Ting Ting Pua v. Sps.

Lo Bun Tiong AUTHOR: Espiritu

G.R. No. 198660. October 23, 2013
TOPIC: Incomplete but delivered Instruments
CASE LAW/ DOCTRINE:
Negotiable Instruments are presumed issued for a consideration.
When an instrument is no longer in the possession of the person who signed it and it is complete in its terms "a valid and intentional
delivery by him is presumed until the contrary is proved. (SEC 16 Negotiable Instruments Law)
FACTS:
Petitioner filed a Complaint for a Sum of Money against Respondents presenting a PhP8,500,000 covered Asiatrust Check and (17) other
checks which were all dishonored
Petitioner allege: On 1988, respondent-spouses Benito Lo Bun Tiong (Benito) and Caroline Siok Ching Teng (Caroline) loaned
PhP1,975,000 from petitioner Ting Ting Pua (Pua) under a compound interest agreement without any collateral but instead to issue
postdated checks. These posted checks (17) where all dishonored with a total amount of PhP1,975,000 however the petitioner allowed
more time on account of respondents allege financial difficulties
On September 1996, Petitioner informed respondent of her stipulated debt inclusive of the 2% agreed monthly compounded interest
however the amount was mutually agreed to be lowered to PhP8,500,000. Respondent delivered the reduced amount in the subject
Asiatrust Check dated March 30, 1997 however the said check was also dishonored. Hence Petitioner decided to file the complaint
Respondent allege: Respondent never obtained a loan from the Petitioner and that the respondent was instead in a partnership of a mahjong
business with Petitioners sister (Lilian). On account of a disagreement, the partnership was dissolve however respondent had already
issued 5 postdated checks to be used in the costs of the business. She claims the PhP8,500,000 Asiatrust Bank Check was never issued by
her since the check was type written and she had always issued checks handwritten and theorized that instead it was the petitioner who
completed the check upon delivery. The 17 post-dated checks that the petitioner states as issued for her in exchange for the loan was
actually checks issued to others that the petitioner has come into possession of.
RTC HELD: infavor of petitioner. The possession by petitioner of the checks signed by Respondent (Caroline), under the Negotiable
Instruments Law, raises the presumption that they were issued and delivered for a valuable consideration.
CA HELD: Reversed however the decision of the RTC. That the Asiatrust Bank Check was an incomplete delivered instrument
and that petitioner has failed to prove the existence of respondents' indebtedness to her
Hence, petitioner came to this Court via a Petition for Review on Certiorari
ISSUE(S): WON the petitioner possession of the Asiatrust Bank Check sufficiently proves the existence of the alleged debt

HELD: YES
Although, in a suit for a recovery of sum of money the creditor has the burden of proof to show that the defendant had not paid the
amount of the contracted loan. However, it has been established that where creditor possesses and submits in evidence an instrument
showing the indebtedness, a presumption that the credit has not been satisfied and it is the defendant who is required to overcome the
presumption and prove there has actually been payment.
 CA erred in stating the petitioner "failed to establish [the] alleged indebtedness in writing" given the checks issued by respondent
Caroline in 1988 and 1996 that were in the possession of gives rise to the presumption of a debt.
BASIS: In Pacheco v. Court of Appeals and Lim v. Mindanao Wines and Liqueur Galleria, the Court ruled that a check "constitutes an
evidence of indebtedness.; Under Section 24 of the Negotiable Instruments Law: Every negotiable instrument is deemed pima facie to
have been issued for a valuable consideration;
Sec. 16 of the Negotiable Instruments Law provides that when an instrument is no longer in the possession of the person who signed it
and it is complete in its terms "a valid and intentional delivery by him is presumed until the contrary is proved."
Respondents' other defenses are equally unconvincing and incredible; attested to by respondents' very own witness the respondent has a
documented history of issuing insufficiently checks for 69 times at the very least.
JUDGEMENT: Motion for Reconsideration is GRANTED and Reversing and setting aside CA decision

NOTE:
COURT ADDITIONALLY HELD: the respondent however is not obligated to pay for the interests since Article 1956 of the Civil Code,
which refers to monetary interest, specifically mandates that no interest shall be due unless it has been expressly stipulated in writing.
Instead petitioner is entitled only to the principal amount of the loan plus the allowable legal interest from the time of the demand, 70 at
the rate of 6% per annum.