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Factual Antecedents
On November 19, 1998, respondent BPI filed before the Metropolitan Trial
Court (MeTC) of Manila a Complaint[14] for Replevin and Damages,
docketed as Civil Case No. 161617 and raffled to Branch 6, against
petitioner-spouses.[15] The summons, however, remained unserved,
prompting the MeTC to dismiss the case without prejudice.[16] Respondent
BPI moved for reconsideration on the ground that it was still verifying the
exact address of petitioner-spouses.[17] On March 21, 2002, the MeTC set
aside the dismissal of the case.[18] On April 24, 2002, summons was served
on petitioner-spouses.[19]
Haplessly, therefore, the required notice and proof of such loss have not
been satisfied.[33]
On appeal,[35] the RTC, Branch 34, reversed the MeTC Decision. Unlike the
MeTC, the RTC gave credence to the testimony of petitioner Manolito that
he informed Citytrust of the theft of the mortgaged vehicle by sending
through fax all the necessary documents.[36] According to the RTC, since
there was sufficient notice of the theft, respondent BPI should have
collected the proceeds of the insurance policy and applied the same to the
remaining obligation of petitioner-spouses.[37] The fallo of the RTC
Order[38] dated July 18, 2005 reads:
The Complaint and the counterclaim are hereby DISMISSED for lack of
merit.
SO ORDERED.[39]
Aggrieved, respondent BPI elevated the case to the CA via a Petition for
Review under Rule 42 of the Rules of Court.
On November 16, 2007, the CA reversed and set aside the RTC Order and
reinstated the MeTC Decision, thus:
SO ORDERED.[40]
Manila (Branch 34), dated July 18, 2005, in Civil Case No. 05-111630, is
REVERSED and SET ASIDE and the Decision of the Metropolitan Trial
Court of Manila (Branch 6) is REINSTATED with the [lone] modification
that the therein ordered payment of 5% interest per month as late payment
charges, is reduced to 1% interest per month from date of default on August
10, 1997 until fully paid.
No pronouncement as to costs."
IT IS SO ORDERED.[42]
Issue
Petitioner-spouses' Arguments
Our Ruling
The party who alleges a fact has the burden of proving it.
Section 1, Rule 131 of the Rules of Court defines "burden of proof" as "the
duty of a party to present evidence on the facts in issue necessary to
establish his claim or defense by the amount of evidence required by law."
In civil cases, the burden of proof rests upon the plaintiff, who is required
to establish his case by a preponderance of evidence.[55] Once the plaintiff
has established his case, the burden of evidence shifts to the defendant,
who, in turn, has the burden to establish his defense.[56]
However, as aptly pointed out by the MeTC, the mere loss of the mortgaged
vehicle does not automatically relieve petitioner-spouses of their
obligation[57] as paragraph 7 of the Promissory Note with Chattel Mortgage
provides that:
xxxx
x x x x[58]
Based on the foregoing, the mortgagor must notify and submit proof of loss
to the mortgagee. Otherwise, the mortgagee would not be able to claim the
proceeds of the insurance and apply the same to the remaining obligation.
Testimonial evidence, to be believed, must come not only from the mouth
of a credible witness, but must also "be credible, reasonable, and in accord
with human experience."[59] A credible witness must, therefore, be able to
narrate a convincing and logical story.
In this case, petitioner Manolito's testimony that he sent notice and proof of
loss of the mortgaged vehicle to Citytrust through fax lacks credibility
especially since he failed to present the facsimile report evidencing the
transmittal.[60] His failure to keep the facsimile report or to ask for a written
acknowledgement from Citytrust of its receipt of the transmittal gives us
reason to doubt the truthfulness of his testimony. His testimony on the
alleged theft is likewise suspect. To begin with, no police report was
presented.[61] Also, the insurance policy was renewed even after the
mortgaged vehicle was allegedly stolen.[62] And despite repeated demands
from respondent BPI, petitioner-spouses made no effort to communicate
with the bank in order to clarify the matter. The absence of any overt act on
the part of petitioner-spouses to protect their interest from the time the
mortgaged vehicle was stolen up to the time they received the summons
defies reason and logic. Their inaction is obviously contrary to human
experience. In addition, we cannot help but notice that although the
mortgaged vehicle was stolen in November 1997, petitioner-spouses
defaulted on their monthly amortizations as early as August 10, 1997. All
these taken together cast doubt on the truth and credibility of his
testimony.
Thus, we are in full accord with the findings of the MeTC and the CA that
petitioner Manolito's testimony lacks credence as it is dubious and self-
serving.[63] Failing to prove their defense, petitioner-spouses are liable to
pay their remaining obligation.
SO ORDERED.