Proof of Payment: Why Vouchers Aren't Receipts Under Philippine Law

The Supreme Court has long held that a receipt is the best evidence of payment. But what happens when a company claims it paid a contractor using only disbursement vouchers? In Towne & City Development Corporation v. Court of Appeals (G.R. No. 135043, July 14, 2004), the Court settled this question: a voucher is not a receipt, and without supporting proof of actual payment, it carries no evidentiary weight.

The Dispute

Towne & City Development Corporation engaged contractor Guillermo Voluntad for construction and repair works at the Virginia Valley Subdivision, with a total contract cost of P1,041,359.00. Voluntad completed the work but claimed he was paid only P69,400.00, leaving a balance of P971,959.00.

The corporation countered that it had actually overpaid Voluntad by P58,189.46. To prove its defense of payment, it presented disbursement vouchers bearing Voluntad's signatures, along with the testimony of its corporate secretary who claimed she personally delivered the payments.

The Issue

The central question was whether the vouchers, which referenced check payments, constituted adequate proof of payment under Philippine law.

The Ruling

The Supreme Court denied the corporation's petition and affirmed the lower courts' findings that it still owed Voluntad P715,228.50. In doing so, the Court drew a clear distinction between vouchers and receipts.

A voucher is not a receipt. The Court explained that a voucher is merely a method of recording or tracking payments—an internal accounting procedure. Unless supported by actual payment, such as a check that was subsequently encashed or negotiated, or cash payment duly receipted, a voucher "remains a piece of paper having no evidentiary weight."

A receipt, by contrast, is a written and signed acknowledgment that money has been paid or goods delivered.

The Check Payment Rule

The Court also applied Article 1249 of the Civil Code, which provides that payment of debts in money must be made in legal tender. The delivery of checks "shall produce the effect of payment only when they have been cashed, or when through the fault of the creditor they have been impaired."

Neither exception applied in this case. The corporation failed to produce the original checks after their supposed encashment, nor could it show bank statements to corroborate the payments—even though the alleged payments occurred only about five years before the collection suit was filed.

Why This Matters

The case reinforces two important principles. First, internal records alone cannot prove payment. A company that issues a voucher but cannot show the corresponding check was encashed, or that cash was actually received, has not met its burden of proof.

Second, the case demonstrates that the "best evidence" rule for payment is not absolute. While a receipt is the best evidence, it is merely presumptive—not conclusive. Payment can also be established through other evidence, including parole evidence, provided it is sufficient and credible.

Practical Takeaways

• Vouchers are not receipts. A disbursement voucher is an internal accounting tool. To prove payment, it must be supported by evidence that the payment was actually made—such as an encashed check or a signed cash receipt.
• Keep your checks and bank statements. If payment was made by check, retain proof of encashment. The Court noted that failing to produce originals or bank statements, especially when payments were recent, weakens a payment defense.
• Article 1249 applies strictly. A check does not extinguish an obligation until it is cashed. If the debtor's own check is delivered and later dishonored, the obligation remains.
• Credibility of witnesses matters. Testimony alone, especially from an interested corporate officer, may not overcome the absence of documentary proof.
• Factual findings are hard to overturn. When both the trial court and the Court of Appeals agree on the facts, the Supreme Court will generally not review them on a Rule 45 petition.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.