Cayanan vs. North Star International travel Inc.

G.R. No. 172954, October 5, 2011

Q: North Star is a corporation engaged in the travel agency business. Virginia, the general
Manager of North Star, in accommodation and upon the instruction of its client, Engr. Cayanan,
sent various amounts to View Sea Ventures Ltd, in Nigeria from her personal account in
Citibank Makati. To cover payment for the said amounts, Engr. Cayanan issued five checks in
favor of North Star. The checks were dishonored for insufficiency of funds. North Star
demanded payment but Engr. Cayanan failed to settle his obligations. This prompted North
Star to institute a Criminal Case charging Engr. Cayanan with violation of the Bouncing Checks
Law. RTC acquitted Engr. Cayanan of the criminal charges. On appeal to the CA, the said court
maintained the civil liability for the value of the subject checks. The defense of Engr. Cayanan is
that the CA erred in holding him civilly liable to North Star for the value of the checks since
North Star did not give any valuable consideration for the checks. He insists that the amounts
sent to View Sea Ventures was not sent for the account of North Star but for the account of
Virginia as her investment.

Is Engr. Cayanan civilly liable for the bounced checks?

A: Yes. Under the Negotiable Instruments Law, it is presumed that every party to an instrument
acquires the same for a consideration or for value. The defense of Engr. Cayanan of lack of
consideration is without merit. It is evident that Engr. Cayanan failed to present convincing
evidence to overthrow the presumption and prove that the checks were in fact issued without
valuable consideration. It was also evident that Virginia of North Star caused the payment of
the amounts to View Sea Ventures to accommodate Engr. Cayanan, which statement the latter
failed to refute. Therefore, having failed to fully settle his obligations under the checks, Engr.
Cayanan is liable to pay for the value of the said amounts.