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BANK OF THE PHILIPPINE ISLANDS v GREGORIO C.

ROXAS
GR. No. 157833 OCTOBER 15, 2007
I. STATEMENT OF THE CASE
For our resolution is the instant Petition for Review on Certiorari assailing the
Decision of the Court of Appeals (Fourth Division) dated February 13 !""3 in CA#
$%R% C& 'o% ()*+"%
II. STATEMENT OF THE FACTS
Respondent $regorio C% Ro,as delivered stoc-s of vegetable oils to spouses
Rodrigo and .arissa Cawili% /n return spouses issued a personal chec- in the
a0ount of P 31++"2%2" as pay0ent% 3owever when respondent tried to encash the
said chec- it was subse4uently dishonored by the drawee ban-% 5pouses later on
pro0ised Respondent that they would replace the bounced chec- with a cashier6s
chec- fro0 petitioner 7an- of the Philippine /sland (7P/)%
Respondent and Rodrigo Cawili went to 7P/ 5haw 7oulevard .andaluyong City%
8hey were assisted by the 7P/ branch 0anager 9l0a Capistrano% :ita 5agun
prepared a 7P/ Cashier6s Chec- in the a0ount of P 31++"2%2" to be drawn against
the account of .arisa Cawili and payable to respondent Ro,as upon the instruction
of branch 0anager Capistrano% ;hen the cashier6s chec- was finali<ed Rodrigo
gave it to respondent Ro,as in the presence of Capistrano%
Respondent Ro,as returned the ne,t day to encash the said chec- but it was
dishonored by the ban- since it was already a closed account% /t appears that
.arissa closed the account prior to the encash0ent of the chec- by respondent%
Respondent Ro,as de0anded for the encash0ent of the cashier6s chec- but the
ban- officers refused to do so and even tried to retrieve the said chec-% ;hen
Respondent Ro,as see-ed the advice of his lawyer the latter infor0ed hi0 to
deposit the said chec- to his account (respondent) at Citytrust =rtigas Avenue%
subse4uently the chec- was dishonored for being an >Account Closed>%
Respondent Ro,as filed a co0plaint for su0 of 0oney against petitioner 7P/ at the
R8C of Pasig City% Respondent prayed for the pay0ent of the a0ount in the chec-
da0ages and cost of suit%
Petitioner on the other hand denied the allegations in the co0plaint% /t reasoned that
7P/ issued the chec- by 0ista-e in good faith? that its dishonor was due to lac- of
consideration? and that respondent6s re0edy was to sue Rodrigo Cawili who
purchased the chec-% 7P/ as-s for pay0ent of attorney6s fees and cost of litigation%
Petitioner 7P/ also filed a third#party co0plaint against spouses Cawili but was later
on declared in default for their failure to file their answer%
R8C ruled in favor of Respondent Ro,as% R8C li-ewise ruled that third#party
defendants 5pouses Rodrigo and .arissa Cawili were ordered to inde0nify 7P/ by
the a0ount ad@udged and actually paid by it to Respondent Ro,as% ;hen appealed
the CA affir0ed the decision of the lower court%
III. ISSE
1% ;hether or not the Court of Appeals erred in finding that respondent is a holder in
due course
!% ;hether or not the Court of Appeals erred in holding that petitioner is liable to
respondent for the a0ount of the cashier6s chec-%
I!. ARGMENTS AND DISCSSION
". F#$%& I%%'(
5ection 2! of the 'egotiable /nstru0ents :aw providesA
SEC. 52. What constitutes a holder in due course. B A holder in due
course is a holder who has ta-en the instru0ent under the following
conditionsA
(a) 8hat it is co0plete and regular upon its face?
(b) 8hat he beca0e the holder of it before it was overdue and without
notice that it had been previously dishonored if such was the fact?
(c) 8hat he too- it in good faith and for value?
(d) 8hat at the ti0e it was negotiated to hi0 he had no notice of any
infir0ity in the instru0ent or defect in the title of person negotiating it%

As a general rule under the above provision every holder is
presu0ed prima facie to be a holder in due course% =ne who clai0s otherwise has
the onus probandi to prove that one or 0ore of the conditions re4uired to constitute
a holder in due course are lac-ing%
Petitioner6s contends that the ele0ent of >value> is not present therefore respondent
could not be a holder in due course%
5ection !2 of the 'egotiable /nstru0ents :aw providesA
SEC. 25. Value, what constitutes. ) &alue is any consideration sufficient
to support a si0ple contract% An antecedent or pre#e,isting debt
constitutes value? and is dee0ed as such whether the instru0ent is
payable on de0and or at a future ti0e%
/n Walker Rubber Corp. v. Nederlandsch Indische & Handelsbank, N.V. and South
Sea Suret & Insurance Co., Inc., this Court ruled that ! !"*'( Cin general ter0s 0ay
be so0e right interest profit or benefit to the party who 0a-es the contract or so0e
forbearance detri0ent loan responsibility etc% on the other side%D 3ere there is
no dispute that respondent received Rodrigo CawiliEs cashierEs chec- as pay0ent for
the for0erEs vegetable oil% 8he fact that it was Rodrigo who purchased the cashierEs
chec- fro0 petitioner will not affect respondentEs status as a holder for value since
the chec- was delivered to hi0 as pay0ent for the vegetable oil he sold to spouses
Cawili% &erily the Court of Appeals did not err in concluding that respondent is a
holder in due course of the cashierEs chec-%
b% 5econd /ssue
/n International Corporate "ank v. Spouses #ueco this Court held that a cashierEs
chec- is really the ban-Es own chec- and 0ay be treated as a pro0issory note with
the ban- as the 0a-er% 8he chec- beco0es the +$#,"$- o.*#/"&#o0 o1 &2( ."03
42#52 #%%'(% #& "06 5o0%&#&'&(% " 4$#&&(0 +$o,#%( &o +"- '+o0
6(,"06% /n Ne$ %acific &imber & Suppl Co. Inc. v. Se'eris this Court too-
@udicial notice of the Cwell#-nown and accepted practice in the business sector that a
cashierEs chec- is dee0ed as cash%D 8his is because &2( ,($( #%%'"05( o1 "
5"%2#($7% 52(53 #% 5o0%#6($(6 "55(+&"05( &2($(o1%
Petitioner ban- beca0e liable to respondent fro0 the 0o0ent it issued the cashierEs
chec-% 3aving been accepted by respondent sub@ect to no condition
whatsoever petitioner should have paid the sa0e upon present0ent by the for0er%
!. DECISION
89HEREFORE the petition is DENIED% 8he assailed Decision of the Court of
Appeals (Fourth Division) in CA#$%R% C& 'o% ()*+" is AFFIRMED% Costs against
petitioner%>

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