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FIRST DIVISION [G.R. NO. 172954. O CTOBER 5, 2011.] ENGR. JOSE E. CAYANAN, PETITIONER , VS. NORTH STAR INTERNATIONAL TRAVEL, INC., RESPONDENT.

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

DECISION Dated/Postdated : May 15, 1994 VILLARAMA, JR., J p: 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 Payable to : North Star International Travel, Inc. Check No. : 246823 cHDEaC Drawn Against : Republic Planters Bank Amount : P278,000.00 Dated/Postdated : May 15, 1994 Payable to : North Star International Travel, Inc. Check No. : 246824 Drawn Against : Republic Planters Bank Amount : P22,703.00 Dated/Postdated : May 15, 1994 Payable to : North Star International Travel, Inc. Check No. : 687803 Drawn Against : PCIB

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Amount : P1,500,000.00 Dated/Postdated : April 14, 1994

to apply on account or for value the checks described below: xxx xxx xxx

Payable to : North Star International Travel, Inc. 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] Int'l. Mgt. & Cont. Serv. did then and there willfully, unlawfully and feloniously make out[,] draw and issue to North Star Int'l. Travel, Inc. herein rep. by Virginia D. Balagtas 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. TaCSAD 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

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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. xxx xxx xxx 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. ECTSDa 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 Virginia's personal dollar account in Citibank and not from North Star's 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

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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 Star's 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, petitioner's 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 petitioner's 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 Balagtas's 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. CScTED 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. . . . 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. . . . 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 petitioner's 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

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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.

2. March 15 in some parts of the records but the date appearing on the telegraphic transfer receipt/money transfer slip is March 17. 3. Exh. "8", records, p. 262. 4. Exh. "9", id. at 263. 5. Id. at 35. 6. Id. at 36, 53-54. 7. Id. at 56. 8. Exh. "R", id. at 291. 9. Id. at 1-10. 10. Rollo, pp. 57-58. 11. Id. at 61. 12. Id. at 44. 13. Id. at 26.

SO ORDERED. Corona, C.J., Leonardo-de Castro, Bersamin and Del Castillo, JJ., concur. Footnotes 1. Rollo, pp. 35-45. Penned by Associate Justice Roberto A. Barrios with Associate Justices Mario L. Guaria III and Santiago Javier Ranada concurring. Sec. 24. Presumption of consideration. Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration; and every person whose signature appears thereon to have become a party thereto for value. 14. Palana v. People, G.R. No. 149995, September 23, 2007, 534 SCRA 296, 305. 15. Section 24, Negotiable Instruments Law.

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16. See Bayani v. People, G.R. No. 155619, August 14, 2007, 530 SCRA 84, 95. 17. TSN, July 31, 1996, p. 4; records, p. 429. 18. See Exh. "DD", records, p. 307; see also TSN, July 27, 1998, p. 4; records, p. 544; TSN, August 17, 1998, p. 8; records, p. 563. 19. Rollo, pp. 54-55. 20. Records, pp. 62-65. 21. Id. at 88. SECOND DIVISION [G.R. NO. 183852. O CTOBER 20, 2010.] CARMELA BROBIO MANGAHAS, PETITIONER, VS. EUFROCINA A. BROBIO, RESPONDENT.

On January 10, 2002, Pacifico S. Brobio (Pacifico) died intestate, leaving three parcels of land. He was survived by his wife, respondent Eufrocina A. Brobio, and four legitimate and three illegitimate children; petitioner Carmela Brobio Mangahas is one of the illegitimate children. On May 12, 2002, the heirs of the deceased executed a Deed of Extrajudicial Settlement of Estate of the Late Pacifico Brobio with Waiver. In the Deed, petitioner and Pacifico's other children, in consideration of their love and affection for respondent and the sum of P150,000.00, waived and ceded their respective shares over the three parcels of land in favor of respondent. According to petitioner, respondent promised to give her an additional amount for her share in her father's estate. Thus, after the signing of the Deed, petitioner demanded from respondent the promised additional amount, but respondent refused to pay, claiming that she had no more money. 3 A year later, while processing her tax obligations with the Bureau of Internal Revenue (BIR), respondent was required to submit an original copy of the Deed. Left with no more original copy of the Deed, respondent summoned petitioner to her office on May 31, 2003 and asked her to countersign a copy of the Deed. Petitioner refused to countersign the document, demanding that respondent first give her the additional amount that she promised. Considering the value of the three parcels of land (which she claimed to be worth P20M), petitioner asked for P1M, but respondent begged her to lower the amount. Petitioner agreed to lower it to P600,000.00. Because respondent did not have the money at that time and petitioner refused to countersign the Deed without any assurance that the amount would be paid, respondent executed a promissory note. Petitioner agreed to sign the Deed when respondent signed the promissory note which read 31 May 2003 This is to promise that I will give a Financial Assistance to CARMELA B. MANGAHAS the

RESOLUTION

NACHURA, J p: This petition for review on certiorari seeks to set aside the Court of Appeals (CA) Decision 1 dated February 21, 2008, which dismissed petitioner's action to enforce payment of a promissory note issued by respondent, and Resolution 2 dated July 9, 2008, which denied petitioner's motion for reconsideration. The case arose from the following facts: cCHETI

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amount of P600,000.00 Six Hundred Thousand only on June 15, 2003. (SGD) EUFROCINA A. BROBIO 4 When the promissory note fell due, respondent failed and refused to pay despite demand. Petitioner made several more demands upon respondent but the latter kept on insisting that she had no money. On January 28, 2004, petitioner filed a Complaint for Specific Performance with Damages 5 against respondent, alleging in part 2. That plaintiff and defendant are legal heirs of the deceased, Pacifico S. Brobio[,] who died intestate and leaving without a will, on January 10, 2002, but leaving several real and personal properties (bank deposits), and some of which were the subject of the extra-judicial settlement among them, compulsory heirs of the deceased, Pacifico Brobio. . . . . 3. That in consideration of the said waiver of the plaintiff over the listed properties in the extrajudicial settlement, plaintiff received the sum of P150,000.00, and the defendant executed a "Promissory Note" on June 15, 2003, further committing herself to give plaintiff a financial assistance in the amount of P600,000.00. . . . . 4. That on its due date, June 15, 2003, defendant failed to make good of her promise of delivering to the plaintiff the sum of P600,000.00 pursuant to her "Promissory Note" dated May 31, 2003, and despite

repeated demands, defendant had maliciously and capriciously refused to deliver to the plaintiff the amount [of] P600,000.00, and the last of which demands was on October 29, 2003. . . . . 6 CacTIE In her Answer with Compulsory Counterclaim, 7 respondent admitted that she signed the promissory note but claimed that she was forced to do so. She also claimed that the undertaking was not supported by any consideration. More specifically, she contended that 10. Defendant was practically held "hostage" by the demand of the plaintiff. At that time, defendant was so much pressured and was in [a] hurry to submit the documents to the Bureau of Internal Revenue because of the deadline set and for fear of possible penalty if not complied with. Defendant pleaded understanding but plaintiff was adamant. Her hand could only move in exchange for 1 million pesos. 11. Defendant, out of pressure and confused disposition, was constrained to make a promissory note in a reduced amount in favor of the plaintiff. The circumstances in the execution of the promissory note were obviously attended by involuntariness and the same was issued without consideration at all or for illegal consideration. 8 On May 15, 2006, the Regional Trial Court (RTC) rendered a decision in favor of petitioner. The RTC found that the alleged "pressure and confused disposition" experienced by respondent and the circumstances that led to the execution of the promissory note do not constitute undue influence as would vitiate respondent's consent thereto. On the contrary, the RTC observed that It is clear from all the foregoing that it is the defendant who took improper advantage of the

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plaintiff's trust and confidence in her by resorting to a worthless written promise, which she was intent on reneging. On the other hand, plaintiff did not perform an unlawful conduct when she insisted on a written commitment from the defendant, as embodied in the promissory note in question, before affixing her signature that was asked of her by the defendant because, as already mentioned, that was the only opportunity available to her or which suddenly and unexpectedly presented itself to her in order to press her demand upon the defendant to satisfy the correct amount of consideration due to her. In other words, as the defendant had repeatedly rebuffed her plea for additional consideration by claiming lack of money, it is only natural for the plaintiff to seize the unexpected opportunity that suddenly presented itself in order to compel the defendant to give to her [what is] due [her]. And by executing the promissory note which the defendant had no intention of honoring, as testified to by her, the defendant clearly acted in bad faith and took advantage of the trust and confidence that plaintiff had reposed in her. 9 The RTC also brushed aside respondent's claim that the promissory note was not supported by valuable consideration. The court maintained that the promissory note was an additional consideration for the waiver of petitioner's share in the three properties in favor of respondent. Its conclusion was bolstered by the fact that the promissory note was executed after negotiation and haggling between the parties. The dispositive portion of the RTC decision reads: WHEREFORE, judgment is hereby rendered as follows: 1. Ordering the defendant to pay to plaintiff the sum of Six Hundred Thousand Pesos (P600,000.00) which she

committed to pay to plaintiff under the promissory note in question, plus interest thereon at the rate of 12% per annum computed from the date of the filing of the complaint; 2. Ordering the defendant to pay to plaintiff the sum of P50,000.00 as attorney's fees; and 3. Ordering the defendant to pay to plaintiff the costs of this suit. SO ORDERED. 10 On February 21, 2008, the CA reversed the RTC decision and dismissed the complaint. 11 The CA found that there was a complete absence of consideration in the execution of the promissory note, which made it inexistent and without any legal force and effect. The court noted that "financial assistance" was not the real reason why respondent executed the promissory note, but only to secure petitioner's signature. The CA held that the waiver of petitioner's share in the three properties, as expressed in the deed of extrajudicial settlement, may not be considered as the consideration of the promissory note, considering that petitioner signed the Deed way back in 2002 and she had already received the consideration of P150,000.00 for signing the same. The CA went on to hold that if petitioner disagreed with the amount she received, then she should have filed an action for partition. Further, the CA found that intimidation attended the signing of the promissory note. Respondent needed the Deed countersigned by petitioner in order to comply with a BIR requirement; and, with petitioner's refusal to sign the said document, respondent was forced to sign the promissory note to assure petitioner that the money promised to her would be paid. acIHDA

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Petitioner moved for the reconsideration of the CA Decision. In a Resolution dated July 9, 2008, the CA denied petitioner's motion. 12 In this petition for review, petitioner raises the following issues: 1. The Honorable Court of Appeals erred in the appreciation of the facts of this case when it found that intimidation attended the execution of the promissory note subject of this case. 2. The Honorable Court of Appeals erred when it found that the promissory note was without consideration. 3. The Honorable Court of Appeals erred when it stated that petitioner should have filed [an action] for partition instead of a case for specific performance. 13 The petition is meritorious. Contracts are voidable where consent thereto is given through mistake, violence, intimidation, undue influence, or fraud. In determining whether consent is vitiated by any of these circumstances, courts are given a wide latitude in weighing the facts or circumstances in a given case and in deciding in favor of what they believe actually occurred, considering the age, physical infirmity, intelligence, relationship, and conduct of the parties at the time of the execution of the contract and subsequent thereto, irrespective of whether the contract is in a public or private writing. 14 Nowhere is it alleged that mistake, violence, fraud, or intimidation attended the execution of the promissory note. Still, respondent insists that she was "forced" into signing the promissory note because petitioner would not sign the document required by the BIR. In one case, the Court in characterizing a similar argument by respondents therein held that such allegation is tantamount to saying that the

other party exerted undue influence upon them. However, the Court said that the fact that respondents were "forced" to sign the documents does not amount to vitiated consent. 15 There is undue influence when a person takes improper advantage of his power over the will of another, depriving the latter of a reasonable freedom of choice. 16 For undue influence to be present, the influence exerted must have so overpowered or subjugated the mind of a contracting party as to destroy his free agency, making him express the will of another rather than his own. 17 Respondent may have desperately needed petitioner's signature on the Deed, but there is no showing that she was deprived of free agency when she signed the promissory note. Being forced into a situation does not amount to vitiated consent where it is not shown that the party is deprived of free will and choice. Respondent still had a choice: she could have refused to execute the promissory note and resorted to judicial means to obtain petitioner's signature. Instead, respondent chose to execute the promissory note to obtain petitioner's signature, thereby agreeing to pay the amount demanded by petitioner. The fact that respondent may have felt compelled, under the circumstances, to execute the promissory note will not negate the voluntariness of the act. As rightly observed by the trial court, the execution of the promissory note in the amount of P600,000.00 was, in fact, the product of a negotiation between the parties. Respondent herself testified that she bargained with petitioner to lower the amount: HCTAEc ATTY. VILLEGAS: Q And is it not that there was even a bargaining from P1-M to P600,000.00 before you prepare[d] and [sign[ed] that promissory note marked as Exhibit "C"? A Yes, sir.

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Q And in fact, you were the one [who] personally wrote the amount of P600,000.00 only as indicated in the said promissory note? A Yes, sir. COURT: Q So, just to clarify. Carmela was asking an additional amount of P1-M for her to sign this document but you negotiated with her and asked that it be lowered to P600,000.00 to which she agreed, is that correct? A Yes, Your Honor. Napilitan na po ako. Q But you negotiated and asked for its reduction from P1-M to P600,000.00? A Yes, Your Honor. 18 Contrary to the CA's findings, the situation did not amount to intimidation that vitiated consent. There is intimidation when one of the contracting parties is compelled to give his consent by a reasonable and well-grounded fear of an imminent and grave evil upon his person or property, or upon the person or property of his spouse, descendants, or ascendants. 19 Certainly, the payment of penalties for delayed payment of taxes would not qualify as a "reasonable and wellgrounded fear of an imminent and grave evil." We join the RTC in holding that courts will not set aside contracts merely because solicitation, importunity, argument, persuasion, or appeal to affection was used to obtain the consent of the other party. Influence obtained by persuasion or argument or by appeal to affection is not prohibited either in law or morals and is not obnoxious even in courts of equity. 20

On the issue that the promissory note is void for not being supported by a consideration, we likewise disagree with the CA. A contract is presumed to be supported by cause or consideration. 21 The presumption that a contract has sufficient consideration cannot be overthrown by a mere assertion that it has no consideration. To overcome the presumption, the alleged lack of consideration must be shown by preponderance of evidence. 22 The burden to prove lack of consideration rests upon whoever alleges it, which, in the present case, is respondent. Respondent failed to prove that the promissory note was not supported by any consideration. From her testimony and her assertions in the pleadings, it is clear that the promissory note was issued for a cause or consideration, which, at the very least, was petitioner's signature on the document. It may very well be argued that if such was the consideration, it was inadequate. Nonetheless, even if the consideration is inadequate, the contract would not be invalidated, unless there has been fraud, mistake, or undue influence. 23 As previously stated, none of these grounds had been proven present in this case. The foregoing discussion renders the final issue insignificant. Be that as it may, we would like to state that the remedy suggested by the CA is not the proper one under the circumstances. An action for partition implies that the property is still owned in common. 24 Considering that the heirs had already executed a deed of extrajudicial settlement and waived their shares in favor of respondent, the properties are no longer under a state of co-ownership; there is nothing more to be partitioned, as ownership had already been merged in one person. WHEREFORE, premises considered, the CA Decision dated February 21, 2008 and its Resolution dated July 9, 2008 are REVERSED and SET ASIDE. The RTC decision dated May 15, 2006 is REINSTATED.

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SO ORDERED. TcDIaA Corona, C.J., * Carpio, Leonardo-de Castro ** and Mendoza, JJ., concur. Footnotes 1. Penned by Associate Justice Normandie B. Pizarro, with Associate Justices Edgardo P. Cruz and Fernanda Lampas Peralta, concurring; rollo, 30-42. 2. Id. at 43-44.

14. Leonardo v. Court of Appeals, 481 Phil. 520, 532 (2004). 15. Development Bank of the Philippines v. Court of Appeals, G.R. No. 138703, June 30, 2006, 494 SCRA 25, 42-43. 16. Civil Code of the Philippines, Art. 1337. 17. Carpo v. Chua, G.R. Nos. 150773 and 153599, September 30, 2005, 471 SCRA 471, 482. 18. TSN, August 17, 2005, p. 11. 19. Civil Code of the Philippines, Art. 1335.

3. TSN, August 17, 2005, pp. 4-5. 4. The promissory note is a non-negotiable instrument as it does not conform to the requirements under Sec. 1 of the Negotiable Instruments Law; records, p. 57. 5. Id. at 5-6. 6. Id. 23. Civil Code of the Philippines, Art. 1355. 7. Id. at 25-29. 8. Id. at 26-27. 9. Id. at 102-103. 10. Id. at 104. 11. Rollo, p. 41. 12. Id. at 44. 13. Id. at 17-18. [G.R. NO. L-31831. APRIL 28, 1983.] ** Additional member in lieu of Associate Justice Roberto A. Abad per Special Order No. 905 dated October 5, 2010. FIRST DIVISION 24. Republic v. Baltazar-Ramirez, G.R. No. 148103, July 27, 2006, 496 SCRA 718, 721. * Additional member in lieu of Associate Justice Diosdado M. Peralta per Raffle dated May 27, 2009. 20. Martinez v. Hongkong & Shanghai Bank, 15 Phil. 252, 270 (1910). 21. Civil Code of the Philippines, Art. 1354. 22. Saguid v. Security Finance, Inc., G.R. No. 159467, December 9, 2005, 477 SCRA 256, 270-271.

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JESUS PINEDA, PETITIONER , VS. JOSE V. DELA RAMA AND COURT OF APPEALS, RESPONDENT. Rosauro Alvarez for petitioner. Arturo Zialcita for respondents. SYLLABUS 1. COMMERCIAL LAW; NEGOTIABLE. INSTRUMENTS LAW; SECTION 24; CONSIDERATION; PRESUMPTION THAT NEGOTIABLE INSTRUMENT IS ISSUED FOR VALID CONSIDERATION IS ONLY PRIMA FACIE. The Court of Appeals' reliance on Section 24 of the Negotiable Instruments Law is misplaced. The presumption that a negotiable instrument is issued for a valuable consideration is only prima facie. It can be rebutted by proof to the contrary. 2. CIVIL LAW; CONTRACTS; VOID CONTRACT; PROMISSORY NOTE EXECUTED FOR AN ILLEGAL CONSIDERATION. The consideration for the promissory note to influence public officers in the performance of their duties is contrary to law and public policy. The promissory note is void ab initio and no cause of action for the collection cases can arise from it.

Dela Rama is a practicing lawyer whose services were retained by Pineda for the purpose of making representations with the chairman and general manager of the National Rice and Corn Administration (NARIC) to stop or delay the institution of criminal charges against Pineda who allegedly misappropriated 11,000 cavans of palay deposited at his ricemill in Concepcion, Tarlac. The NARIC general manager was allegedly an intimate friend of Dela Rama. prcd According to Dela Rama, petitioner Pineda has used up all his funds to buy a big hacienda in Mindoro and, therefore, borrowed the P9,300.00 subject of his complaint for collection. In addition to filing the suit to collect the loan evidenced by the matured promissory note, Dela Rama also sued to collect P5,000.00 attorney's fees for legal services rendered as Pineda's counsel in the case being investigated by NARIC. The Court of First Instance of Manila decided Civil Case No. 45762 in favor of petitioner Pineda. The court believed the evidence of Pineda that he signed the promissory note for P9,300.00 only because Dela Rama had told him that this amount had already been advanced to grease the palms of the Chairman and General Manager of NARIC in order to save Pineda from criminal prosecution. The court stated: xxx xxx xxx ". . . The Court, after hearing the testimonies of the witnesses and examining the exhibits in question, finds that Exhibit A proves that the defendant himself did not receive the amount stated therein, because according to said exhibit that amount was advanced by the plaintiff in connection with the defendant's case, entirely contradicting the testimony of the plaintiff himself, who stated in open Court that he gave the amount in cash in two installments to the defendant. The Court is more inclined to believe the contents of Exhibit A, than the testimony of the

DECISION

GUTIERREZ, JR., J p: This is a petition to review on certiorari a decision of the Court of Appeals which declared petitioner Jesus Pineda liable on his promissory note for P9,300.00 and directed him to pay attorney's fees of P400.00 to private respondent, Jose V. dela Rama.

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plaintiff. On this particular matter, the defendant has established that the plaintiff made him believe that he was giving money to the authorities of the NARIC to grease their palms to suspend the prosecution of the defendant, but the defendant, upon inquiry, found out that none of the authorities has received that amount, and there was no case that was ever contemplated to be filed against him. It clearly follows, therefore, that the amount involved in this Exhibit A was imaginary. It was given to the defendant, not to somebody else. The purpose for which the amount was intended was illegal. "However, the Court believes that plaintiff was able to get from the defendant the amount of P3,000.00 on October 7, as shown by the check issued by the defendant, Exhibit 2, and the letter, Exhibit 7, was antedated October 6, as per plaintiff's wishes to show that defendant was indebted for P3,000.00 when, as a matter of fact, such amount was produced in order to grease the palms of the NARIC officials for withholding an imaginary criminal case. Such amount was never given to such officials nor was there any contemplated case against the defendant. The purpose for which such amount was intended was indeed illegal." The trial court rendered judgment as follows: "WHEREFORE, the Court finds by a preponderance of evidence that the amount of P9,300.00 evidenced by Exhibit A was not received by the defendant, nor given to any party for the defendant's benefit. Consequently, the plaintiff has no right to recover said amount. The amount of P3,000.00 was given by the defendant to grease the palms of the NARIC officials. The purpose was illegal, null and void.

Besides, it was not given at all, nor was it true that there was a contemplated case against the defendant. Such amount should he returned to the defendant. The services rendered by the plaintiff to the defendant is worth only P400.00, taking into consideration that the plaintiff received an air-conditioner and six sacks of rice. The court orders that the plaintiff should return to the defendant the amount of P3,000.00, minus P400.00 plus costs." The Court of Appeals reversed the decision of the trial court on a finding that Pineda, being a person of more than average intelligence, astute in business, and wise in the ways of men would not "sign any document or paper with his name unless he was fully aware of the contents and important thereof, knowing as he must have known that the language and practices of business and of trade and commerce call to account every careless or thoughtless word or deed." The appellate court stated: "No rule is more fundamental and by men of honor and goodwill more dearly cherished, than that which declares that obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. Corollary to and in furtherance of this principle, Section 24 of the Negotiable Instruments Law (Act No. 2031) explicitly provides that every negotiable instrument is deemed prima facie to have been issued for a valuable consideration, and every person whose signature appears thereon to have become a party thereto for value." We find this petition meritorious.

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The Court of Appeals relied on the efficacy of the promissory note for its decision, citing Section 24 of the Negotiable Instruments Law which reads: SECTION 24. Presumption of consideration. Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration and every person whose signature appears thereon to have become a party thereto for value." The Court of Appeals' reliance on the above provision is misplaced. The presumption that a negotiable instrument is issued for a valuable consideration is only prima facie. It can be rebutted by proof to the contrary. (Bank of the Philippine Islands v. Laguna Coconut Oil Co. et al., 48 Phil. 5)." According to Dela Rama, he loaned the P9,300.00 to Pineda in two installments on two occasions five days apart first loan for P5,000.00 and second loan for P4,300.00, both given in cash. He also alleged that previously he loaned P3,000.00 but Pineda paid this other loan two days afterward. These allegations of Dela Rama are belied by the promissory note itself. The second sentence of the note reads "This represents the cash advances made by him in connection with my case for which he is my attorney-in-law." The terms of the note sustain the version of Pineda that he signed the P9,300.00 promissory note because he believed Dela Rama's story that these amounts had already been advanced by Dela Rama and given as gifts for NARIC officials. Dela Rama himself admits that Pineda engaged his services to delay by one month the filing of the NARIC case against Pineda while the latter was trying to work out an amicable settlement. There is no question that Dela Rama was indeed a close friend of then NARIC Administrator Jose Rodriquez having worked with him in the Philippine consulate at Hongkong and that Dela Rama made what he

calls "proper representations" with Rodriguez and with other NARIC officials in connection with the investigation of the criminal charges against Pineda. Cdpr We agree with the trial court which believed Pineda. It is indeed unusual for a lawyer to lend money to his client whom he had known for only three months, with no security for the loan and on interest. Dela Rama testified that he did not even know what Pineda was going to do with the money he borrowed from him. The petitioner had just purchased a hacienda in Mindoro for P210,000.00, owned sugar and rice lands in Tarlac of around 800 hectares, and had P60,000.00 deposits in three banks when he executed the note. It is more logical to believe that Pineda would not borrow P5,000.00 and P4,300.00 five days apart from a man whom he calls a "fixer" and whom he had known for only three months. There is no dispute that an air-conditioning unit valued at P1,250.00 was purchased by Pineda's son and given to Dela Rama although the latter claims he paid P1,250.00 for the unit when he received it. Pineda, however, alleged that he gave the air-conditioning unit because Dela Rama told him that Dr. Rodriguez was asking for one air-conditioning machine of 1.5 horsepower for the latter's NARIC office. Pineda further testified that six cavans of first class rice also intended for the NARIC Chairman and General Manager, together with the air-conditioning unit, never reached Dr. Rodriguez but were kept by the lawyer. Considering the foregoing, we agree with the trial court that the promissory note was executed for an illegal consideration. Articles 1409 and 1412 of the Civil Code in part, provide: Art. 1409. The following contracts are inexistent and void from the beginning: (1) Those whose cause, object or purpose is contrary to law, morals, good customs, public order and public policy;

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Eladio B. Samson for petitioner. xxx xxx xxx Art. 1412. If the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, the following rules shall be observed: (1) When the fault is on the part of both contracting parties, neither may recover what he has given by virtue of the contract, or demand the performance of the other's undertaking. xxx xxx xxx Whether or not the supposed cash advances reached their destination is of no moment. The consideration for the promissory note to influence public officers in the performance of their duties is contrary to law and public policy. The promissory note is void ab initio and no cause of action for the collection cases can arise from it. cdrep WHEREFORE, the decision of the Court of Appeals is SET ASIDE, The complaint and the counterclaim in Civil Case No. 45762 are both DISMISSED. SO ORDERED. Teehankee (Chairman), Melencio-Herrera, Plana, Vasquez and Relova, JJ., concur. THIRD DIVISION [G.R. NO. 56169. JUNE 26, 1992.] TRAVEL-ON, INC., PETITIONER , VS. COURT OF APPEALS AND ARTURO S. MIRANDA, RESPONDENTS . Benjamin Bernardino & Associates Law Offices for private respondent. SYLLABUS 1. COMMERCIAL LAW; NEGOTIABLE INSTRUMENTS LAW; PRESUMPTION OF CONSIDERATION; RULE. 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. 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. ID.; ID.; ID.; BURDEN OF PROOF TO REBUT THEREOF; LIES WITH THE DRAWER; CASE AT BAR. 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. 3. ID.; ID.; ACCOMMODATION TRANSACTION; NOT ESTABLISHED IN CASE AT BAR; REASONS THEREFOR. 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

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Negotiable Instruments Law does refer to accommodation transactions, no such transaction was here shown. 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. 4. ID.; ID.; ID.; LIABILITY OF DRAWER IN THE ABSENCE OF PROOF THEREOF; CASE AT BAR. 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, that the checks were supported by valuable consideration. Private respondent maker of the checks did not successfully rebut these presumptions. The only evidence aliunde that private respondent offered was his own selfserving 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" the Travel-On's account receivable 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; 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 them 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. 5. CIVIL LAW; MORAL DAMAGES; AWARD THEREOF, NOT PROPER IN THE ABSENCE OF BAD FAITH. 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.

RESOLUTION

FELICIANO, J p: 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

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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. Cdpr 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 overpayments, 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 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. 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 TravelOn 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. prLL 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 Appeals' 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

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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.

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.

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. LLjur 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.

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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: "Section 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 TravelOn 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

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deceive petitioner's Board of Directors and to misrepresent TravelOn'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. Gutierrez, Jr., Bidin, Davide, Jr. and Romero, JJ ., concur. Footnotes 1. Section 24 of the Negotiable Instruments Law provides: "Section 24. Presumption of consideration. Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration; and every person whose signature appears thereon to have become a party thereto for value." Section 5(s) of Rule 131 also establishes the presumption "[t]hat a negotiable instrument was given or indorsed for a sufficient consideration; . . ." 2. Pineda vs. dela Rama, 121 SCRA 671 (1983); Bank of Philippine Islands vs. Laguna Coconut Oil Co., 48 Phil. 5 (1925). 3. Section 60 of the Negotiable Instruments Law provides: "Section 60. Liability of maker. The maker of a negotiable instrument, by making it, engages that he will pay it according to its tenor, and admits the existence of the payee and his then capacity to indorse."

Further, Section 61 provides: "Section 61. Liability of drawer. The drawer by drawing the instrument admits the existence of the payee and his then capacity to indorse; and engages that, on due presentment, the instrument will be accepted or paid, or both, according to its tenor, and that if it be dishonored and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder or to any subsequent indorser who may be compelled to pay it . . ." Finally, Section 66 provides: "Section 66. Liability of general indorser. Every indorser who indorses without qualification, warrants to all subsequent holders in due course: xxx xxx xxx And in addition, he engages that, on due presentment, it shall be accepted or paid, or both, as the case may be, according to its tenor, and that if it be dishonored and the necessary proceedings on dishonor be duly taken, he will pay the amount thereof to the holder, or to any subsequent indorser who may be compelled to pay it." 4. Section 59 of the Negotiable Instruments Law provides: "Section 59. Who is deemed holder in due course. Every holder is deemed prima facie to be a holder in due course; . . ."

See Also Fossum v. Fernandez Hermanos, 44 Phil. 713 (1923).

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5. Section 24, Negotiable Instruments Law, supra; A similar provision is found in Article 1354, Civil Code of the Philippines: "Art. 1354. Although the cause is not stated in the contract, it is presumed that it exists and is lawful, unless the debtor proves the contrary." Also Penaco v. Ruaya, 110 SCRA 46 (1981). 6. See generally Cuyugan v. Santos, 34 Phil. 100 (1916); Tolentino v. Gonzales, 50 Phil. 558 (1927).