Manuel Ubas, Sr., vs.

Wilson Chan
February 6, 2017 | Perla S – Bernabe, J. | Section 16 of NIL

Petitioner: Manuel C. Ubas, Sr.

Respondent: Wilson Chan

Summary: Chan is indebted to Ubas for the amount of P1.5 million pesos representing the
construction materials purchased by him. Chan issued three checks to Ubas, however when it was
presented for encashment by the latter, it was dishonored due to stop payment order. Chan contends
that the checks were not intended for Ubas, but for the project engineer of Macagtas Dam Project.
Because of his refusal to pay, Ubas filed an action for the recovery of sum of money with
application for writ of attachment.

Doctrine: The person whose signature appears in the instrument is liable to the holder thereof if
there is a valid and intentional delivery. Under section 16 of the NIL, if the instrument is no longer
in the hands of the person whose signature appears thereon, a valid and intentional delivery by him
is presumed until the contrary is proved. The burden of overcoming such presumption lies in the
person making the delivery.

FACTS:

Ubas and Chan entered into a verbal agreement where Ubas will supply for the construction
materials amounting to P1.5 million pesos for the Macagtas Dam Project. Chan has defaulted in
payment and because of his refusal to pay, Ubas filed an action for the recovery of sum of money
with an application for writ of attachment. According also to Ubas, Chan has given him three (3)
checks that were dishonored by the bank when presented for encashment due to stop payment
order. Chan contends on the other hand that the checks were not intended for Ubas but for the
project engineer of Macagtas Dam Project.

ISSUE: Whether or Not Ubas will be entitled for the payment of construction materials purchased
by Chan.

RULING:

Yes, the Court ruled that Ubas will be entitled for the payment of the construction materials
purchased by Chan.

The Court explained that the right of Ubas for the payment of the construction materials was
derived from the contract between them that is perfectly valid. Also, under section 16 of the NIL,
when an instrument is no longer in the hands of the person whose signature appears thereon, a
valid and intentional delivery by him is presumed until the contrary is proved. The purpose of the
delivery is to transfer the property in the instrument to the holder therof.
In this case, Chan has not able to prove that the checks were not intended for Ubas because if his
contention that the checks were really intended for the project engineer who lost the same, then
why did he not file a case for theft against Ubas, who according to him has stolen the checks and
if Ubas has really stolen the check, then why did he included it in his demand letters to Chan.

Therefore based on the foregoing, Chan has not able to overcome such presumption and thus he is
liable to Ubas for the payment of the construction materials purchased by him.

RATIO:

 ISSUE: Whether or Not Ubas is entitled for payment of the construction materials
purchased by Chan

The Court in this case ruled based on the validity of the contract between the parties and Section
16 of the NIL. According to the Court, Ubas, through preponderance of evidence, has able to prove
his claim and therefore is entitled for the payment of the construction materials purchased by Chan.