Proof of Payment

 "At the outset, it should be noted that respondent's defense of payment was only raised during the testimony of its first witness, Adora Co (Adora) on August 7, 1997. In its Answer, respondent merely alleged that, except for a transaction it had with petitioner sometime in May 1994, it never engaged the services of the latter for the importation of various products between April and July 1994; and that for the goods it imported in May 1994, it had given petitioner the amount of P44,710.00 to answer for the customs duties and taxes due thereon. Respondent further asserted that the goods were seized by Customs authorities because of petitioner's alleged falsification of receipts covering the payment of customs duties and taxes on the said goods; that by reason of such seizure, the goods, which were kept in open air, lost their commercial value amounting to P200,000.00. Respondent claims that it was not able to recover the value of its seized property nor did petitioner return the amount of P44,710.00 given to it by respondent.

Moreover, it is significant to note that the only issues raised by respondent in its Pre-Trial Brief are the following:

(a) Has plaintiff (herein petitioner) been engaged by defendant (herein respondent) at any time prior to the filing of the present Complaint in the "importation of various products"?

(b) Is [petitioner] guilty of gross negligence on account of the seizure of [respondent's] products due to fake or spurious receipt of payment of customs duties and taxes?

(c) Is [petitioner] liable to refund [respondent] the amount of P44,710.00, received by the former from the latter for the payment of customs duties and taxes assessed on said imported goods?

(d) Is [petitioner] liable to reimburse the amount of P44,710.00 to [respondent] after the latter has paid the said amount to the Bureau of Customs for the release of the imported goods which [petitioner] undertook to release and deliver to [respondent's] customer in Makati City? and

(e) Is [petitioner] liable to defendant for damages and attorney's fees incurred by the latter due to [petitioner's] gross negligence?23

Nowhere in its Answer or in its Pre-Trial Brief did respondent raise the defense that it had already paid petitioner its obligations. As earlier mentioned, respondent denied having entered into the subject transactions for which petitioner seeks payment. To repeat, it was only during the testimony of respondent’s witness, Adora, that respondent claimed payment by presenting in evidence 28 original copies of the subject invoices which Adora claimed to have found two days before she was due to testify in court.

Preliminarily, it is necessary to discuss the effect of failure of petitioner to plead payment of its obligations.

Section 1, Rule 9 of the Rules of Court provides:

Section 1. Defenses and objections not pleaded. - Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that there is another action pending between the same parties for the same cause, or that the action is barred by prior judgment or by statute of limitations, the court shall dismiss the claim.

In the present case, despite failure of the respondent to raise the defense of payment in its answer, the trial court cannot be faulted for admitting the testimonial and documentary evidence of respondent to prove payment, over the objection of petitioner. The trial court's action is in consonance with Section 5, Rule 10 of the Rules of Court, to wit:

Section 5. Amendment to conform to or authorize presentation of evidence. - When issues not raised by the pleadings are tried with the express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure to amend does not affect the result of the trial of these issues. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so with liberality if the presentation of the merits of the action and the ends of substantial justice will be subserved thereby. The court may grant a continuance to enable the amendment to be made.

Interpreting Section 4, Rule 17 of the Rules of Court prior to its amendment in 1997, the provisions of which were essentially the same as the above-quoted Section 5, Rule 10, the Court in Co Tiamco v. Diaz24held that:

x x x when evidence is offered on a matter not alleged in the pleadings, the court may admit it even against the objection of the adverse party, where the latter fails to satisfy the court that the admission of the evidence would prejudice him in maintaining his defense upon the merits, and the court may grant him continuance to enable him to meet the new situation created by the evidence.25

The above pronouncement was reiterated in the more recent case of Ong v. Court of Appeals.26

In the instant case, there is no showing that the admission of respondent's evidence would unduly prejudice petitioner in maintaining his claims. Besides, petitioner was given ample opportunity to refute the evidence presented by respondent.

Furthermore, even if respondent's answer was not amended to conform to the evidence it presented, it does not preclude the trial court from adjudicating the issue of payment. Citing of Bank of America, NT & SA v. American Realty Corporation27 and Talisay-Silay Milling Co., Inc. v. Asociacion de Agricultores de Talisay-Silay, Inc.,28 this Court held in Mercader v. Development Bank of the Philippines (Cebu Branch)[29]that:

The failure of a party to amend a pleading to conform to the evidence adduced during trial does not preclude adjudication by the court on the basis of such evidence which may embody new issues not raised in the pleadings. x x x Although, the pleading may not have been amended to conform to the evidence submitted during trial, judgment may nonetheless be rendered, not simply on the basis of the issues alleged but also on the issues discussed and the assertions of fact proved in the course of the trial. The court may treat the pleading as if it had been amended to conform to the evidence, although it had not been actually amended. x x x Clearly, a court may rule and render judgment on the basis of the evidence before it even though the relevant pleading had not been previously amended, so long as no surprise or prejudice is thereby caused to the adverse party. Put a little differently, so long as the basic requirements of fair play had been met, as where the litigants were given full opportunity to support their respective contentions and to object to or refute each other's evidence, the court may validly treat the pleadings as if they had been amended to conform to the evidence and proceed to adjudicate on the basis of all the evidence before it.30 (Emphasis supplied)

This principle is in consonance with the one enunciated by the Court in Sy v. Court of Appeals,31 that where there is a variance in the defendant's pleadings and the evidence adduced at the trial, the court may treat the pleading as amended to conform to the evidence."

ROYAL CARGO CORPORATION, petitioner,

vs. DFS SPORTS UNLIMITED, INC., respondent. G.R. No. 158621, December 10, 2008.

https://lawphil.net/judjuris/juri2008/dec2008/gr_158621_2008.html