and exercise prudence, which includes proper record-keeping and issuance of receipts, regardless of the payor's relationship.
• The CA correctly found that the promissory notes submitted by Handmade Credit were void due to material alterations, tampering, and superimpositions made without Ridao's consent. Since these altered notes were Handmade Credit's principal evidence, their invalidity significantly weakened its claim of non-payment.
• Given Handmade Credit's questionable credibility due to the altered documents and its failure to produce competent evidence of non-payment after Ridao showed evidence of payment, its claim could not be sustained.

• Actionable Document (Rule 8, Section 7, Rules of Court) — A document is actionable when an action or defense is grounded upon such written instrument or document, meaning the specific right or obligation which is the basis of the action or defense must emanate therefrom or be evident therein. The ledger was not considered an actionable document because it merely indicated payments received and did not contain the terms and conditions of the loan from which a right or obligation could be established. Thus, failure to deny it under oath did not result in an implied admission of its genuineness and due execution.
• Burden of Proof in Payment of Obligations — The party alleging payment has the burden of proving it. However, when the debtor introduces some evidence of payment, the burden of going forward with the evidence shifts to the creditor, who then has a duty to produce evidence to show non-payment. In this case, Ridao presented the ledger as evidence of payment; thus, the burden shifted to Handmade Credit to prove the alleged non-payment of the remaining balance, which it failed to do.
• Material Alteration of Instrument — An alteration is material if it changes the date, sum payable, time or place of payment, number or relations of the parties, or medium of currency, or adds a place of payment where none is specified, or any other change which alters the effect of the instrument. Material alterations made without the assent of all parties liable thereon render the instrument void. The Court affirmed the CA's finding that the promissory notes were materially altered by Handmade Credit without Ridao's consent, thus rendering them void and unenforceable as a source of Ridao's obligation.
• Preponderance of Evidence (in Civil Cases) — This means the greater weight of the evidence, or evidence which is more convincing to the court as worthy of belief than that which is offered in opposition thereto. The Court found that Ridao's evidence of payment, coupled with the invalidity of Handmade Credit's altered documents and its failure to convincingly prove non-payment, meant Handmade Credit did not meet the required preponderance of evidence.

• "However, when the debtor introduces some evidence of payment, the burden of going forward with the evidence — as distinct from the burden of proof — shifts to the creditor. Consequently, the creditor has a duty to produce evidence to show non-payment."
• "[T]he alterations that were made without the assent of the other contracting party, Ridao, produces the effect of avoiding the instrument. Thus, the party causing the material alterations, Handmade, cannot enforce the terms of the altered promissory notes."
• "Having acknowledged that receipts were not issued and that they relied on the ledger as proof of payment on account of relationship, Handmade Credit cannot now allege non-payment by merely denying that it did not receive or collect the money in the absence of clear and competent evidence."

• Young Builders Corp. v. Benson Industries, Inc. — Cited to define an actionable document under Section 7, Rule 8 of the Rules of Court, emphasizing that the specific right or obligation must emanate from the document itself. This supported the Court's finding that the ledger was not an actionable document.
• Gumabon v. Philippine National Bank — Referenced for the rule that the one who alleges payment has the burden of proving it, but when the debtor introduces evidence of payment, the burden of going forward shifts to the creditor to show non-payment. This principle was central to the Court's analysis of the burden of proof regarding Ridao's alleged loan payments.
• BP Oil and Chemicals International Philippines, Inc. v. Total Distribution & Logistic Systems, Inc. — Cited in a footnote related to the definition of an actionable document.
• Mendoza v. Spouses Ramon, Sr. — Cited in a footnote regarding the standard of preponderance of evidence in civil cases.
• Ogawa v. Menigishi — Cited in a footnote concerning factors for determining preponderance of evidence, such as witness credibility and testimony probability.
• G & M (Phils.), Inc. v. Cruz — Cited in a footnote alongside Gumabon regarding the burden of proof for payment.

• Rules of Court, Rule 8, Section 7 (Action or defense based on document) — This section provides how to plead an actionable document. The Court explained that the ledger did not qualify as an actionable document under this rule because the loan obligation did not emanate from it.
• Rules of Court, Rule 8, Section 8 (How to contest such documents) — This section states that the genuineness and due execution of an actionable document are deemed admitted unless specifically denied under oath. Since the ledger was not deemed actionable, Handmade Credit's failure to file a reply denying it under oath did not result in an implied admission.