Monday, February 20, 2012

Travel-On v. CA (210 SCRA 352)

Facts: Travel-On (petitioner) is a travel agency, selling airline tickets on commission basis for and in behalf of different air-line companies. Arturo Miranda (respondent) had a running credit line with said agency. He procured tickets from Travel-On on behalf of airline passengers and derived commissions therefrom. Travel-On filed a suit to collect six (6) checks issued by the respondent totalling 115,000 pesos. Respondent avers that he has no obligations to petitioner and argues that the checks that the petitioner is seeking to collect from him were for purposes of “accommodation.” The respondent’s story is that the General Manager of Travel-On asked respondent to write the checks because she used them as “evidence” to show the Board of Directors that the financial condition of the company was sound. Petitioner denies this accusation.

Issue: Whether or not the checks are evidence of the liability of the respondent to the petitioner even assuming that they were for purposes of accommodation.

Held: The checks themselves are proof of the indebtedness of the respondent to petitioner. Even if the checks were for purposes of accommodation, as described in Sec. 29 of the Negotiable Instruments Law, the respondent would still be liable considering that the petitioner is a holder for value. “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.” “The rule is quite settled that a negotiable instrument is presumed to have been given or indorsed for a sufficient consideration unless otherwise contradicted by other competent evidence.” The facts that all checks issued by the respondent to petitioner were presented for payment by the latter would lead to no other conclusion than that these checks were intended for enchasment.

There is nothing in the checks themselves or in any

other document that states otherwise. The argument of the respondent that the checks were merely “simulated” cannot stand without the clearest and most convincing kinds of evidence. No such evidence was submitted by the respondent.

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