G.R. No.

L-56169 June 26, 1992

TRAVEL-ON, INC., petitioner, vs. COURT OF APPEALS and ARTURO S. MIRANDA,
respondents.

Facts: Petitioner Travel-On. Inc. ("Travel-On") is a travel agency selling airline tickets on
commission basis for and in behalf of different airline companies. Private respondent Arturo S.
Miranda had a revolving credit line with petitioner. He procured tickets from petitioner on behalf
of airline passengers and derived commissions therefrom.
Travel-On filed suit before the Court of First Instance ("CFI") of Manila to collect on six (6)
checks issued by private respondent with a total face amount of P115,000.00. The complaint
averred that petitioner sold and delivered various airline tickets to respondent at a total price of
P278,201.57; that to settle said account, private respondent paid various amounts in cash and
in kind, and thereafter issued six (6) postdated checks amounting to P115,000.00 which were all
dishonored by the drawee banks. Travel-On further alleged that private respondent made
another payment of P10,000.00 reducing his indebtedness to P105,000.00. The writ of
attachment was granted by the court a quo.
Miranda argued that he had issued the postdated checks for purposes of accommodation, as he
had in the past accorded similar favors to petitioner. In support of his theory that the checks
were issued for accommodation, private respondent testified that he had issued the checks in
the name of Travel-On in order that its General Manager, Elita Montilla, could show to Travel-
On's Board of Directors that the accounts receivable of the company were still good.
The trial court ruled in favor of Miranda. The CA affirmed the decision of the trial court.

Issue: Whether respondent is still liable considering that petitioner is a holder for value

Held: YES. The Supreme Court finds that the checks are the all important evidence of
petitioner's case; that these checks clearly established private respondent's indebtedness to
petitioner; that private respondent was liable thereunder.
It is important to stress that a check which is regular on its face is deemed prima facie to have
been issued for a valuable consideration and every person whose signature appears thereon is
deemed to have become a party thereto for value. 1 Thus, the mere introduction of the
instrument sued on in evidence prima facie entitles the plaintiff to recovery. Further, the rule is
quite settled that a negotiable instrument is presumed to have been given or indorsed for a
sufficient consideration unless otherwise contradicted and overcome by other competent
evidence.
The fact that all the checks issued by private respondent to petitioner were presented for
payment by the latter would lead to no other conclusion than that these checks were intended
for encashment. There is nothing in the checks themselves (or in any other document for that
matter) that states otherwise.
In the case at bar, Travel-On was payee of all six (6) checks, it presented these checks for
payment at the drawee bank but the checks bounced. Travel-On obviously was not an
accommodated party; it realized no value on the checks which bounced.
Travel-On was entitled to the benefit of the statutory presumption that it was a holder in due
course, 4 that the checks were supported by valuable consideration.
Petition is granted.
G.R. No. 139006 November 27, 2000
REMIGIO S. ONG, petitioner, vs. PEOPLE OF THE PHILIPPINES and COURT OF APPEALS
(EIGHTH DIVISION), respondents.
Facts: Remigio Ong, at one time retained the services of Marcial de Jesus as adviser on
technical and financial matters and as President of Erocool Industries, a company controlled by
the former.
Remigio Ong approached Marcial de Jesus in his place of work in Pasay City and requested to
be accommodated a loan of P130,000.00 which he needed to pay the 13th month pay of his
employees at the Master Metal Craft. Complainant De Jesus obliged by issuing Ong a check
payable to Ong's Master Metal Craft. In order to ensure the repayment, complainant required
Mr. Ong to issue a post-dated check for the same amount. Mr. Ong therefore issued a check
dated January 16, 1993. The check was deposited in Ong's account only and debited for the
said amount of P130,000.00. At any rate, whatever the date the loan check was encashed by
Remigio Ong, what is certain was that the check was encashed for value and debited to Ong's
account.
In the meanwhile, Ong's check was deposited by Marcial De Jesus in his account at Producers
Bank which was promptly returned the following day by FEBTC for reason that it was drawn
against insufficient funds. That thereafter, De Jesus verbally notified Remigio Ong of his
bounced check several times but unacted until he made a written formal demand. For failure of
Ong to make arrangement for the payment or replacement of the bounced check, De Jesus filed
this case.
The trial court finds the accused, Remigio Ong y Salinas, guilty beyond reasonable doubt for
Violation of Section 1, Batas Pambansa Blg. 22, otherwise known as the Bouncing Check Law.
The CA likewise ruled in favor of De Jesus.

Issue: Whether Ong is guilty of BP 22

Held: YES. Petitioner's argument that the subject check was issued without consideration is
inconsequential. The law invariably declares the mere act of issuing a worthless check as
malum prohibitum. We quote with approval the appellate court's findings on this matter: “In
actions based upon a negotiable instrument, it is unnecessary to aver or prove consideration,
for consideration is imported and presumed from the fact that it is a negotiable instrument. The
presumption exists whether the words "value received" appear on the instrument or not.”
In light, however, of the rulings in the recent cases of Vaca v. Court of Appeals12 and Rosa Lim
v. People, the Court deems it best in the instant case, to limit the penalty for violation of B.P.
Blg. 22 to payment of a fine in the amount of P150,000.00.
Petition is denied.
G.R. No. 117913 February 1, 2002
CHARLES LEE, CHUA SIOK SUY, MARIANO SIO, ALFONSO YAP, RICHARD VELASCO
and ALFONSO CO, petitioners, vs. COURT OF APPEALS and PHILIPPINE BANK OF
COMMUNICATIONS, respondents.

Facts: Charles Lee, as President of MICO wrote private respondent Philippine Bank of
Communications (PBCom) requesting for a grant of a discounting loan/credit line in the sum of
PHP 3,000,000.00 for the purpose of carrying out MICO’s line of business as well as to maintain
its volume of business. On the same day, Charles Lee requested for another discounting
loan/credit line of PHP 3,000,000.00 from PBCom for the purpose of opening letters of credit
and trust receipts.
Another loan of PHP 1,000,000.00 was availed of by MICO from PBCom which was likewise
later on renewed. Charles Lee, Chua Siok Suy, Mariano Sio, Alfonso Yap and Richard Velasco,
in their personal capacities executed a Surety Agreement in favor of PBCom whereby the
petitioners jointly and severally, guaranteed the prompt payment on due dates or at maturity of
overdrafts, promissory notes, discounts, drafts, letters of credit, bills of exchange, trust receipts,
and other obligations of every kind and nature, for which MICO may be held accountable by
PBCom. Charles Lee, in his capacity as president of MICO, wrote PBCom and applied for an
additional loan in the sum of PHP 4,000,000.00. The loan was intended for the expansion and
modernization of the company’s machineries. Upon approval of the said application for loan,
MICO availed of the additional loan of PHP 4,000,000.00.
To secure the trust receipts transactions, MICO and Lee executed a real estate mortgage in
favor of PBCOM over several properties it owns. Upon maturity of all credit availments obtained
by MICO from PBCom, the latter made a demand for payment. For failure of petitioner MICO to
pay the obligations incurred despite repeated demands, PBCom extrajudicially foreclosed
MICO’s real estate mortgage and sold the said mortgaged properties in a public auction sale.
Lee contends that the letters of credit, surety agreements and loan transactions did not ripen
into valid and binding contracts since no part of the proceeds of the loan transactions were
delivered to MICO or to any of the petitioners-sureties. Petitioners-sureties allege that Chua
Siok Suy was the beneficiary of the proceeds of the loans and that the latter made them sign the
surety agreements in blank. Thus, they maintain that they should not be held accountable for
any liability that might arise therefrom.

Issues:
1. Whether or not the proceeds of the loans and letters of credit transactions were ever
delivered to MICO
2. Whether or not the individual petitioners, as sureties, may be held liable under the 2
surety agreements

Held:
1. YES. The letter of credit, as well as the security agreements, have not merely created a
prima facie case but have actually proved the solidary obligation of MICO and the
petitioners, as sureties of MICO, in favor of respondent PBCom.

While the presumption found under the Negotiable Instruments Law may not necessarily
be applicable to trust receipts and letters of credit, the presumption that the drafts drawn
in connection with the letters of credit have sufficient consideration. Under Section 3(r),
Rule 131 of the Rules of Court there is also a presumption that sufficient consideration
was given in a contract.

Hence, petitioners should have presented credible evidence to rebut that presumption as
well as the evidence presented by private respondent PBCom. The letters of credit show
that the pertinent materials/merchandise have been received by MICO. The drafts
signed by the beneficiary/suppliers in connection with the corresponding letters of credit
proved that said suppliers were paid by PBCom for the account of MICO. On the other
hand, aside from their bare denials, petitioners did not present sufficient and competent
evidence to rebut the evidence of private respondent PBCom.

2. YES. A perusal of the By-Laws of MICO, however, shows that the power to borrow
money for the company and issue mortgages, bonds, deeds of trust and negotiable
instruments or securities, secured by mortgages or pledges of property belonging to the
company is not confined solely to the president of the corporation. The Board of
Directors of MICO can also borrow money, arrange letters of credit, execute trust
receipts and promissory notes on behalf of the corporation.[35] Significantly, this power
of the Board of Directors according to the by-laws of MICO, may be delegated to any of
its standing committee, officer or agent. Hence, PBCom had every right to rely on the
Certification issued by MICO’s corporate secretary, P.B. Barrera, that Chua Siok Suy
was duly authorized by its Board of Directors to borrow money and obtain credit facilities
in behalf of MICO from PBCom.
G.R. No. 126568 April 30, 2003
QUIRINO GONZALES LOGGING CONCESSIONAIRE, QUIRINO GONZALES and EUFEMIA
GONZALES, petitioners, vs. THE COURT OF APPEALS (CA) and REPUBLIC PLANTERS
BANK, respondents.

Facts: Petitioner Quirino Gonzales Logging Concessionaire (QGLC) applied for credit
accommodation which the Bank approved. Their obligation was secured by a real estate
mortgage of parcels of land. QGLC executed a promissory note in which they defaulted. The
Bank foreclosed the property and was subsequently owned by the Bank. The Bank then filed a
complaint for a sum of money in regards to the unpaid notes.
The notes were payable 30 days after date and provided for the solidary liability in their non-
payment at maturity. Petitioners deny having received the value of the promissory notes.
The RTC sided with petitioner but the CA reversed the decision.

Issue: Whether the promissory notes are not valid for want of consideration

Held: No. The promissory notes are valid. Petitioners admission of the genuineness and due
execution of the promissory notes notwithstanding, they raise want of consideration thereof. The
promissory notes, however, appear to be negotiable as they meet the requirements of Section 1
of the Negotiable Instruments Law. Such being the case, the notes are prima facie deemed to
have been issued for consideration. It bears noting that no sufficient evidence was adduced by
petitioners to show otherwise.
Exhibits 2 to 2-B to which petitioners advert in support of their claim that the credit line on the
notes was unnecessary because they had deposits in, and remittances due from, the Bank
deserve scant consideration. Said exhibits are merely claims by petitioners under their then
proposals for a possible settlement of the case dated February 3, 1978. Parenthetically, the
proposals were not even signed by petitioners but by certain Attorneys Osmundo R. Victoriano
and Rogelio P. Madriaga.
In any case, it is no defense that the promissory notes were signed in blank as Section 14 of the
Negotiable Instruments Law concedes the prima facie authority of the person in possession of
negotiable instruments, such as the notes herein, to fill in the blanks.
C.A decision affirmed with modification.
G.R. No. 172954 October 5, 2011
ENGR. JOSE E. CAYANAN, Petitioner, vs. NORTH STAR INTERNATIONAL TRAVEL, INC.,
Respondent.

Facts: North Star extended credit to Cayanan for air tickets of clients worth PHP 510,034.47,
and for payment to View Sea Ventures of the amounts of $60,000 which came from respondent
General Manager’s (Virginia) personal account. And another $40,000 by telegraphic transfer
with $15,000 from petitioner.
Cayanan then issued 3 checks drawn from Republic Planters Bank (RPB) and 2 checks from
PCIB. When drawn for payment, the checks from PCIB amounting to 1.5M and 35,000 were
dishonored for insufficiency of funds while the 3 checks from RPB were dishonored due to a
stop payment by Cayanan. Upon demand for payment, Cayanan failed to settle.
5 violations of BP 22 were filed by North Star in MeTC, which found Cayanan guilty. On appeal,
the RTC acquitted him. The CA, however, held Cayanan civilly liable.

Issues:
1. Whether or not checks issued by Cayanan were for valuable consideration
2. Whether or not Cayanan is civilly liable to North Star for the value of the checks

Held:
1. YES. Cayanan has not presented credible evidence to rebut resumption that checks
were issued for a valuable consideration. Contrary to petitioners’ claims that North Star
did not give any valuable consideration for the checks since US$85,000 was taken from
the personal dollar account of Virginia and not the corporate funds of North Star, the fact
that petitioner himself specifically named North Star as the payee of the checks is an
admission of his liability to North Star and not to Virginia Balagtas.

Also, his defense that dollars send to View Sea in Nigeria was Virginia’s own investment
could not hold as she only remitted such money due to Cayanan’s request/instructions –
this he never denied. It was him who had business transactions with View Sea and not
Virginia. Transaction between North Star and Cayanan was actually in the nature of a
loan, and checks were issues as payment of such hence there was no absence of
consideration for the issuance of checks.

2. YES. Having failed to fully settle his obligation under the checks, the appellate court was
correct in holding petitioner liable to pay the value of the five checks he issued in favor of
North Star.