Nego (Consideration)

[G.R. No. 139006.
November 27, 2000]

REMIGIO S. ONG, petitioner, vs. PEOPLE OF THE PHILIPPINES and COURT OF
APPEALS (EIGHTH DIVISION), respondents.
RESOLUTION
KAPUNAN, J.:
At bar is a petition for certiorari under Rule 45 of the 1997 Rules of Civil Procedure, filed by petitioner Remigio S. Ong seeking to reverse and set aside the Decision, dated March 19, 1999;
and, Resolution, dated June 3, 1999, of the Honorable Court of Appeals in CA-G.R. No. 18421 entitled "People of the Philippines vs. Remigio S. Ong."
The antecedent facts, as found by the trial court are quoted hereunder, as follows:
That private complainant Marcial de Jesus and accused Remigio Ong are both businessmen who came to know each other since 1988 as supplier(s) of some companies. Marcial de Jesus owns
the Sevrin Integrated Resources located at 3184 E. Rivera St., Pasay City, and accused Remigio Ong, the Master Metal Craft with business address at 562 Tomas Mapua St., Sta. Cruz, Manila.
Remigio Ong, in fact 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.
That on December 17, 1992, 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 Producers Bank check No. 489427 (Exh. "A") payable to Ong's Master Metal
Craft. In order to insure the repayment, complainant required Mr. Ong to issue a post-dated check for the same amount to become due on January 16, 1993. Mr. Ong therefore issued FEBTC
Check No. 381937, dated January 16, 1993 (Exh. "B"). Exh. "A-4" show(s) that Remigio Ong negotiated the Producers Bank Check issued to him by De Jesus on the same day, December 17,
1992, although this is at variance with Exh. "F-6" (FEBTC statement of account of Remigio Ong) which show(s) that the check was deposited in Ong's account only on May 26, 1993 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 as shown by Exh. "F-6."
In the meanwhile, Ong's FEBTC check (Exh. "B") dated January 16, 1993 was deposited by Marcial De Jesus in his account at Producers Bank on May 26, 1993 (same date Remigio Ong
deposited De Jesus' check) which was promptly returned the following day by FEBTC for reason that it was drawn against insufficient funds (DAIF), meaning, the check was dishonored by
FEBTC for lack of sufficient funds (Exh. "B" and "C" - check No. 381937 and Return advise, respectively). That thereafter, De Jesus verbally notified Remigio Ong of his bounced check several
times but unacted (sic) until made a written formal demand (Exh. "D") on September 10, 1993. For failure of Ong to make arrangement for the payment or replacement of the bounced check,
De Jesus filed this case.[1]
After trial on the merits, the court a quo rendered a decision, the dispositive portion of which reads as follows:
WHEREFORE, the 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, and sentences him to suffer a straight penalty of six (6) months and one (1) day of imprisonment, to pay a fine of P150,000.00 without subsidiary imprisonment in case of insolvency
and to pay the costs. The accused is likewise ordered to pay civil indemnity in the amount of P130,000.00.
SO ORDERED.[2]
On appeal, petitioner alleged that the subject check was not issued "on account or for value;" and, that a mere photocopy of the demand letter is not admissible in evidence. The Court of
Appeals, however, dismissed the appeal for lack of merit and affirmed the trial court's decision, dated May 5, 1995, in toto.[3]
Hence, the instant petition for certiorari wherein petitioner makes the following assignment of errors:
I
1 | NEGOTIABLE INSTRUMENTS
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN AFFIRMING THE DECISION OF THE LOWER COURT CONVICTING PETITIONER OF THE CHARGE OF VIOLATION OF BATAS PAMBANSA
BLG. 22 WHEN THE QUESTIONED FEBTC CHECK WAS ONLY A CONTINGENT PAYMENT OF PETITIONER'S COMPANY LOAN WHICH WAS NOT BEEN (sic) PROVEN TO HAVE BEEN EXTENDED AND
ACTUALLY USED, THUS, THE SAID CHECK WAS NOT ISSUED "TO APPLY ON ACCOUNT OR FOR VALUE" WITHIN THE CONTEMPLATION OF THE LAW.
II
THE HONORABLE COURT OF APPEALS LIKEWISE SERIOUSLY ERRED IN AFFIRMING THE LOWER COURT'S DECISION CONVICTING PETITIONER ON THE BASIS OF MERE XEROX DEMAND LETER
(sic) CONTRARY TO SECTION 4, RULE 130, REVISED RULES OF COURT AND PROOF OF SUCH DEMAND IS JURISDICTIONAL REQUIREMENT IN BATAS PAMBANSA BLD. (sic) 22.[4]
In gist, petitioner contends that the Court of Appeals affirmed the judgment of conviction of the lower court despite the lack of evidence of receipt of the proceeds of the loan obligation from
complainant Company. In other words, there was no evidence that the Producers Bank check issued by private complainant in his favor was ever encashed by him. Therefore, he alleges, the
subject check cannot be considered drawn and issued "to apply on account or for value." Furthermore, according to petitioner, the Court of Appeals erroneously affirmed the conviction in
complete disregard of the basic and mandatory practice of companies in executing vouchers and/or invoice as proof of receipt of the loan obligation which is clearly lacking and absent in the
case at bar. Hence, he reiterates, that the bounced check was not drawn and issued to apply on account or for value.[5]
Petitioner further asseverates that the Court of Appeals erred in affirming the trial court's decision on the basis of a mere photocopy of the demand letter and without proof of loss of the
original as required by law. He contends that proof of demand is jurisdictional.[6]
Petitioner's contentions are devoid of merit.
The trial court as well as the Court of Appeals have found that the prosecution clearly established the existence of the loan and the subsequent encashment of the Producers Bank check. It
has also been established that petitioner issued the subject FEBTC check, and that said check was subsequently dishonored for being drawn against insufficient funds. These facts
irretrievably bring petitioner within the purview of Section 1 of B.P. Blg. 22.
On petitioner's contention that the check was not drawn on account or for value, the law and jurisprudence is clear on this matter. In the case of Cruz vs. Court of Appeals,[7] this Court had
occasion to rule that:
What the law punishes is the issuance of a bouncing check, not the purpose for which it was issued nor the terms and conditions relating to its issuance. The mere act of issuing a worthless
check is malum prohibitum.
The gravamen of the offense punished by B.P. 22 is the act of making and issuing a worthless check or a check that is dishonored upon its presentation for payment. It is not the non-payment
of an obligation which the law punishes. The law is not intended or designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under pain of penal sanctions, the making
of worthless checks and putting them in circulation.[8]
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 (Agbayani, A.F., Commentaries and Jurisprudence on the Commercial Laws of the Philippines,
1989 Ed., Vol. 1, p. 227, emphasis supplied). Furthermore, such contention is also inconsequential in Batas Pambansa Blg. 22.
xxx
In Que vs. People (154 SCRA 161), the Supreme Court stated that it is the clear intention of the framers of Batas Pambansa Blg. 22 to make the mere act of issuing a worthless check malum
prohibitum. In prosecutions for violation of B.P. Blg. 22, therefore, prejudice or damage is not a pre-requisite for conviction. In the more recent case of People vs. Nitafan (215 SCRA 79), the
Supreme Court ruled that the argument surrounding the issuance of the checks need not be first looked into, since the law clearly provides that the mere issuance of any kind of check,
regardless of the intent of the parties; i.e., whether the check was intended merely to serve as a guarantee or deposit, but which check was subsequently dishonored, makes the person who
issued the check liable. The intent of the law is to curb the proliferation of worthless checks and to protect the stability and integrity of checks as a means of payment of obligation (Lazaro vs.
Court of Appeals, 227 SCRA 723, 726-727).[9]
Petitioner claims that the Court of Appeals erred in affirming the trial court's decision on the basis of a photocopy of the demand letter, arguing that the prosecution failed to produce the
original thereof. A perusal of the trial court's decision, however, will reveal that it had satisfactorily ruled on this issue, thus:
In regards to the alleged inadmissibility of a Xerox copy of the demand letter (Exh. "D") in the absence of proof of loss of the original, said objection is unavailing in the light of the fact that
the original has already been shown and identified in Court when complainant Marcial De Jesus testified on it on direct examination (TSN: Febre, p. 17, Aug. 2, 1994) and cross examined on it
by defense counsel Atty. Bihag, thus -Atty. Bihag:
Q: In other words, George De Ocampo that time you sent this demand letter was a member of Euro Cool Craft? (TSN: Febre, p. 27, Aug. 2, 1994).[10]
It is well-settled in criminal jurisprudence that where the issue is one of credibility of witnesses, the appellate court will generally not disturb the findings of the trial court, considering it was
in a better position to settle such issue. Indeed, the trial court has the advantage of hearing the witness and observing his conduct during trial, circumstances which carry a great weight in
appreciating his credibility.[11]
In the case at bar, the trial court had seen the original copy of the demand letter and had been satisfied with the identification thereof by complainant Marcial De Jesus. We are not inclined to
disturb said court's findings.
In light, however, of the rulings in the recent cases of Vaca v. Court of Appeals[12] and Rosa Lim v. People,[13] 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. Following our rationale in the aforesaid cases, the Court believes that it would best serve the ends of criminal justice if in fixing
the penalty within the range of discretion allowed by Sec. 1, par. 1, the same philosophy underlying the Indeterminate Sentence Law is observed, namely, that of redeeming valuable human
material and preventing unnecessary deprivation of personal liberty and economic usefulness with due regard to the protection of the social order.[14]
Consequently, we delete the prison sentence of six (6) months and one (1) day. The imposition of a fine of P150,000.00 and payment of civil indemnity in the amount of P130,000.00, as well
as the costs of the suit, are appropriate and sufficient.
WHEREFORE, in view of the foregoing, we AFFIRM the decision of the Court of Appeals WITH THE MODIFICATION that the sentence of imprisonment is DELETED. Petitioner is hereby ordered to
pay a fine of P150,000.00. He is likewise ordered to pay civil indemnity in the amount of P130,000.00, and the costs of the suit. SO ORDERED.
G.R. No. L-56169 June 26, 1992
TRAVEL-ON, INC., petitioner,
vs.
COURT OF APPEALS and ARTURO S. MIRANDA, respondents.
RESOLUTION
FELICIANO, J.:
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.
On 14 June 1972, 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, with a prayer for the issuance of a writ of preliminary attachment and attorney's fees, averred that from 5 August 1969 to 16 January 1970, 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 in March 1972, 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.
In his answer, private respondent admitted having had transactions with Travel-On during the period stipulated in the complaint. Private respondent, however, claimed that he had already
fully paid and even overpaid his obligations and that refunds were in fact due to him. He argued that he had issued the postdated checks for purposes of accommodation, as he had in the
past accorded similar favors to petitioner. During the proceedings, private respondent contested several tickets alleged to have been erroneously debited to his account. He claimed
reimbursement of his alleged over payments, plus litigation expenses, and exemplary and moral damages by reason of the allegedly improper attachment of his properties.
In support of his theory that the checks were issued for accommodation, private respondent testified that he bad 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. He further stated that Elita Montilla tried to encash the
same, but that these were dishonored and were subsequently returned to him after the accommodation purpose had been attained.
Travel-On's witness, Elita Montilla, on the other hand explained that the "accommodation" extended to Travel-On by private respondent related to situations where one or more of its
passengers needed money in Hongkong, and upon request of Travel-On respondent would contact his friends in Hongkong to advance Hongkong money to the passenger. The passenger then
paid Travel-On upon his return to Manila and which payment would be credited by Travel-On to respondent's running account with it.
In its decision dated 31 January 1975, the court a quo ordered Travel-On to pay private respondent the amount of P8,894.91 representing net overpayments by private respondent, moral
damages of P10,000.00 for the wrongful issuance of the writ of attachment and for the filing of this case, P5,000.00 for attorney's fees and the costs of the suit.
The trial court ruled that private respondent's indebtedness to petitioner was not satisfactorily established and that the postdated checks were issued not for the purpose of encashment to
pay his indebtedness but to accommodate the General Manager of Travel-On to enable her to show to the Board of Directors that Travel-On was financially stable.
Petitioner filed a motion for reconsideration that was, however, denied by the trial court, which in fact then increased the award of moral damages to P50,000.00.
On appeal, the Court of Appeals affirmed the decision of the trial court, but reduced the award of moral damages to P20,000.00, with interest at the legal rate from the date of the filing of the
Answer on 28 August 1972.
Petitioner moved for reconsideration of the Court of Appeal's' decision, without success.
In the instant Petition for Review, it is urged that the postdated checks are per se evidence of liability on the part of private respondent. Petitioner further argues that even assuming that the
checks were for accommodation, private respondent is still liable thereunder considering that petitioner is a holder for value.
Both the trial and appellate courts had rejected the checks as evidence of indebtedness on the ground that the various statements of account prepared by petitioner did not show that Private
respondent had an outstanding balance of P115,000.00 which is the total amount of the checks he issued. It was pointed out that while the various exhibits of petitioner showed various
accountabilities of private respondent, they did not satisfactorily establish the amount of the outstanding indebtedness of private respondent. The appellate court made much of the fact that
the figures representing private respondent's unpaid accounts found in the "Schedule of Outstanding Account" dated 31 January 1970 did not tally with the figures found in the statement
which showed private respondent's transactions with petitioner for the years 1969 and 1970; that there was no satisfactory explanation as to why the total outstanding amount
of P278,432.74 was still used as basis in the accounting of 7 April 1972 considering that according to the table of transactions for the year 1969 and 1970, the total unpaid account of private
respondent amounted to P239,794.57.
We have, however, examined the record and it shows that the 7 April 1972 Statement of Account had simply not been updated; that if we use as basis the figure as of 31 January 1970 which
is P278,432.74 and from it deduct P38,638.17 which represents some of the payments subsequently made by private respondent, the figure P239,794.57 will be obtained.
Also, the fact alone that the various statements of account had variances in figures, simply did not mean that private respondent had no more financial obligations to petitioner. It must be
stressed that private respondent's account with petitioner was a running or open one, which explains the varying figures in each of the statements rendered as of a given date.
The appellate court erred in considering only the statements of account in determining whether private respondent was indebted to petitioner under the checks. By doing so, it failed to give
due importance to the most telling piece of evidence of private respondent's indebtedness the checks themselves which he had issued.
Contrary to the view held by the Court of Appeals, this 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. 2
In the case at bar, the Court of Appeals, contrary to these established rules, placed the burden of proving the existence of valuable consideration upon petitioner. This cannot be
countenanced; it was up to private respondent to show that he had indeed issued the checks without sufficient consideration. The Court considers that Private respondent was unable to rebut
satisfactorily this legal presumption. It must also be noted that those checks were issued immediately after a letter demanding payment had been sent to private respondent by petitioner
Travel-On.
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.
We are unable to accept the Court of Appeals' conclusion that the checks here involved were issued for "accommodation" and that accordingly private respondent maker of those checks was
not liable thereon to petitioner payee of those checks.
In the first place, while the Negotiable Instruments Law does refer to accommodation transactions, no such transaction was here shown. Section 29 of the Negotiable Instruments Law
provides as follows:
Sec. 29. Liability of accommodation party. An accommodation party is one who has signed the instrument as maker, drawer, acceptor, or indorser, without receiving value
therefor, and for the purpose of lending his name to some other person. Such a person is liable on the instrument to a holder for value, notwithstanding such holder, at the
time of taking the instrument, knew him to be only an accommodation party.
In accommodation transactions recognized by the Negotiable Instruments Law, an accommodating party lends his credit to the accommodated party, by issuing or indorsing a check
which is held by a payee or indorsee as a holder in due course, who gave full value therefor to the accommodated party. The latter, in other words, receives or realizes full value
which the accommodated party then must repay to the accommodating party, unless of course the accommodating party intended to make a donation to the accommodated
party. But the accommodating party is bound on the check to the holder in due course who is necessarily a third party and is not the accommodated party. Having issued or indorsed
the check, the accommodating party has warranted to the holder in due course that he will pay the same according to its tenor. 3
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. 5 Private respondent maker
of the checks did not successfully rebut these presumptions. The only evidence aliunde that private respondent offered was his own self-serving uncorroborated testimony. He claimed that he
had issued the checks to Travel-On as payee to "accommodate" its General Manager who allegedly wished to show those checks to the Board of Directors of Travel-On to "prove" that Travel-
On's account receivables were somehow "still good." It will be seen that this claim was in fact a claim that the checks were merely simulated, that private respondent did not intend to bind
himself thereon. Only evidence of the clearest and most convincing kind will suffice for that purpose; 6 no such evidence was submitted by private respondent. The latter's explanation was
denied by Travel-On's General Manager; that explanation, in any case, appears merely contrived and quite hollow to us. Upon the other hand, the "accommodation" or assistance extended to
Travel-On's passengers abroad as testified by petitioner's General Manager involved, not the accommodation transactions recognized by the NIL, but rather the circumvention of then existing
foreign exchange regulations by passengers booked by Travel-On, which incidentally involved receipt of full consideration by private respondent.
Thus, we believe and so hold that private respondent must be held liable on the six (6) checks here involved. Those checks in themselves constituted evidence of indebtedness of private
respondent, evidence not successfully overturned or rebutted by private respondent.
Since the checks constitute the best evidence of private respondent's liability to petitioner Travel-On, the amount of such liability is the face amount of the checks, reduced only by the
P10,000.00 which Travel-On admitted in its complaint to have been paid by private respondent sometime in March 1992.
The award of moral damages to Private respondent must be set aside, for the reason that Petitioner's application for the writ of attachment rested on sufficient basis and no bad faith was
shown on the part of Travel-On. If anyone was in bad faith, it was private respondent who issued bad checks and then pretended to have "accommodated" petitioner's General Manager by
assisting her in a supposed scheme to deceive petitioner's Board of Directors and to misrepresent Travel-On's financial condition.
ACCORDINGLY, the Court Resolved to GRANT due course to the Petition for Review on Certiorari and to REVERSE and SET ASIDE the Decision dated 22 October 1980 and the Resolution of 23
January 1981 of the Court of Appeals, as well as the Decision dated 31 January 1975 of the trial court, and to enter a new decision requiring private respondent Arturo S. Miranda to pay to
petitioner Travel-On the amount of P105,000.00 with legal interest thereon from 14 June 1972, plus ten percent (10%) of the total amount due as attorney's fees. Costs against Private
respondent.
DIGEST:
TRAVEL ON V. CA
210 SCRA 351
FACTS:
Petitioner was a travel agency involved in ticket sales on a commission basis for and on behalf of different airline companies.
company. He procured tickets on behalf of others and derived commissions from it.
Miranda has a revolving credit line with the
Petitioner filed a collection suit against Miranda for the unpaid amount of six checks. Petitioner alleged that Miranda procured tickets from them which he paid with cash and
checks but the checks were dishonored upon presentment to the bank. This was being refuted by Miranda by saying
that he actually paid for his obligations, even in the excess. He argued that the checks were for accommodation purposes only. The company needed to show to its Board of
Directors that its accounts receivable was in good standing. The RTC and CA held Miranda not to be liable.
HELD:
Reliance by the lower and appellate court on the companys financial statements were wrong, to see if Miranda was liable or not. This financial statements were actually not updated to
show that there was indebtedness on the part of Miranda. The best evidence that the courts should have looked at were the checks itself. There is a prima facie presumption that a
check was issued for valuable consideration and the provision puts the burden upon the drawer to disprove this presumption. Miranda was unable to relieve himself of this burden.
Only clear and convincing evidence and not mere self-serving evidence of drawer can rebut this presumption.
The company was entitled to the benefit conferred by the statutory
provision. Miranda failed to show that the checks werent issued for any valuable consideration. The checks were
clear by stating that the company was the payee and not a mere accommodated party. And also, notice was given to the fact that the checks were issued after a written
demand by the company regarding Mirandas unpaid liabilities.
[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.
[G.R. NO. 117914. February 1, 2002]
MICO METALS CORPORATION, petitioner, vs. COURT OF APPEALS and PHILIPPINE
BANK OF COMMUNICATIONS, respondents.
DECISION
DE LEON, JR., J:
Before us is the joint and consolidated petition for review of the Decision[1] dated June 15, 1994 of the Court of Appeals in CA-G.R. CV No. 27480 entitled, Philippine Bank of Communications
vs. Mico Metals Corporation, Charles Lee, Chua Siok Suy, Mariano Sio, Alfonso Yap, Richard Velasco and Alfonso Co, which reversed the decision of the Regional Trial Court (RTC) of Manila,
Branch 55 dismissing the complaint for a sum of money filed by private respondent Philippine Bank of Communications against herein petitioners, Mico Metals Corporation (MICO, for brevity),
Charles Lee, Chua Siok Suy,[2] Mariano Sio, Alfonso Yap, Richard Velasco and Alfonso Co.[3] The dispositive portion of the said Decision of the Court of Appeals, reads:
WHEREFORE, the decision of the Regional Trial Court is hereby reversed and in lieu thereof, a new one is entered:
a) Ordering the defendants-appellees jointly and severally to pay plaintiff PBCom the sum of Five million four hundred fifty-one thousand six hundred sixty-three pesos and ninety centavos
(P5,451,663.90) representing defendants-appellees unpaid obligations arising from ordinary loans granted by the plaintiff plus legal interest until fully paid.
b) Ordering defendants-appellees jointly and severally to pay PBCom the sum of Four hundred sixty-one thousand six hundred pesos and sixty-six centavos (P46 1,600.66) representing
defendants-appellees unpaid obligations arising from their letters of credit and trust receipt transactions with plaintiff PBCom plus legal interest until fully paid.
c) Ordering defendants-appellees jointly and severally to pay PBCom the sum of P50,000.00 as attorneys fees.
No pronouncement as to costs.
The facts of the case are as follows:
On March 2, 1979, 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 Three Million Pesos (P3,000,000.00) for the purpose of carrying out MICOs 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 Three Million Pesos (P3,000,000.00) from PBCom for the purpose of opening letters of credit and trust
receipts.
In connection with the requests for discounting loan/credit lines, PBCom was furnished by MICO the following resolution which was adopted unanimously by MICOs Board of Directors:
RESOLVED, that the President, Mr. Charles Lee, and the Vice-President and General Manager, Mr. Mariano A. Sio, singly or jointly, be and they are duly authorized and empowered for and in
behalf of this Corporation to apply for, negotiate and secure the approval of commercial loans and other banking facilities and accommodations, such as, but not limited to discount loans,
letters of credit, trust receipts, lines for marginal deposits on foreign and domestic letters of credit, negotiate out-of-town checks, etc. from the Philippine Bank of Communications, 216 Juan
Luna, Manila in such sums as they shall deem advantageous, the principal of all of which shall not exceed the total amount of TEN MILLION PESOS (P10,000,000.00), Philippine Currency, plus
any interests that may be agreed upon with said Bank in such loans and other credit lines of the same kind and such further terms and conditions as may, upon granting of said loans and
other banking facilities, be imposed by the Bank; and to make, execute, sign and deliver any contracts of mortgage, pledge or sale of one, some or all of the properties of the Company, or
any other agreements or documents of whatever nature or kind, including the signing, indorsing, cashing, negotiation and execution of promissory notes, checks, money orders or other
negotiable instruments, which may be necessary and proper in connection with said loans and other banking facilities, or with their amendments, renewals and extensions of payment of the
whole or any part thereof.[4]
On March 26, 1979, MICO availed of the first loan of One Million Pesos (P1,000,000.00) from PBCom. Upon maturity of the loan, MICO caused the same to be renewed, the last renewal of
which was made on May 21, 1982 under Promissory Note BNA No. 26218.[5]
Another loan of One Million Pesos (P1,000,000.00) was availed of by MICO from PBCom which was likewise later on renewed, the last renewal of which was made on May 21, 1982 under
Promissory Note BNA No. 26219.[6] To complete MICOs availment of Three Million Pesos (P3,000,000.00) discounting loan/credit line with PBCom, MICO availed of another loan from PBCom in
the sum of One Million Pesos (P1,000,000.00) on May 24, 1979. As in previous loans, this was rolled over or renewed, the last renewal of which was made on May 25, 1982 under Promissory
Note BNA No. 26253.[7]
As security for the loans, MICO through its Vice-President and General Manager, Mariano Sio, executed on May 16, 1979 a Deed of Real Estate Mortgage over its properties situated in Pasig,
Metro Manila covered by Transfer Certificates of Title (TCT) Nos. 11248 and 11250.
On March 26, 1979 Charles Lee, Chua Siok Suy, Mariano Sio, Alfonso Yap and Richard Velasco, in their personal capacities executed a Surety Agreement[8] 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. It was provided, however, that the liability of the sureties shall not at any one
time exceed the principal amount of Three Million Pesos (P3,000,000.00) plus interest, costs, losses, charges and expenses including attorneys fees incurred by PBCom in connection
therewith.
On July 14, 1980, petitioner Charles Lee, in his capacity as president of MICO, wrote PBCom and applied for an additional loan in the sum of Four Million Pesos (P4,000,000.00). The loan was
intended for the expansion and modernization of the companys machineries. Upon approval of the said application for loan, MICO availed of the additional loan of Four Million Pesos
(P4,000,000.00) as evidenced by Promissory Note TA No. 094.[9]
As per agreement, the proceeds of all the loan availments were credited to MICOs current checking account with PBCom. To induce the PBCom to increase the credit line of MICO, Charles Lee,
Chua Siok Suy, Mariano Sio, Alfonso Yap, Richard Velasco and Alfonso Co (hereinafter referred to as petitioners-sureties), executed another surety agreement[10] in favor of PBCom on July 28,
1980, whereby they 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 all other obligations of any kind and nature for which MICO may be held accountable by PBCom. It was provided, however, that their liability shall not at any one time
exceed the sum of Seven Million Five Hundred Thousand Pesos (P7,500,000.00) including interest, costs, charges, expenses and attorneys fees incurred by MICO in connection therewith.
On July 29, 1980, MICO furnished PBCom with a notarized certification issued by its corporate secretary, Atty. P.B. Barrera, that Chua Siok Suy was duly authorized by the Board of Directors to
negotiate on behalf of MICO for loans and other credit availments from PBCom. Indicated in the certification was the following resolution unanimously approved by the Board of Directors:
RESOLVED, AS IT IS HEREBY RESOLVED, That Mr. Chua Siok Suy be, as he is hereby authorized and empowered, on behalf of MICO METALS CORPORATION from time to time, to borrow money
and obtain other credit facilities, with or without security, from the PHILIPPINE BANK OF COMMUNICATIONS in such amount(s) and under such terms and conditions as he may determine, with
full power and authority to execute, sign and deliver such contracts, instruments and papers in connection therewith, including real estate and chattel mortgages, pledges and assignments
over the properties of the Corporation; and to renew and/or extend and/or roll-over and/or reavail of the credit facilities granted thereunder, either for lesser or for greater amount(s), the
intention being that such credit facilities and all securities of whatever kind given as collaterals therefor shall be a continuing security.
RESOLVED FURTHER, That said bank is hereby authorized, empowered and directed to rely on the authority given hereunder, the same to continue in full force and effect until written notice
of its revocation shall be received by said Bank.[11]
On July 2, 1981, MICO filed with PBCom an application for a domestic letter of credit in the sum of Three Hundred Forty-Eight Thousand Pesos (P348,000.00).[12] The corresponding
irrevocable letter of credit was approved and opened under LC No. L-16060.[13] Thereafter, the domestic letter of credit was negotiated and accepted by MICO as evidenced by the
corresponding bank draft issued for the purpose.[14] After the supplier of the merchandise was paid, a trust receipt upon MICOs own initiative, was executed in favor of PBCom.[15]
On September 14, 1981, MICO applied for another domestic letter of credit with PBCom in the sum of Two Hundred Ninety Thousand Pesos (P290,000.00).[16] The corresponding irrevocable
letter of credit was issued on September 22, 1981 under LC No. L-16334.[17] After the beneficiary of the said letter of credit was paid by PBCom for the price of the merchandise, the goods
were delivered to MICO which executed a corresponding trust receipt[18] in favor of PBCom.
On November 10, 1981, MICO applied for authority to open a foreign letter of credit in favor of Ta Jih Enterprises Co., Ltd.,[19] and thus, the corresponding letter of credit[20] was then issued
by PBCom with a cable sent to the beneficiary, Ta Jih Enterprises Co., Ltd. advising that said beneficiary may draw funds from the account of PBCom in its correspondent banks New York
Office.[21] PBCom also informed its corresponding bank in Taiwan, the Irving Trust Company, of the approved letter of credit. The correspondent bank acknowledged PBComs advice through a
confirmation letter[22] and by debiting from PBComs account with the said correspondent bank the sum of Eleven Thousand Nine Hundred Sixty US Dollars ($11 ,960.00).[23] As in past
transactions, MICO executed in favor of PBCom a corresponding trust receipt.[24]
On January 4, 1982, MICO applied, for authority to open a foreign letter of credit in the sum of One Thousand Nine Hundred US Dollars ($1,900.00), with PBCom.[25] Upon approval, the
corresponding letter of credit denominated as LC No. 62293[26] was issued whereupon PBCom advised its correspondent bank and MICO[27] of the same. Negotiation and proper acceptance
of the letter of credit were then made by MICO. Again, a corresponding trust receipt[28] was executed by MICO in favor of PBCom.
In all the transactions involving foreign letters of credit, PBCom turned over to MICO the necessary documents such as the bills of lading and commercial invoices to enable the latter to
withdraw the goods from the port of Manila.
On May 21, 1982 MICO obtained from PBCom another loan in the sum of Three Hundred Seventy-Seven Thousand Pesos (P377,000.00) covered by Promissory Note BA No. 7458.[29]
Upon maturity of all credit availments obtained by MICO from PBCom, the latter made a demand for payment.[30] For failure of petitioner MICO to pay the obligations incurred despite
repeated demands, private respondent PBCom extrajudicially foreclosed MICOs real estate mortgage and sold the said mortgaged properties in a public auction sale held on November 23,
1982. Private respondent PBCom which emerged as the highest bidder in the auction sale, applied the proceeds of the purchase price at public auction of Three Million Pesos (P3,000,000.00)
to the expenses of the foreclosure, interest and charges and part of the principal of the loans, leaving an unpaid balance of Five Million Four Hundred Forty-One Thousand Six Hundred SixtyThree Pesos and Ninety Centavos (P5,441,663.90) exclusive of penalty and interest charges. Aside from the unpaid balance of Five Million Four Hundred Forty-One Thousand Six Hundred
Sixty-Three Pesos and Ninety Centavos (P5,441,663.90), MICO likewise had another standing obligation in the sum of Four Hundred Sixty-One Thousand Six Hundred Pesos and Six Centavos
(P461,600.06) representing its trust receipts liabilities to private respondent. PBCom then demanded the settlement of the aforesaid obligations from herein petitioners-sureties who,
however, refused to acknowledge their obligations to PBCom under the surety agreements. Hence, PBCom filed a complaint with prayer for writ of preliminary attachment before the Regional
Trial Court of Manila, which was raffled to Branch 55, alleging that MICO was no longer in operation and had no properties to answer for its obligations. PBCom further alleged that petitioner
Charles Lee has disposed or concealed his properties with intent to defraud his creditors. Except for MICO and Charles Lee, the sheriff of the RTC failed to serve the summons on herein
petitioners-sureties since they were all reportedly abroad at the time. An alias summons was later issued but the sheriff was not able to serve the same to petitioners Alfonso Co and Chua
Siok Suy who was already sickly at the time and reportedly in Taiwan where he later died.
Petitioners (MICO and herein petitioners-sureties) denied all the allegations of the complaint filed by respondent PBCom, and alleged that: a) MICO was not granted the alleged loans and
neither did it receive the proceeds of the aforesaid loans; b) Chua Siok Suy was never granted any valid Board Resolution to sign for and in behalf of MICO; c) PBCom acted in bad faith in
granting the alleged loans and in releasing the proceeds thereof; d) petitioners were never advised of the alleged grant of loans and the subsequent releases therefor, if any; e) since no loan
was ever released to or received by MICO, the corresponding real estate mortgage and the surety agreements signed concededly by the petitioners-sureties are null and void.
The trial court gave credence to the testimonies of herein petitioners and dismissed the complaint filed by PBCom. The trial court likewise declared the real estate mortgage and its
foreclosure null and void. In ruling for herein petitioners, the trial court said that PBCom failed to adequately prove that the proceeds of the loans were ever delivered to MICO. The trial court
pointed out, among others, that while PBCom claimed that the proceeds of the Four Million Pesos (P4,000,000.00) loan covered by promissory note TA 094 were deposited to the current
account of petitioner MICO, PBCom failed to produce the ledger account showing such deposit. The trial court added that while PBCom may have loaned to MICO the other sums of Three
Hundred Forty-Eight Thousand Pesos (P348,000.00) and Two Hundred Ninety Thousand Pesos (P290,000.00), no proof has been adduced as to the existence of the goods covered and paid by
the said amounts. Hence, inasmuch as no consideration ever passed from PBCom to MICO, all the documents involved therein, such as the promissory notes, real estate mortgage including
the surety agreements were all void or nonexistent for lack of cause or consideration. The trial court said that the lack of proof as regards the existence of the merchandise covered by the
letters of credit bolstered the claim of herein petitioners that no purchases of the goods were really made and that the letters of credit transactions were simply resorted to by the PBCom and
Chua Siok Suy to accommodate the latter in his financial requirements.
The Court of Appeals reversed the ruling of the trial court, saying that the latter committed an erroneous application and appreciation of the rules governing the burden of proof. Citing
Section 24 of the Negotiable Instruments Law which provides that Every negotiable instrument is deemed prima facie to have been issued for valuable consideration and every person whose
signature appears thereon to have become a party thereto for value, the Court of Appeals said that while the subject promissory notes and letters of credit issued by the PBCom made no
mention of delivery of cash, it is presumed that said negotiable instruments were issued for valuable consideration. The Court of Appeals also cited the case of Gatmaitan vs. Court of
Appeals[31] which holds that "there is a presumption that an instrument sets out the true agreement of the parties thereto and that it was executed for valuable consideration. The appellate
court noted and found that a notarized Certification was issued by MICOs corporate secretary, P.B. Barrera, that Chua Siok Suy, was duly authorized by the Board of Directors of MICO to
borrow money and obtain credit facilities from PBCom.
Petitioners filed a motion for reconsideration of the challenged decision of the Court of Appeals but this was denied in a Resolution dated November 7, 1994 issued by its Former Second
Division. Petitioners-sureties then filed a petition for review on certiorari with this Court, docketed as G.R. No. 117913, assailing the decision of the Court of Appeals. MICO likewise filed a
separate petition for review on certiorari, docketed as G.R. No. 117914, with this Court assailing the same decision rendered by the Court of Appeals. Upon motion filed by petitioners, the two
(2) petitions were consolidated on January 11, 1995.[32]
Petitioners contend that there was no proof that the proceeds of the loans or the goods under the trust receipts were ever delivered to and received by MICO. But the record shows otherwise.
Petitioners-sureties further contend that assuming that there was delivery by PBCom of the proceeds of the loans and the goods, the contracts were executed by an unauthorized person,
more specifically Chua Siok Suy who acted fraudulently and in collusion with PBCom to defraud MICO.
The pertinent issues raised in the consolidated cases at bar are: a) whether or not the proceeds of the loans and letters of credit transactions were ever delivered to MICO, and b) whether or
not the individual petitioners, as sureties, may be held liable under the two (2) Surety Agreements executed on March 26, 1979 and July 28, 1980.
In civil cases, the party having the burden of proof must establish his case by preponderance of evidence.[33] Preponderance of evidence means evidence which is more convincing to the
court as worthy of belief than that which is offered in opposition thereto. Petitioners contend that the alleged promissory notes, trust receipts and surety agreements attached to the
complaint filed by PBCom did not ripen into valid and binding contracts inasmuch as there is no evidence of the delivery of money or loan proceeds to MICO or to any of the petitionerssureties. Petitioners claim that under normal banking practice, borrowers are required to accomplish promissory notes in blank even before the grant of the loans applied for and such
documents become valid written contracts only when the loans are actually released to the borrower.
We are not convinced.
During the trial of an action, the party who has the burden of proof upon an issue may be aided in establishing his claim or defense by the operation of a presumption, or, expressed
differently, by the probative value which the law attaches to a specific state of facts. A presumption may operate against his adversary who has not introduced proof to rebut the
presumption. The effect of a legal presumption upon a burden of proof is to create the necessity of presenting evidence to meet the legal presumption or the prima facie case created
thereby, and which if no proof to the contrary is presented and offered, will prevail. The burden of proof remains where it is, but by the presumption the one who has that burden is relieved
for the time being from introducing evidence in support of his averment, because the presumption stands in the place of evidence unless rebutted.
Under Section 3, Rule 131 of the Rules of Court the following presumptions, among others, are satisfactory if uncontradicted: a) That there was a sufficient consideration for a contract and b)
That a negotiable instrument was given or indorsed for sufficient consideration. As observed by the Court of Appeals, a similar presumption is found in Section 24 of the Negotiable
Instruments Law which provides that every negotiable instrument is deemed prima facie to have been issued for valuable consideration and every person whose signature appears thereon to
have become a party for value. Negotiable instruments which are meant to be substitutes for money, must conform to the following requisites to be considered as such a) it must be in
writing; b) it must be signed by the maker or drawer; c) it must contain an unconditional promise or order to pay a sum certain in money; d) it must be payable on demand or at a fixed or
determinable future time; e) it must be payable to order or bearer; and f) where it is a bill of exchange, the drawee must be named or otherwise indicated with reasonable certainty.
10 | N E G O T I A B L E I N S T R U M E N T S
Negotiable instruments include promissory notes, bills of exchange and checks. Letters of credit and trust receipts are, however, not negotiable instruments. But drafts issued in connection
with letters of credit are negotiable instruments.
Private respondent PBCom presented the following documentary evidence to prove petitioners credit availments and liabilities:
1) Promissory Note No. BNA 26218 dated May 21, 1982 in the sum of P1,000,000.00 executed by MICO in favor of PBCom.
4) Promissory Note No. BNA 7458 dated May 21, 1982 in the sum of P377,000.00 executed by MICO in favor of PBCom.
5) Promissory Note No. TA 094 dated July 29, 1980 in the sum of P4,000.000.00 executed by MICO in favor of PBCom.
6) Irrevocable letter of credit No. L-16060 dated July 2,1981 issued in favor of Perez Battery Center for account of Mico Metals Corp.
7) Draft dated July 2, 1981 in the sum of P348,000.00 issued by Perez Battery Center, beneficiary of irrevocable Letter of Credit No. No. L-16060 and accepted by MICO Metals corporation.
8) Letter dated July 2, 1981 from Perez Battery Center addressed to private respondent PBCom showing that proceeds of the irrevocable letter of credit No. L- 16060 was received by Mr.
Moises Rosete, representative of Perez Battery Center.
9) Trust receipt dated July 2, 1981 executed by MICO in favor of PBCom covering the merchandise purchased under Letter of Credit No. 16060.
10) Irrevocable letter of credit No. L-16334 dated September 22, 1981 issued in favor of Perez Battery Center for account of MICO Metals Corp.
11) Draft dated September 22, 1981 in the sum of P290,000.00 issued by Perez Battery Center and accepted by MICO.
12) Letter dated September 17, 1981 from Perez Battery addressed to PBCom showing that the proceeds of credit no. L-16344 was received by Mr. Moises Rosete, a representative of Perez
Battery Center.
13) Trust Receipt dated September 22, 1981 executed by MICO in favor of PBCom covering the merchandise under Letter of Credit No. L-16334.
14) Irrevocable Letter of Credit no. 61873 dated November 10, 1981 for US$11,960.00 issued by PBCom in favor of TA JIH Enterprises Co. Ltd., through its correspondent bank, Irving Trust
Company of Taipei, Taiwan.
15) Trust Receipt dated December 15, 9181 executed by MICO in favor of PBCom showing that possession of the merchandise covered by Irrevocable Letter of Credit no. 61873 was released
by PBCom to MICO.
16) Letters dated March 2, 1979 from MICO signed by its president, Charles Lee, showing that MICO sought credit line from PBCom in the form of loans, letters of credit and trust receipt in the
sum of P7,500,000.00.
17) Letter dated July 14, 1980 from MICO signed by its president, Charles Lee, showing that MICO requested for additional financial assistance in the sum of P4,000,000.00.
18) Board resolution dated March 6, 1979 of MICO authorizing Charles Lee and Mariano Sio singly or jointly to act and sign for and in behalf of MICO relative to the obtention of credit facilities
from PBCom.
19) Duly notarized Deed of Mortgage dated May 16, 1979 executed by MICO in favor of PBCom over MICO s real properties covered by TCT Nos. 11248 and 11250 located in Pasig.
20) Duly notarized Surety Agreement dated March 26, 1979 executed by herein petitioners Charles Lee, Mariano Sio, Alfonso Yap, Richard Velasco and Chua Siok Suy in favor of PBCom.
21) Duly notarized Surety Agreement dated July 28, 1980 executed by herein petitioners Charles Lee, Mariano Sio, Alfonso Yap, Richard Velasco and Chua Siok Suy in favor of PBCom.
22) Duly notarized certification dated July 28, 1980 issued by MICO s corporate secretary, Mr. P.B. Barrera, attesting to the adoption of a board resolution authorizing Chua Siok Suy to sign, for
and in behalf of MICO, all the necessary documents including contracts, loan instruments and mortgages relative to the obtention of various credit facilities from PBCom.
The above-cited documents presented 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. Petitioner MICO did not proffer a single piece of evidence, apart from its bare denials, to support its allegation that the loan transactions, real estate
mortgage, letters of credit and trust receipts were issued allegedly without any consideration.
Petitioners-sureties, for their part, presented the By-Laws[34] of Mico Metals Corporation (MICO) to prove that only the president of MICO is authorized to borrow money, arrange letters of
credit, execute trust receipts, and promissory notes and consequently, that the loan transactions, letters of credit, promissory notes and trust receipts, most of which were executed by Chua
Siok Suy in representation of MICO were not allegedly authorized and hence, are not binding upon MICO. 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.[36] 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.
Petitioners-sureties also presented a letter of their counsel dated October 9, 1982, addressed to private respondent PBCom purportedly to show that PBCom knew that Chua Siok Suy
allegedly used the credit and good names of the petitioner-sureties for his benefit, and that petitioner-sureties were made to sign blank documents and were furnished copies of the same.
The letter, however, is in fact merely a reply of petitioners-sureties counsel to PBComs demand for payment of MICOs obligations, and appears to be an inconsequential piece of self-serving
evidence.
In addition to the foregoing, MICO and petitioners-sureties cited the decision of the trial court which stated that there was no proof that the proceeds of the loans were ever delivered to MICO.
Although the private respondents witness, Mr. Gardiola, testified that the proceeds of the loans were deposited in MICOs current account with PBCom, his testimony was allegedly not
supported by any bank record, note or memorandum. A careful scrutiny of the record including the transcript of stenographic notes reveals, however, that although private respondent
PBCom was willing to produce the corresponding account ledger showing that the proceeds of the loans were credited to MICOs current account with PBCom, MICO in fact vigorously objected
to the presentation of said document. That point is shown in the testimony of PBComs witness, Gardiola, thus:
Q: Now, all of these promissory note Exhibits I and J which as you have said previously (sic) availed originally by defendant Mico Metals Corp. sometime in 1979, my question now is, do you
know what happened to the proceeds of the original availment?
A: Well, it was credited to the current account of Mico Metals Corp.
Q: Why did it was credited to the proceeds to the account of Mico Metals Corp? (sic)
A: Well, that is our understanding.
ATTY. DURAN:
Your honor, may we be given a chance to object, the best evidence is the so-called current account...
COURT:
Can you produce the ledger account?
A: Yes, Your Honor, I will bring.
COURT:
The ledger or record of the current account of Mico Metals Corp.
A: Yes, Your Honor.
ATTY. ACEJAS:
Your Honor, these are a confidential record, and they might not be disclosed without the consent of the person concerned. (sic)
ATTY. SANTOS:
Well, you are the one who is asking that.
ATTY. DURAN:
Your Honor, Im precisely want to show for the ... (sic)
COURT:
But the amount covered by the current account of defendant Mico Metals Corp. is the subject matter of this case.
xxx xxx xxx
Q: Are those availments were release? (sic)
A: Yes, Your Honor, to the defendant corporation.
Q: By what means?
A: By the credit to their current account.
ATTY. ACEJAS:
We object to that, your Honor, because the disclose is the secrecy of the bank deposit. (sic)
xxx xxx xxx
Q: Before the recess Mr. Gardiola, you stated that the proceeds of the three (3) promissory notes were credited to the accounts of Mico Metals Corporation, now do you know what kind of
current account was that which you are referring to?
ATTY. ACEJAS:
Objection your Honor, that is the disclose of the deposit of defendant Mico Metals Corporation and it cannot disclosed without the authority of the depositor. (sic)[37]
That proceeds of the loans which were originally availed of in 1979 were delivered to MICO is bolstered by the fact that more than a year later, specifically on July 14, 1980, MICO through its
president, petitioner-surety Charles Lee, requested for an additional loan of Four Million Pesos (P4,000,000.00) from PBCom. The fact that MICO was requesting for an additional loan implied
that it has already availed of earlier loans from PBCom.
Petitioners allege that PBCom presented no evidence that it remitted payments to cover the domestic and foreign letters of credit. Petitioners placed much reliance on the erroneous decision
of the trial court which stated that private respondent PBCom allegedly failed to prove that it actually made payments under the letters of credit since the bank drafts presented as evidence
show that they were made in favor of the Bank of Taiwan and First Commercial Bank.
Petitioners allegations are untenable.
Modern letters of credit are usually not made between natural persons. They involve bank to bank transactions. Historically, the letter of credit was developed to facilitate the sale of goods
between, distant and unfamiliar buyers and sellers. It was an arrangement under which a bank, whose credit was acceptable to the seller, would at the instance of the buyer agree to pay
drafts drawn on it by the seller, provided that certain documents are presented such as bills of lading accompanied the corresponding drafts. Expansion in the use of letters of credit was a
natural development in commercial banking.[38] Parties to a commercial letter of credit include (a) the buyer or the importer, (b) the seller, also referred to as beneficiary, (c) the opening
bank which is usually the buyers bank which actually issues the letter of credit, (d) the notifying bank which is the correspondent bank of the opening bank through which it advises the
beneficiary of the letter of credit, (e) negotiating bank which is usually any bank in the city of the beneficiary. The services of the notifying bank must always be utilized if the letter of credit is
to be advised to the beneficiary through cable, (f) the paying bank which buys or discounts the drafts contemplated by the letter of credit, if such draft is to be drawn on the opening bank or
on another designated bank not in the city of the beneficiary. As a rule, whenever the facilities of the opening bank are used, the beneficiary is supposed to present his drafts to the notifying
bank for negotiation and (g) the confirming bank which, upon the request of the beneficiary, confirms the letter of credit issued by the opening bank.
From the foregoing, it is clear that letters of credit, being usually bank to bank transactions, involve more than just one bank. Consequently, there is nothing unusual in the fact that the drafts
presented in evidence by respondent bank were not made payable to PBCom. As explained by respondent bank, a draft was drawn on the Bank of Taiwan by Ta Jih Enterprises Co., Ltd. of
Taiwan, supplier of the goods covered by the foreign letter of credit. Having paid the supplier, the Bank of Taiwan then presented the bank draft for reimbursement by PBComs correspondent
bank in Taiwan, the Irving Trust Company which explains the reason why on its face, the draft was made payable to the Bank of Taiwan. Irving Trust Company accepted and endorsed the draft
to PBCom. The draft was later transmitted to PBCom to support the latters claim for payment from MICO. MICO accepted the draft upon presentment and negotiated it to PBCom.
Petitioners further aver that MICO never requested that legal possession of the merchandise be transferred to PBCom by way of trust receipts. Petitioners insist that assuming that MICO
transferred possession of the merchandise to PBCom by way of trust receipts, the same would be illegal since PBCom, being a banking institution, is not authorized by law to engage in the
business of importing and selling goods.
A trust receipt is considered as a security transaction intended to aid in financing importers and retail dealers who do not have sufficient funds or resources to finance the importation or
purchase of merchandise, and who may not be able to acquire credit except through utilization, as collateral of the merchandise imported or purchased.[39] A trust receipt, therefor, is a
document of security pursuant to which a bank acquires a security interest in the goods under trust receipt. Under a letter of credit-trust receipt arrangement, a bank extends a loan covered
by a letter of credit, with the trust receipt as a security for the loan. The transaction involves a loan feature represented by a letter of credit, and a security feature which is in the covering
trust receipt which secures an indebtedness.
Petitioners averments with regard to the second issue are no less incredulous. Petitioners contend 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.
It has not escaped our notice that it was petitioner-surety Charles Lee, as president of MICO Metals Corporation, who first requested for a discounting loan of Three Million Pesos
(P3,000,000.00) from PBCom as evidenced by his letter dated March 2, 1979.[40] On the same day, Charles Lee, as President of MICO, requested for a Letter of Credit and Trust Receipt line in
the sum of Three Million Pesos (P3,000,000.00).[41] Still, on the same day, Charles Lee again as President of MICO, wrote another letter to PBCOM requesting for a financing line in the sum of
One Million Five Hundred Thousand Pesos (P1,500,000.00) to be used exclusively as marginal deposit for the opening of MICOs foreign and local letters of credit with PBCom.[42] More than a
year later, it was also Charles Lee, again in his capacity as president of MICO, who asked for an additional loan in the sum of Four Million Pesos (P4,000,000.00). The claim therefore of
petitioners that it was Chua Siok Suy, in connivance with the respondent PBCom, who applied for and obtained the loan transactions and letters of credit strains credulity considering that
even the Deed of the Real Estate Mortgage in favor of PBCom was executed by petitioner-surety Mariano Sio in his capacity as general manager of MICO[43] to secure the loan
accommodations obtained by MICO from PBCom.
Petitioners-sureties allege that they were made to sign the surety agreements in blank by Chua Siok Suy. Petitioner Alfonso Yap, the corporate treasurer, for his part testified that he signed
booklets of checks, surety agreements and promissory notes in blank; that he signed the documents in blank despite his misgivings since Chua Siok Suy assured him that the transaction can
easily be taken cared of since Chua Siok Suy personally knew the Chairman of the Board of PBCom; that he was not receiving salary as treasurer of Mico Metals and since Chua Siok Suy had a
direct hand in the management of Malayan Sales Corporation, of which Yap is an employee, he (Yap) signed the documents in blank as consideration for his continued employment in Malayan
Sales Corporation. Petitioner Antonio Co testified that he worked as office manager for MICO from 1978-1982. As office manager, he was the one in charge of transacting business like
purchasing, selling and paying the salary of the employees. He was also in charge of the handling of documents pertaining to surety agreements, trust receipts and promissory notes;[44]
that when he first joined MICO Metals Corporation, he was able to read the by-laws of the corporation and he came to know that only the chairman and the president can borrow money in
behalf of the corporation; that Chua Siok Suy once called him up and told him to secure an invoice so that a credit line can be opened in the bank with a local letter of credit; that when the
invoice was secured, he (Co) brought it together with the application for a credit line to Chua Siok Suy, and that he questioned the authority of Chua Siok Suy pointing out that he (Co) is not
empowered to sign the document inasmuch as only the latter, as president, was authorized to do so. However, Chua Siok Suy allegedly just said that he had already talked with the Chairman
of the Board of PBCom; and that Chua Siok Suy reportedly said that he needed the money to finance a project that he had with the Taipei government. Co also testified that he knew of the
application for domestic letter of credit in the sum of Three Hundred Forty-Eight Thousand Pesos (P348,000.00); and that a certain Moises Rosete was authorized to claim the check covering
the Three Hundred Forty-Eight Thousand Pesos (P348,000.00) from PBCom; and that after claiming the check Rosete brought it to Perez Battery Center for indorsement after which the same
was deposited to the personal account of Chua Siok Suy.[45]
We consider as incredible and unacceptable the claim of petitioners-sureties that the Board of Directors of MICO was so careless about the business affairs of MICO as well as about their own
personal reputation and money that they simply relied on the say so of Chua Siok Suy on matters involving millions of pesos. Under Section 3 (d), Rule 131 of the Rules of Court, it is
presumed that a person takes ordinary care of his concerns. Hence, the natural presumption is that one does not sign a document without first informing himself of its contents and
consequences. Said presumption acquires greater force in the case at bar where not only one but several documents were executed at different times and at different places by the petitioner
sureties and Chua Siok Suy as president of MICO.
MICO and herein petitioners-sureties insist that Chua Siok Suy was not duly authorized to negotiate for loans in behalf of MICO from PBCom. Petitioners allegation, however, is belied by the
July 28, 1980 Certification issued by the corporate secretary of PBCom, Atty. P.B. Barrera, that MICO's Board of Directors gave Chua Siok Suy full authority to negotiate for loans in behalf of
MICO with PBCom. In fact, the Certification even provided that Chua Siok Suys authority continues until and unless PBCom is notified in writing of the withdrawal thereof by the said Board.
Notably, petitioners failed to contest the genuineness of the said Certification which is notarized and to show any written proof of any alleged withdrawal of the said authority given by the
Board of Directors to Chua Siok Suy to negotiate for loans in behalf of MICO.
There was no need for PBCom to personally inform the petitioners-sureties individually about the terms of the loans, letters of credit and other loan documents. The petitioners-sureties
themselves happen to comprise the Board of Directors of MICO, which gave full authority to Chua Siok Suy to negotiate for loans in behalf of MICO. Notice to MICOs authorized representative,
Chua Siok Suy, was notice to MICO. The Certification issued by PBComs corporate secretary, Atty. P.B. Barrera, indicated that Chua Siok Suy had full authority to negotiate and sign the
necessary documents, in behalf of MICO for loans from PBCom. Respondent PBCom therefore had the right to rely on the said notarized Certification of MICOs Corporate Secretary.
Anent petitioners-sureties contention that they obtained no consideration whatsoever on the surety agreements, we need only point out that the consideration for the sureties is the very
consideration for the principal obligor, MICO, in the contracts of loan. In the case of Willex Plastic Industries Corporation vs. Court of Appeals,[46] we ruled that the consideration necessary to
support a surety obligation need not pass directly to the surety, a consideration moving to the principal alone being sufficient. For a guarantor or surety is bound by the same consideration
that makes the contract effective between the parties thereto. It is not necessary that a guarantor or surety should receive any part or benefit, if such there be, accruing to his principal.
Petitioners placed too much reliance on the rule in evidence that the burden of proof does not shift whereas the burden of going forward with the evidence does pass from party to party. It is
true that said rule is not changed by the fact that the party having the burden of proof has introduced evidence which established prima facie his assertion because such evidence does not
shift the burden of proof; it merely puts the adversary to the necessity of producing evidence to meet the prima facie case. Where the defendant merely denies, either generally or otherwise,
the allegations of the plaintiffs pleadings, the burden of proof continues to rest on the plaintiff throughout the trial and does not shift to the defendant until the plaintiffs evidence has been
presented and duly offered. The defendant has then no burden except to produce evidence sufficient to create a state of equipoise between his proof and that of the plaintiff to defeat the
latter, whereas the plaintiff has the burden, as in the beginning, of establishing his case by a preponderance of evidence.[47] But where the defendant has failed to present and marshall
evidence sufficient to create a state of equipoise between his proof and that of plaintiff, the prima facie case presented by the plaintiff will prevail.
In the case at bar, respondent PBCom, as plaintiff in the trial court, has in fact presented sufficient documentary and testimonial evidence that proved by preponderance of evidence its
subject collection case against the defendants who are the petitioners herein. In view of all the foregoing, the Court of Appeals committed no reversible error in its appealed Decision.
WHEREFORE, the assailed Decision of the Court of Appeals in CA-G.R. CV No. 27480 entitled, Philippine Bank of Communications vs. Mico Metals Corporation, Charles Lee, Chua Siok Suy,
Mariano Sio, Alfonso Yap, Richard Velasco and Alfonso Co, is AFFIRMED in toto.
Costs against the petitioners. SO ORDERED.
ENGR. JOSE E. CAYANAN,
Petitioner,
- versus NORTH STAR INTERNATIONAL TRAVEL, INC.,
Respondent.
G.R. No. 172954
Promulgated: October 5, 2011
DECISION
VILLARAMA, JR., J.:
Petitioner Engr. Jose E. Cayanan appeals the May 31, 2006 Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. 65538 finding him civilly liable for the value of the five checks which are
the subject of Criminal Case Nos. 166549-53.
The antecedent facts are as follows:
North Star International Travel Incorporated (North Star) is a corporation engaged in the travel agency business while petitioner is the owner/general manager of JEAC International
Management and Contractor Services, a recruitment agency.
On March 17,[2] 1994, Virginia Balagtas, the General Manager of North Star, in accommodation and upon the instruction of its client, petitioner herein, sent the amount of US$60,000[3] to
View Sea Ventures Ltd., in Nigeria from her personal account in Citibank Makati. On March 29, 1994, Virginia again sent US$40,000 to View Sea Ventures by telegraphic transfer,[4] with
US$15,000 coming from petitioner. Likewise, on various dates, North Star extended credit to petitioner for the airplane tickets of his clients, with the total amount of such indebtedness under
the credit extensions eventually reaching P510,035.47.[5]
To cover payment of the foregoing obligations, petitioner issued the following five checks to North Star:
Check No : 246822
Drawn Against : Republic Planters Bank
Amount : P695,000.00
Dated/Postdated : May 15, 1994

Payable to : North Star International Travel, Inc.
Check No : 246823
Amount : P278,000.00
Check No : 246824
Amount : P22,703.00
Check No : 687803
Drawn Against : PCIB
Amount : P1,500,000.00
Dated/Postdated : April 14, 1994
Check No : 687804
Drawn Against : PCIB
Amount : P35,000.00
Dated/Postdated : April 14, 1994
Payable to : North Star International Travel, Inc.[6]
When presented for payment, the checks in the amount of P1,500,000 and P35,000 were dishonored for insufficiency of funds while the other three checks were dishonored because of a stop
payment order from petitioner.[7] North Star, through its counsel, wrote petitioner on September 14, 1994[8] informing him that the checks he issued had been dishonored. North Star
demanded payment, but petitioner failed to settle his obligations. Hence, North Star instituted Criminal Case Nos. 166549-53 charging petitioner with violation of Batas Pambansa Blg. 22, or
the Bouncing Checks Law, before the Metropolitan Trial Court (MeTC) of Makati City.
The Informations,[9] which were similarly worded except as to the check numbers, the dates and amounts of the checks, alleged:
That on or about and during the month of March 1994 in the Municipality of Makati, Metro Manila, Philippines, a place within the jurisdiction of this Honorable Court, the above-named
accused, being the authorized signatory of [JEAC] Intl Mgt & Cont. Serv. did then and there willfully, unlawfully and feloniously make out[,] draw and issue to North Star Intl. Travel Inc. herein
rep. by Virginia D. Balagtas to apply on account or for value the checks described below:
xxxx
said accused well knowing that at the time of issue thereof, did not have sufficient funds in or credit with the drawee bank for the payment in full of the face amount of such check upon its
presentment, which check when presented for payment within ninety (90) days from the date thereof was subsequently dishonored by the drawee bank for the reason PAYMENT
STOPPED/DAIF and despite receipt of notice of such dishonor the accused failed to pay the payee the face amount of said check or to make arrangement for full payment thereof within five
(5) banking days after receiving notice.
Contrary to law.
Upon arraignment, petitioner pleaded not guilty to the charges.
After trial, the MeTC found petitioner guilty beyond reasonable doubt of violation of B.P. 22. Thus:
WHEREFORE, finding the accused, ENGR. JOSE E. CAYANAN GUILTY beyond reasonable doubt of Violation of Batas Pambansa Blg. 22 he is hereby sentenced to suffer imprisonment of one (1)
year for each of the offense committed.
Accused is likewise ordered to indemnify the complainant North Star International Travel, Inc. represented in this case by Virginia Balagtas, the sum of TWO MILLION FIVE HUNDRED THIRTY
THOUSAND AND SEVEN HUNDRED THREE PESOS (P2,530,703.00) representing the total value of the checks in [question] plus FOUR HUNDRED EIGHTY[-]FOUR THOUSAND SEVENTY[-]EIGHT
PESOS AND FORTY[-]TWO CENTAVOS (P484,078.42) as interest of the value of the checks subject matter of the instant case, deducting therefrom the amount of TWO HUNDRED TWENTY
THOUSAND PESOS (P220,000.00) paid by the accused as interest on the value of the checks duly receipted by the complainant and marked as Exhibit FF of the record.
xxxx
SO ORDERED.[10]
On appeal, the Regional Trial Court (RTC) acquitted petitioner of the criminal charges. The RTC also held that there is no basis for the imposition of the civil liability on petitioner. The RTC
ratiocinated that:
In the instant cases, the checks issued by the accused were presented beyond the period of NINETY (90) DAYS and therefore, there is no violation of the provision of Batas Pambansa Blg. 22
and the accused is not considered to have committed the offense. There being no offense committed, accused is not criminally liable and there would be no basis for the imposition of the
civil liability arising from the offense.[11]
Aggrieved, North Star elevated the case to the CA. On May 31, 2006, the CA reversed the decision of the RTC insofar as the civil aspect is concerned and held petitioner civilly liable for the
value of the subject checks. The fallo of the CA decision reads:
WHEREFORE, the petition is GRANTED. The assailed Decision of the RTC insofar as Cayanan's civil liability is concerned, is NULLIFIED and SET ASIDE. The indemnity awarded by the MeTC in
its September 1, 1999 Decision is REINSTATED.
SO ORDERED.[12]
The CA ruled that although Cayanan was acquitted of the criminal charges, he may still be held civilly liable for the checks he issued since he never denied having issued the five postdated
checks which were dishonored.
Petitioner now assails the CA decision raising the lone issue of whether the CA erred in holding him civilly liable to North Star for the value of the checks.[13]
Petitioner argues 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 US$85,000 sent to View Sea Ventures was not sent for the account of North Star but for the account of Virginia as her investment. He points out that said amount was taken from Virginias
personal dollar account in Citibank and not from North Stars corporate account.
Respondent North Star, for its part, counters that petitioner is liable for the value of the five subject checks as they were issued for value. Respondent insists that petitioner owes North Star
P2,530,703 plus interest of P264,078.45, and that the P220,000 petitioner paid to North Star is conclusive proof that the checks were issued for value.
The petition is bereft of merit.
We have held that upon issuance of a check, in the absence of evidence to the contrary, it is presumed that the same was issued for valuable consideration which may consist either in some
right, interest, profit or benefit accruing to the party who makes the contract, or some forbearance, detriment, loss or some responsibility, to act, or labor, or service given, suffered or
undertaken by the other side.[14] Under the Negotiable Instruments Law, it is presumed that every party to an instrument acquires the same for a consideration or for value.[15] As petitioner
alleged that there was no consideration for the issuance of the subject checks, it devolved upon him to present convincing evidence to overthrow the presumption and prove that the checks
were in fact issued without valuable consideration.[16] Sadly, however, petitioner has not presented any credible evidence to rebut the presumption, as well as North Stars assertion, that the
checks were issued as payment for the US$85,000 petitioner owed.
Notably, petitioner anchors his defense of lack of consideration on the fact that he did not personally receive the US$85,000 from Virginia. However, we note that in his pleadings, he never
denied having instructed Virginia to remit the US$85,000 to View Sea Ventures. Evidently, Virginia sent the money upon the agreement that petitioner will give to North Star the peso
equivalent of the amount remitted plus interest. As testified to by Virginia, Check No. 246822 dated May 15, 1994 in the amount of P695,000.00 is equivalent to US$25,000; Check No.
246823 dated May 15, 1994 in the amount of P278,000 is equivalent to US$10,000; Check No. 246824 in the amount of P22,703 represents the one month interest for P695,000 and
P278,000 at the rate of twenty-eight (28%) percent per annum;[17] Check No. 687803 dated April 14, 1994 in the amount of P1,500,000 is equivalent to US$50,000 and Check No. 687804
dated 14 April 1994 in the amount of P35,000 represents the one month interest for P1,500,000 at the rate of twenty-eight (28%) percent per annum.[18] Petitioner has not substantially
refuted these averments.
Concomitantly, petitioners assertion that the dollars sent to Nigeria was for the account of Virginia Balagtas and as her own investment with View Sea Ventures deserves no credence. Virginia
has not been shown to have any business transactions with View Sea Ventures and from all indications, she only remitted the money upon the request and in accordance with petitioners
instructions. The evidence shows that it was petitioner who had a contract with View Sea Ventures as he was sending contract workers to Nigeria; Virginia Balagtass participation was merely
to send the money through telegraphic transfer in exchange for the checks issued by petitioner to North Star. Indeed, the transaction between petitioner and North Star is actually in the
nature of a loan and the checks were issued as payment of the principal and the interest.
As aptly found by the trial court:
It is to be noted that the checks subject matter of the instant case were issued in the name of North Star International Inc., represented by private complainant Virginia Balagtas in
replacement of the amount of dollars remitted by the latter to Vie[w] Sea Ventures in Nigeria. x x x But Virginia Balagtas has no business transaction with Vie[w] Sea Ventures where accused
has been sending his contract workers and the North Star provided the trip tickets for said workers sent by the accused. North Star International has no participation at all in the transaction
between accused and the Vie[w] Sea Ventures except in providing plane ticket used by the contract workers of the accused upon its understanding with the latter. The contention of the
accused that the dollars were sent by Virginia Balagtas to Nigeria as business investment has not been shown by any proof to set aside the foregoing negative presumptions, thus negates
accused contentions regarding the absence of consideration for the issuance of checks. x x x[19]
Petitioner claims that North Star did not give any valuable consideration for the checks since the US$85,000 was taken from the personal dollar account of Virginia and not the corporate
funds of North Star. The contention, however, deserves scant consideration. The subject checks, bearing petitioners signature, speak for themselves. 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, who as manager merely facilitated the transfer of funds.
Indeed, it is highly inconceivable that an experienced businessman like petitioner would issue various checks in sizeable amounts to a payee if these are without consideration. Moreover, we
note that Virginia Balagtas averred in her Affidavit[20] that North Star caused the payment of the US$60,000 and US$25,000 to View Sea Ventures to accommodate petitioner, which
statement petitioner failed to refute. In addition, petitioner did not question the Statement of Account No. 8639[21] dated August 31, 1994 issued by North Star which contained itemized
amounts including the US$60,000 and US$25,000 sent through telegraphic transfer to View Sea Ventures per his instruction. Thus, the inevitable conclusion is that when petitioner issued the
subject checks to North Star as payee, he did so to settle his obligation with North Star for the US$85,000. And since the only payment petitioner made to North Star was in the amount of
P220,000.00, which was applied to interest due, his liability is not extinguished. 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.
WHEREFORE, the present appeal by way of a petition for review on certiorari is DENIED for lack of merit. The Decision dated May 31, 2006 of the Court of Appeals in CA-G.R. SP No. 65538 is
AFFIRMED.
With costs against petitioner. SO ORDERED.
DIGEST:
Check; issuance for consideration. Upon issuance of a check, in the absence of evidence to the contrary, it is presumed that the same was issued for valuable consideration which may
consist either in some right, interest, profit or benefit accruing to the partywho makes the contract, or some forbearance, detriment, loss or some responsibility, to act, or labor, or service
given, suffered or undertaken by the other side. Under the Negotiable Instruments Law, it is presumed that every party to an instrument acquires the same for a consideration or for value. As
petitioner alleged that there was no consideration for the issuance of the subject checks, it devolved upon him to present convincing evidence to overthrow the presumption and prove that
the checks were in fact issued without valuable consideration. Sadly, however, petitioner has not presented any credible evidence to rebut the presumption, as well as North Stars assertion,
that the checks were issued as payment for the US$85,000 petitioner owed.

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[G.R. No. 139006.

November 27, 2000]

Miranda has a revolving credit line with the

The company was entitled to the benefit conferred by the statutory

Dated/Postdated : May 15, 1994

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