FIRSTDIVISION

BANK OF THE PHILIPPINE G.R.No.157833

ISLANDS,
Petitioner,
Present:

PUNO,C.J.,Chairperson,
SANDOVALGUTIERREZ,
versus CORONA,
AZCUNA,and
GARCIA,JJ.


Promulgated:
GREGORIOC.ROXAS,
Respondent. October15,2007

xx

DECISION

SANDOVALGUTIERREZ,J.:

For our resolution is the instant Petition for Review on Certiorari assailing the
[1]
Decision oftheCourtofAppeals(FourthDivision)datedFebruary13,2003inCAG.R.CV
No.67980.

The facts of the case, as found by the trial court and affirmed by the Court ofAppeals,
are:

GregorioC.Roxas,respondent,isatrader.SometimeinMarch1993,hedeliveredstocks
of vegetable oil to spouses Rodrigo and Marissa Cawili. As payment therefor, spouses Cawili
issued a personal check in the amount of P348,805.50. However, when respondent tried to
encashthecheck,itwasdishonoredbythedraweebank.SpousesCawilithenassuredhimthat
they would replace the bounced check with a cashiers check from the Bank of the Philippine
Islands(BPI),petitioner.

OnMarch31,1993,respondentandRodrigoCawiliwenttopetitioners branch at Shaw

Boulevard,MandaluyongCitywhereElmaCapistrano,thebranchmanager,personallyattended
tothem.UponElmasinstructions,LitaSagun,thebankteller,preparedBPICashiersCheckNo.
14428intheamountofP348,805.50,drawnagainsttheaccountofMarissaCawili,payableto
respondent.RodrigothenhandedthechecktorespondentinthepresenceofElma.

The following day, April 1, 1993, respondent returned to petitioners branch at Shaw
Boulevardtoencashthecashierscheckbutitwasdishonored.ElmainformedhimthatMarissas
accountwasclosedonthatdate.

Despiterespondentsinsistence,thebankofficersrefusedtoencashthecheckandtriedto
retrieveitfromrespondent.Hethencalledhislawyerwhoadvisedhimtodepositthecheckin
his(respondents)accountatCitytrust,OrtigasAvenue.However,thecheckwasdishonoredon
thegroundAccountClosed.

On September 23, 1993, respondent filed with the Regional Trial Court, Branch 263,
PasigCityacomplaintforsumofmoneyagainstpetitioner,docketedasCivilCaseNo.63663.
Respondentprayedthatpetitionerbeorderedtopaytheamountofthecheck,damagesandcost
ofthesuit.

Initsanswer,petitionerspecificallydeniedtheallegationsinthecomplaint,claimingthat
itissuedthecheckbymistakeingoodfaiththatitsdishonorwasduetolackofconsideration
and that respondents remedy was to sue Rodrigo Cawili who purchased the check. As a
counterclaim,petitionerprayedthatrespondentbeorderedtopayattorneysfeesandexpensesof
litigation.
 PetitionerfiledathirdpartycomplaintagainstspousesCawili.Theywerelaterdeclared
indefaultfortheirfailuretofiletheiranswer.

Aftertrial,theRTCrenderedaDecision,thedispositiveportionofwhichreads:

WHEREFORE,inviewoftheforegoingpremises,thisCourtherebyrendersjudgmentinfavor
ofhereinplaintiffandordersthedefendant,BankofthePhilippineIslands,topayGerardoC.
Roxas:

1)ThesumofP348,805.50,thefacevalueofthecashierscheck,withlegalinterestthereon
computedfromApril1,1993untiltheamountisfullypaid

2)ThesumofP50,000.00formoraldamages

3) The sum of P50,000.00 as exemplary damages to serve as an example for the public
good

4)ThesumofP25,000.00forandasattorneysfeesandthe

5)Costsofsuit.

As to the thirdparty complaint, thirdparty defendants Spouses Rodrigo and Marissa

CawiliareherebyorderedtoindemnifydefendantBankofthePhilippineIslandssuchamount(s)
adjudged and actually paid by it to herein plaintiff Gregorio C. Roxas, including the costs of
suit.

SOORDERED.


Onappeal,theCourtofAppeals,initsDecision,affirmedthetrialcourtsjudgment.

Hence,thispetition.

Petitioner ascribes to the Court of Appeals the following errors: (1) in finding that
respondentisaholderinduecourseand(2)inholdingthatit(petitioner)isliabletorespondent
fortheamountofthecashierscheck.

Section52oftheNegotiableInstrumentsLawprovides:

SEC.52.Whatconstitutesaholderinduecourse.Aholderinduecourseisaholderwho
hastakentheinstrumentunderthefollowingconditions:
 (a)Thatitiscompleteandregularuponitsface

(b)Thathebecametheholderofitbeforeitwasoverdueandwithoutnoticethatithadbeen
previouslydishonored,ifsuchwasthefact

(c)Thathetookitingoodfaithandforvalue

(d) That at the time it was negotiated to him, he had no notice of any infirmity in the
instrumentordefectinthetitleofpersonnegotiatingit.

As a general rule, under the above provision, every holder is presumed prima facie to be a
holderinduecourse.Onewhoclaimsotherwisehastheonusprobanditoprovethatoneormore
oftheconditionsrequiredtoconstituteaholderinduecoursearelacking.Inthiscase,petitioner
contendsthattheelementofvalueisnotpresent,therefore,respondentcouldnotbeaholderin
duecourse.

Petitionerscontentionlacksmerit.Section25ofthesamelawstates:

SEC. 25. Value, what constitutes. Value is any consideration sufficient to support a simple
contract.An antecedent or preexisting debt constitutes value and is deemed as such whether
theinstrumentispayableondemandoratafuturetime.





InWalkerRubberCorp.v.NederlandschIndische&Handelsbank,N.V.andSouthSeaSurety&
[2]
InsuranceCo.,Inc., thisCourtruledthatvalueingeneraltermsmaybesomeright,interest,
profit or benefit to the party who makes the contract or some forbearance, detriment, loan,
responsibility,etc.ontheotherside.Here,thereisnodisputethatrespondentreceivedRodrigo
Cawiliscashierscheckaspaymentfortheformersvegetableoil. The fact that it was Rodrigo
whopurchasedthecashierscheckfrompetitionerwillnotaffectrespondentsstatusasaholder
for value since the check was delivered to him as payment for the vegetable oil he sold to
spousesCawili.Verily,theCourtofAppealsdidnoterrinconcludingthatrespondentisaholder
induecourseofthecashierscheck.

Furthermore, it bears emphasis that the disputed check is a cashiers check. In International
[3]
CorporateBankv.SpousesGueco, thisCourtheldthatacashierscheckisreallythebanks
own check and may be treated as a promissory note with the bank as the maker. The check
becomes the primary obligation of the bank which issues it and constitutes a written
[4]
promisetopayupondemand.InNewPacificTimber&SupplyCo.Inc.v.Seeris, thisCourt
took judicial notice of the wellknown and accepted practice in the business sector that a
cashiers check is deemed as cash. This is because the mere issuance of a cashiers check is
consideredacceptancethereof.

Inviewoftheabovepronouncements,petitionerbankbecameliabletorespondentfrom
the moment it issued the cashiers check. Having been accepted by respondent, subject to no
conditionwhatsoever,petitionershouldhavepaidthesameuponpresentmentbytheformer.

WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals
(FourthDivision)inCAG.R.CVNo.67980isAFFIRMED.Costsagainstpetitioner.

SOORDERED.

ANGELINASANDOVALGUTIERREZ
AssociateJustice

WECONCUR:

REYNATOS.PUNO
ChiefJustice
Chairperson



RENATOC.CORONA ADOLFOS.AZCUNA
AssociateJustice AssociateJustice



 CANCIOC.GARCIA
AssociateJustice



CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the
conclusionsintheaboveDecisionwerereachedinconsultationbeforethecasewasassignedto
thewriteroftheopinionoftheCourtsDivision.

REYNATOS.PUNO
ChiefJustice

[1]
Rollo,pp.3644.PennedbyAssociateJusticeMartinS.Villarama,Jr.andconcurredinbyAssociateJusticeGodardoA.Jacinto
(retired)andAssociateJusticeMarioL.Guaria.
[2]
105Phil.934(1959).
[3]
404Phil.353(2001).
[4]
G.R.No.41764,December19,1980,101SCRA686.