TOPIC Section 24

CASE NO. G.R. No. 198660

CASE NAME Pua v Spouses Tiong and Teng
MEMBER Pierre Macalino

DOCTRINE
1. If the creditor submits an instrument which evidences the indebtedness, a presumption that
the credit has not been satisfied arises in her favor.
2. Every negotiable instrument is deemed prima face to have been issued for a valuable
consideration; every person whose signature appears thereon to have became a party for a
value.

RECIT-READY DIGEST
FACTS
 1988: Spouses Tiong and Teng obtained a loan from Pua amounting to P1.9 million.
Spouses Tiong gave 17 post-dated checks for the loan. These are the 1988 checks.
o These were given by Pua because her sister, Lilian who was then a business partner
of Spouses Tiong, assured her of Spouses’ Tiong credibility.
o These checks were dishonored upon presentment by Pua to the drawee bank.
o Pua gave them an extension to pay the debt.
 1996: Spouses Tiong then wanted to fulfill their obligation so they called Pua for the
computation of their debt. With an agreed 2% compounded interest rate, the amount rose
to P13 million. Spouses Tiong asked Pua to reduce the amount to P8.5 million. Since Pua
wanted to get paid as soon as possible, he agreed.
o Asiatrust Check (1996 check) was then issued for this purpose, with the assurance
from Spouses Tiong that the check was good.
o Respondents demanded the return of the 1988 checks because of this, but
petitioners refused and said that she will do so only after encashment of the 1996
check.
 The 1996 check was also dishonored. Hence, a case for recovery of sum of money was
filed by Pua against Spouses Tiong.
Contentions
 Respondents: completely denied the existence of the loan from both 1988 and 1996. They
claim that the checks came from a previous gambling business went sour that they had with
Lian (petitioner’s sister) and that the same checks are just being used to destroy their
reputation.
 Petitioners: presented copies of the 1988 and 1996 checks as proof.
ISSUE/S and HELD

RATIO
 In a suit for a recovery of sum of money, the creditor has the burden of proof to show that
the defendant had not paid her amount of the contracted loan.
o If the creditor submits an instrument which evidences the indebtedness, a
presumption that the credit has not been satisfied arises in her favor.
 A check constitutes an evidence of indebtedness and is a veritable proof of an obligation.

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 o It partakes of a representation that the drawer has funds sufficient to ensure payment
upon its presentation to the bank.
o This is evident in Section 24 of the NIL (presumption of consideration)
Every negotiable instrument is deemed prima face to have been issued for a
valuable consideration; every person whose signature appears thereon to have
became a party for a value.
Writer’s note: The Court did not make the connection between Sec 24 and the evidence of indebtedness.
But note that if the check is presumed to be for valuable consideration, then there is a presumption of
at least a creditor-debtor relationship. This arises from the fact that if the check is for valuable
consideration, then the transaction is not gratuitous but rather onerous.

 With regard to the 1988 checks: The 17 original checks (1988 checks), completed and
delivered to petitioner, are sufficient by themselves to prove the existence of the loan
obligation of the respondents to petitioner.
o Contention: The checks were given to various other persons and petitioner had
simply collected all these 17 checks from them in order to damage respondents’
reputation.
o Held: Respondent Caroline did not deny the genuineness of these checks. Court
said that this contention is untenable because it runs counter to human experience.
Sec. 16 of the NIL provides that
When an instrument is no longer in the possession of the person who signed
it and it is complete n its terms “a valid and intentional delivery by him is
presumed until the contrary is proved”
 With regard to the 1996 check (Asiatrust check): Respondent’s contention was that they
were acquitted from the criminal cases of BP 22 filed against them.
o Held: While they were acquitted from their criminal liability, they were still found
civilly liable to pay the amount of the checks. Quantum of evidence in civil cases
is only preponderance evidence.
 Benito Tiong also wants to escape liability by saying that the checks were solely issued by
Caroline (his wife).
o Held: it is presumed that the proceeds of the loan redounded to the benefit of their
family

DISPOSTIVE PORTION
WHEREFORE, the Motion for Reconsideration is GRANTED. The Resolution of this Court dated
April 18, 2012 is set aside and a new one entered REVERSING and SETTING ASIDE the
Decision dated March 31, 2011 and the Resolution dated September 26, 2011 of the Court of
Appeals in CA-G.R. CV No. 93755. The Decision in Civil Case No. 97-83027 of the Regional
Trial Court (RTC) of the City of Manila, Branch 29 is REINSTATED with MODIFICATION.