G.R. No. 215910 Ubas vs.

Chan
Although the checks were under the account name of Unimasters, it should
be emphasized that the manner or mode of payment does not alter the
Facts: Petitioner alleged that respondent, “doing business under the name nature of the obligation. The source of obligation, as claimed by petitioner in
and style of UNIMASTER,” was indebted to him in the amount of this case, stems from his contract with respondent. When they agreed upon
₱1,500,000.00, representing the price of boulders, sand, gravel, and other the purchase of the construction materials on credit for the amount of
construction materials allegedly purchased by respondent from him for the ₱1,500,000,00, the contract between them was perfected. Therefore, even if
construction of the Macagtas Dam in Macagtas, Catarman, Northern Samar. corporate checks were issued for the payment of the obligation, the fact
Further, he averred that respondent had issued three (3) bank checks, remains that the juridical tie between the two (2) parties was already
payable to “CASH” in the amount of ₱500,000.00 but when petitioner established during the contract’s perfection stage and, thus, does not
presented the subject checks for encashment, the same were dishonored preclude the creditor from proceeding against the debtor during the
due to a stop payment order. contract’s consummation stage.

Respondent filed an Answer with Motion to Dismiss, seeking the dismissal of That a privity of contract exists between petitioner and respondent is a
the case on the following ground, among others: the complaint states no conclusion amply supported by the averments and evidence on record in this
cause of action, considering that the checks do not belong to him but to case. First, the Court observes that petitioner was consistent in his account
Unimasters Conglomeration, Inc. (Unimasters). that he directly dealt with respondent in his personal and not merely his
representative capacity. Moreover, the demand letter, which was admitted
The Regional Trial Court (RTC) ruled that petitioner had a cause of action by respondent, was personally addressed to respondent and not to
against respondent. At the outset, it observed that petitioner’s demand letter Unimasters as represented by the latter. Also, petitioner explained that he
– which clearly stated the serial numbers of the checks, including the dates delivered the construction materials to respondent absent any written
and amounts thereof – was not disputed by respondent. agreement due to his trust on the latter.

The CA reversed and set aside the RTC’s ruling, dismissing petitioner’s
complaint on the ground of lack of cause of action. It held that respondent
was not the proper party defendant in the case, considering that the drawer
of the subject checks was Unimasters, which, as a corporate entity, has a
separate and distinct personality from respondent.

Issue: Whether or not the CA erred in dismissing petitioner’s complaint for

lack of cause of action.

Rulings:

Yes, the CA erred in dismissing petitioner’s complaint for lack of cause of

action.
G.R. No. 135043 units belonging to different individuals; repair of several existing housing
units and
July 14, 2004 repair of facilities, all located in the Virginia Valley Subdivision, for a total
contract
TOWNE & CITY DEVELOPMENT CORPORATION, petitioner, vs. price of P1,041,359.00. The agreement provides that Guillermo should be
COURT OF APPEALS​ and GUILLERMO R. VOLUNTAD (substituted by paid in full
TOMAS upon completion of the project in 1985, and was allowed by petitioner to
VOLUNTAD and FLORDELIZA ESTEBAN Vda. De VOLUNTAD) occupy,
respondents. free of charge, one of its houses in said subdivision pending completion of
the
Doctrine: Under Article 1249 of the Civil Code, payment of debts in money project.
has After completing the project, Guillermo demanded for the payment of his
to be made in legal tender and the delivery of mercantile documents, services,
including which the petitioner refused. Thus, Guillermo filed a Complaint for Collection
checks, "shall produce the effect of payment only when they have been against
cashed, or the petitioner. In its Answer, petitioner averred that it had already paid
when through the fault of the creditor they have been impaired." Guillermo for
his services and claimed that Guillermo is liable for unpaid rentals for his
From the text of the Civil Code provision, it is clear that there are two occupancy
exceptions to of one of the houses in the subdivision.
the rule that payment by check does not extinguish the obligation. Neither The petitioner presented its Corporate Secretary (Rhoda Aguila) as its sole
exception is present in this case. Concerning the first, petitioner failed to witness.
produce She testified that she personally handed or delivered the case or check
the originals of the checks after their supposed encashment and even the payments to
bank Guillermo, who in turn acknowledged payments with his signatures on the
statements although the supposed payments by check were effected only vouchers.
about 5 TRIAL COURT: ordering the defendant to pay the unpaid balance with 3%
years before the filing of the collection suit. Anent the second exception, the interest
doctrine is that it does not apply to instruments executed by the debtor from the time of filing the complaint until full satisfaction.
himself and
delivered to the creditor. COURT OF APPEALS: affirmed in all respects
Facts: Issue:
Petitioner Towne & City Development and respondent Guillermo entered into Whether or not the vouchers and other documentary exhibits may be
a considered as
construction contract, whereby the latter undertake to construct several proofs of payment
housing Ruling:
NO. Citing the case of PNB v. Court of Appeals, the SC ruled that while a delivery of mercantile documents, including checks, "shall produce the effect
receipt of of
payment is the best evidence of the fact of payment, it is, however, not payment only when they have been cashed, or when through the fault of the
conclusive creditor they have been impaired."
but merely presumptive; neither it is exclusive evidence as the fact of
payment may From the text of the Civil Code provision, it is clear that there are two
be established also by parole evidence. exceptions
In the case at bar, petitioner has relied on vouchers to prove its defense of to the rule that payment by check does not extinguish the obligation. Neither
payment. However, as correctly pointed out by the trial court which the
appellate exception is present in this case. Concerning the first, petitioner failed to
court upheld, vouchers are not receipts. produce
the originals of the checks after their supposed encashment and even the
It should be noted that a voucher is not necessarily an evidence of payment. bank
It statements although the supposed payments by check were effected only
is merely a way or method of recording or keeping track of payments made. about 5
A years before the filing of the collection suit. Anent the second exception, the
procedure adopted by companies for the orderly and proper accounting of doctrine is that it does not apply to instruments executed by the debtor
funds himself and
disbursed. Unless it is supported by an actual payment like the issuance of a delivered to the creditor. Indubitably, that is not the situation in this case.
check which is subsequently encashed or negotiated, or an actual payment
of Disposition: Petition is denied, CA Decision is AFFIRMED.
cash duly receipted for as is customary among businessmen, a voucher
remains
a piece of paper having no evidentiary weight. (Emphasis supplied).

A receipt is a written and signed acknowledgment that money has been or

goods
have been delivered,26 while a voucher is documentary record of a business
transaction.

The references to alleged check payments in the vouchers presented by the

petitioner do not vest them with the character of receipts. Under Article 1249
of the
Civil Code, payment of debts in money has to be made in legal tender and
the
Fortunado v. CA
GR No. 78556; 21 April 1991; Cruz, J. On Feb 11, 1985, NSC filed with the trial court an Urgent Motion to Redeem
DOCTRINE (from Campos p. 546) both lots.
In case of redemption of property sold under execution, a tender of payment This was opposed by the petitioners on the ground that the movant did not
within the have personality to
prescribed period, of the redemption price by check which was accepted by intervene.
the sheriff,
constitutes valid exercise of redemption, without prejudice to the actual -
payment of the purchase
price. Redemption is a right and not an obligation, and thus not covered by As the period of redemption would expire on April 18, 1985, NSC issued to
Art. 1249, CC. the sherif
FACTS on March 20, 1985, a PNB check in the amount of P296,384.43 as the
On April 21, 1981, RTC-QC rendered judgment in a civil case entitled Alfaro redemption
Fortunado v. price for the second lot. The sherif acknowledged receipt of the same check.
Angel Bautista ordering the defendant (Bautista) to pay damages to the On March 21, 1985,
plaintiff. Pursuant to Bautista sent the sheriff a Letter bearing NSC’s conformity in which he
the judgment, the respondent sheriff levied upon two parcels of land availed himself of
registered in the name of NSC’s check, which was sufficient to cover the full redemption price for both
Bautista. lots, to
The second lot had already been purchased by respondent National Steel redeem the other lot.
Corporation (NSC) but had not yet been registered. The letter contained a
- reservation that the redemption is made solely for the purpose of effecting
the execution
The lots were sold at a public auction to the petitioners as the only bidder. and delivery to Bautista of the necessary certificate of redemption. It shall
They were not be taken as
issued a certificate of sale. his acknowledgement of the validity of the writ of execution and sale or as a
waiver of
- legal remedies available to him.
The sheriff acknowledged
On Jan 10, 1985, NSC gave notice to the sheriff of its intention to redeem receipt of the check as redemption for the two parcels of land on March 21,
the second lot. 1985. He
The sheriff suggested that both lots should be redeemed as the two lots issued a certificate of redemption the next day in favor of NSC and Bautista.
were sold for a lump
sum price of P267,013. -

-
In an Urgent Motion, Bautista prayed that the sum covered by the PNB that Art. 1249 was applicable in cases of redemption
check be delivered Reiterated that settled
and kept by the Clerk of Court of the RTC-QC until such time as all incidents jurisprudence that the right of redemption is not an obligation nor is it
relative to the intended to
validity of the auction sale conducted by the sheriff were finally resolved. discharge a pre-existing debt, the right of redemption being in fact a privilege
Cited Javellana v. Mirasol
- and ruled that the redemption was not rendered invalid by the fact that the
officer
Upon being notified of the said deposit, the counsel for the petitioners told accepted a check for the amount necessary to make a redemption instead of
the sheriff that requiring
he was rejecting the check because it was not legal tender and was not payment of money.
intended for payment
but merely for deposit as evidenced by Bautista’s Urgent Motion. -

- Petitioners filed an Appeal by Certiorari.

The petitioner requested the sheriff to issue a final deed of sale over the two ISSUE: W/N redemption had been validly effected by private respondents
lots and NSC and
deliver the same to them on the ground that no valid redemption had been Bautista – Yes.
effected within the HELD: Petition denied. CA Decision affirmed.
12-month period from the registration of the sale. When the request was not RATIO
granted, Tolentino v. CA, citing Javellana v. Mirasol, stresses the liberality of the
petitioners filed with the CA a Petition for Mandamus. courts in
1 redemption cases.
-
Petitioners argued that
1 The right of redemption is an absolute privilege, the exercise of which is
Art. 1249 , CC was applicable to redemption under Rule 39, Section 30, entirely
ROC dependent upon the will and discretion of the redemptioners. There is no
Since the check issued by obligation to exercise
NSC is not legal tender, it could not be considered payment of the the redemption.
redemption price.
- -

CA: denied mandamus If the redemptioners choose to exercise their right, it is the policy of the law
Rejected the contention to aid rather
than defeat the right of redemption. It should be looked upon with favor and of Court) dated March 27, 1985. The motions were well within the
where no injury is redemption period.
to follow, a liberal construction will be given to our redemption laws as well
as to the exercise of Minor issue: W/N Bautista’s letter where he made his redemption subject to
the right of redemption. the
reservation [that it shall not be taken to mean his acknowledgement to the
Redemption is not rendered invalid by fact that the officer accepted a check validity of
for the 1
amount necessary to make the redemption instead of requiring payment in
money. Art. 1249. The payment of debts in money shall be in the currency
- stipulated, and if it is not
possible to deliver such currency, then in the currency which is the legal
If he had seen fit to do so, the officer could have required payment to be tender of the Philippines. xxx
made in lawful
money, and he undoubtedly, in accepting a check, placed himself in a 2
position where he could
be liable to the purchaser at the public auction if any damage had been the writ of execution and sale or as waiver of any legal remedies available to
suffered by the latter him] is
as a result of the medium in which payment was made. valid – Yes, it is valid.
-
-
Had he not made the reservation, estoppel might have operated against him
Validity of payment is not affected. The check as a medium of payment in since
commercial redemption is an implied admission of the regularity of the sale.
transaction is too firmly established by usage to permit of any doubt upon
this point at the -
present day.
In questioning the writ of execution and sale and at the same time
- redeeming his property,
Bautista was exercising alternative reliefs. The right of redemption is always
Here, although the private respondents did not file a redemption case, considered
against the compatible with ownership, and one who fails to obtain relief in the sense of
petitioners, it should be noted respondent NSC filed an Urgent Motion for absolute owner
Redemption dated may successfully assert the other right.
Feb 11, 1985, and Bautista filed an Urgent Motion (to Deposit Redemption
Money with QC Clerk Clarification
-

The decision does not sanction use of check for payment of obligations over
the objection
of the creditor.

The decision holds that a check may be used for the exercise of the right of
redemption,
the same being a right and not an obligation. The tender of a check is
sufficient to compel
redemption but is not itself a payment that relieves the redemptioner from his
liability to
pay the redemption price.

Thus, private respondents properly exercised their right of redemption.

However, they
remain liable for the payment of the redemption price.

3
Negotiable Instruments Case Digest: ​Caltex (Phils.) Inc. V. CA And the details of Mr. Angel's obligation against which Caltex proposed to apply
Security Bank And Trust Co. (1992) the time deposits

Security Bank rejected Caltex demand for payment bec. it failed to furnish a
G.R. No. 97753 August 10, 1992 copy of its agreement w/ Angel
Lessons Applicable: Requisites of negotiability to antedated and postdated
instruments (Negotiable Instrument Law) April 1983, the loan of Angel dela Cruz with Security Bank matured

FACTS: August 5, 1983: CTD were set-off w/ the matured loan

Security Bank and Trust Company (Security Bank), a commercial banking
institution, through its Sucat Branch issued 280 certificates of time deposit Caltex filed a complaint praying the bank to pay 1,120,000 plus 16% interest
(CTDs) in favor of Angel dela Cruz who deposited with Security Bank the
total amount of P1,120,000 CA affirmed RTC to dismiss complaint

Angel delivered the CTDs to Caltex for his purchase of fuel products ISSUE:

March 18, 1982: Angel informed Mr. Tiangco, the Sucat Branch Manager W/N the CTDs are negotiable
that he lost all CTDs, submitted the required Affidavit of Loss and received
the replacement W/N Caltex as holder in due course can rightfully recover on the CTDs

March 25, 1982: Angel dela Cruz negotiated and obtained a loan from
Security Bank in the amount of P875,000 and executed a notarized Deed of HELD: Petition is Denied and appealed decision is affirmed.
Assignment of Time Deposit
1. YES.
November, 1982: Mr. Aranas, Credit Manager of Caltex went to the Sucat Section 1 Act No. 2031, otherwise known as the Negotiable Instruments
branch to verify the CTDs declared lost by Angel Law, enumerates the requisites for an instrument to become negotiable, viz:

November 26, 1982: Security Bank received a letter from Caltex formally (a) It must be in writing and signed by the maker or drawer;
informing it of its possession of the CTDs in question and of its decision to (b) Must contain an unconditional promise or order to pay a sum certain in
pre-terminate the same. money;
(c) Must be payable on demand, or at a fixed or determinable future time;
December 8, 1982: Caltex was requested by Security Bank to furnish: (d) Must be payable to order or to bearer; and -check
(e) Where the instrument is addressed to a drawee, he must be named or
a copy of the document evidencing the guarantee agreement with Mr. Angel otherwise indicated therein with reasonable certainty.
dela Cruz The documents provide that the amounts deposited shall be repayable to the
depositor
 Art. 2096. A pledge shall not take effect against third persons if a description
depositor = bearer of the thing pledged and the date of the pledge do not appear in a public
instrument.
If it was really the intention of respondent bank to pay the amount to Angel Art. 1625. An assignment of credit, right or action shall produce no effect as
de la Cruz only, it could have with facility so expressed that fact in clear and against third persons, unless it appears in a public instrument, or the
categorical terms in the documents, instead of having the word "BEARER" instrument is recorded in the Registry of Property in case the assignment
stamped on the space provided for the name of the depositor in each CTD involves real property.

negotiability or non-negotiability of an instrument is determined from the

writing, that is, from the face of the instrument itself

2. NO.
although the CTDs are bearer instruments, a valid negotiation thereof for the
true purpose and agreement between it and De la Cruz, as ultimately
ascertained, requires both delivery and indorsement

CTDs were in reality delivered to it as a security for De la Cruz' purchases of

its fuel products

There was no negotiation in the sense of a transfer of the legal title to the
CTDs in favor of petitioner in which situation, for obvious reasons, mere
delivery of the bearer CTDs would have sufficed.

Where the holder has a lien on the instrument arising from contract, he is
deemed a holder for value to the extent of his lien.

As such holder of collateral security, he would be a pledgee but the

requirements therefor and the effects thereof, not being provided for by the
Negotiable Instruments Law, shall be governed by the Civil Code provisions
on pledge of incorporeal rights:

Art. 2095. Incorporeal rights, evidenced by negotiable instruments, . . . may

also be pledged. The instrument proving the right pledged shall be delivered
to the creditor, and if negotiable, must be indorsed.
G.R. No. 166018 therefor upon receipt of the securities.
June 4, 2014
THE HONGKONG AND SHANGHAI BANKING CORPORATION 3.
LIMITED-PHILIPPINE BRANCHES,
Petitioner, vs.COMMISSIONER OF INTERNAL REVENUE​, Respondent; Pursuant to the electronic messages of its investor-clients, HSBC purchased
x-----------------------x and paid
G.R. No. 167728 Documentary Stamp Tax (DST) from September to December 1997 and
THE HONGKONG AND SHANGHAI BANKING CORPORATION also from January to
LIMITED-PHILIPPINE BRANCHES, December 1998 amounting to P19,572,992.10 and P32,904,437.30,
Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent. respectively.
NATURE: Petitions for review on certiorari assailing the Decision and
Resolution of the CA. The 4.
respective Decisions in the said cases similarly reversed and set aside the
decisions of the CTA and BIR, thru its then Commissioner, issued BIR Ruling to the effect that
dismissed the petition of Petitioner HSBC. instructions or advises
FACTS: from abroad on the management of funds located in the Philippines which do
1. HSBC performs custodial services on behalf of its investor-clients with not involve
respect to their passive transfer of funds from abroad are not subject to DST. A documentary stamp
investments in the Philippines, particularly investments in shares of stocks in tax shall be
domestic imposed on any bill of exchange or order for payment purporting to be drawn
corporations. As a custodian bank, HSBC serves as the collection/payment in a foreign
agent. country but payable in the Philippines.
2. a.

HSBC’s investor-clients maintain Philippine peso and/or foreign currency b.

accounts, which are
managed by HSBC through instructions given through electronic messages. c.
The said
instructions are standard forms known in the banking industry as SWIFT, or 5.
"Society for 6.
Worldwide Interbank Financial Telecommunication." In purchasing shares of 7.
stock and other
investment in securities, the investor-clients would send electronic While the payor is residing outside the Philippines, he maintains a local and
messages from abroad foreign
instructing HSBC to debit their local or foreign currency accounts and to pay currency account in the Philippines from where he will draw the money
the purchase price intended to pay a
named recipient. The instruction or order to pay shall be made through an With the above BIR Ruling as its basis, HSBC filed on an administrative
electronic claim for the refund of
message. Consequently, there is no negotiable instrument to be made, allegedly representing erroneously paid DST to the BIR
signed or issued As its claims for refund were not acted upon by the BIR, HSBC subsequently
by the payee. brought the
Such electronic instructions by the non-resident payor cannot be considered matter to the CTA, which favored HSBC and ordered payment of refund or
as a transaction per issuance of tax
se considering that the same do not involve any transfer of funds from credit.
abroad or from the place However, the CA reversed decisions of the CTA and ruled that the electronic
where the instruction originates. Insofar as the local bank is concerned, such messages of
instruction could be HSBC’s investor-clients are subject to DST.
considered only as a memorandum and shall be entered as such in its books a.
of accounts. The
actual debiting of the payor’s account, local or foreign currency account in DST is levied on the exercise by persons of certain privileges conferred by
the Philippines, is the law for the creation,
actual transaction that should be properly entered as such. Under the revision, or termination of specific legal relationships through the execution
Documentary Stamp Tax of specific
Law, the mere withdrawal of money from a bank deposit, local or foreign
currency account, is not instruments, independently of the legal status of the transactions giving rise
subject to DST, unless the account so maintained is a current or checking thereto.
account, in which ISSUE: Whether or not the electronic messages are considered transactions
case, the issuance of the check or bank drafts is subject to the documentary pertaining to negotiable
stamp tax. instruments that warrant the payment of DST.
Likewise, the receipt of funds from another bank in the Philippines for
deposit to the payee’s HELD: NO.
account and thereafter upon instruction of the non-resident depositor-payor, The Court agrees with the CTA that the DST under Section 181 of the Tax
through an Code is levied on the
electronic message, the depository bank to debit his account and pay a acceptance or payment of "a bill of exchange purporting to be drawn in a
named recipient shall not foreign country but payable in
be subject to documentary stamp tax. It should be noted that the receipt of the Philippines" and that "a bill of exchange is an unconditional order in
funds from another writing addressed by one person
local bank in the Philippines by a local depository bank for the account of its to another, signed by the person giving it, requiring the person to whom it is
client residing addressed to pay on
abroad is part of its regular banking transaction which is not subject to demand or at a fixed or determinable future time a sum certain in money to
documentary stamp tax. order or to bearer."
The Court further agrees with the CTA that the electronic messages of or payment that will trigger the imposition of the DST under Section 181 of
HSBC’s investor-clients the Tax Code.
containing instructions to debit their respective local or foreign currency In these cases, the electronic messages received by HSBC from its
accounts in the Philippines and investor-clients abroad instructing
pay a certain named recipient also residing in the Philippines is not the the former to debit the latter's local and foreign currency accounts and to pay
transaction contemplated under the purchase price of
Section 181 of the Tax Code as such instructions are "parallel to an shares of stock or investment in securities do not properly qualify as either
automatic bank transfer of local presentment for acceptance
funds from a savings account to a checking account maintained by a or presentment for payment. There being neither presentment for
depositor in one bank." The Court acceptance nor presentment for
favorably adopts the finding of the CTA that the electronic messages "cannot payment, then there was no acceptance or payment that could have been
be considered negotiable subjected to DST to speak of.
instruments as they lack the feature of negotiability, which, is the ability to be WHEREFORE, the petitions are hereby GRANTED and the Decisions dated
transferred" and that the May 2, 2002 in CTA Case No. 6009 and
said electronic messages are "mere memoranda" of the transaction dated December 18, 2002 in CT A Case No. 5951 of the Court of Tax
consisting of the "actual debiting of Appeals are REINSTATED. SO ORDERED.
the [investor-client-payor’s] local or foreign currency account in the
Philippines" and "entered as such in
the books of account of the local bank," HSBC.
The instructions given through electronic messages that are subjected to
DST in these cases are not
negotiable instruments as they do not comply with the requisites of
negotiability under Section 1 of the
Negotiable Instruments Law. The electronic messages are not signed by the
investor-clients as
supposed drawers of a bill of exchange; they do not contain an unconditional
order to pay a sum certain
in money as the payment is supposed to come from a specific fund or
account of the investor-clients;
and, they are not payable to order or bearer but to a specifically designated
third party. Thus, the
electronic messages are not bills of exchange. As there was no bill of
exchange or order for the
payment drawn abroad and made payable here in the Philippines, there
could have been no acceptance
 G.R. No. 184458, et al.| January 14, 2015 After trial, the MeTC ruled in favour of the Spouses Chua. The decision was
​ RODRIGO RIVERA, Petitioner, vs. SPOUSES SALVADOR CHUA affirmed by both
AND VIOLETA S. the RTC and the CA.
CHUA, Respondents. ISSUE: Whether or not the Negotiable Instruments Law is applicable in the
case at hand
HELD: No, it is not. The subject promissory note is not a negotiable
FACTS: The parties to this case are long standing friends who have known instrument and hence,
each other since the provisions of the NIL do not apply to this case.
1973. On February of 1995, Rivera obtained a loan from Spouses Chua for Section 1 of the NIL requires the concurrence of the following elements to be
an amount of a negotiable
PhP120, 000.00, as evidenced by a promissory note, payable on December instrument: (a) It must be in writing and signed by the maker or drawer; (b)
31, 1995. Must contain an
In October 1998, Rivera, as payee, issued as partial payment for his loan, a unconditional promise or order to pay a sum certain in money; (c) Must be
check drawn payable on
against his current account with Phil. Commercial International Bank (PCIB) demand, or at a fixed or determinable future time; (d) Must be payable to
in the amount of order or to bearer;
PhP25, 000.00. In December 1998, the Spouses again received a check, and (e) Where the instrument is addressed to a drawee, he must be named
presumably issued or otherwise
by Rivera that was blank as to payee and amount. The check was issued in indicated therein with reasonable certainty.
the amount The Promissory Note in this case is made out to specific persons, herein
of P133,454.00 with "cash" as payee. Purportedly, both checks were partial respondents, the
payments for Spouses Chua, and not to order or to bearer, or to the order of the Spouses
Rivera’s loan. Chua as payees.
Upon presentment for payment, however, the two checks were dishonored However, even if Rivera’s Promissory Note is not a negotiable instrument
for the reason and therefore
"account closed." Despite repeatedly demanding payment from Rivera, the outside the coverage of Section 70 of the NIL which provides that
latter refused to presentment for payment
pay. As such, the Spouses filed a suit against him before the MeTC. For his is not necessary to charge the person liable on the instrument, Rivera is still
defense, in the liable under the
main, Rivera claimed that the Promissory Note was forged, and denied his terms of the Promissory Note that he issued.
indebtedness
thereunder. The spouses, on the other hand, submitted the testimony of an
NBI Document
Examiner who concluded that the signature on the promissory note was
indeed Rivera’s.
People of the Phils. v. Gilbert Reyes Wagas​, G.R. No. 157943,
September 4, 2013
Full Text

Facts: Gilbert Wagas ordered from Alberto Ligaray 200 bags of rice over the
telephone. As payment, Wagas issued a check in favor of Ligaray. When the
check was deposited it was dishonored due to insufficiency of funds. Ligaray
notified Wagas and demanded payment from the latter but Wagas refused
and failed to pay the amount, Ligaray filed a complaint for estafa before the
RTC. RTC convicted Wagas of estafa because the RTC believed that the
prosecution had proved that it was Wagas who issued the dishonored check,
despite the fact that Ligaray had never met Wagas in person. Hence, this
direct appeal.

Issue: Whether or not Wagas is guilty beyond reasonable doubt

Held: No. The Supreme Court acquitted Wagas. The check delivered to
Ligaray was made payable to cash. Under the Negotiable Instruments Law,
this type of check was payable to the bearer and could be negotiated by
mere delivery without the need of an indorsement. This rendered it highly
probable that Wagas had issued the check not to Ligaray, but to somebody
else like Cañada, his brother-in-law, who then negotiated it to
Ligaray.1wphi1 Relevantly, Ligaray confirmed that he did not himself see or
meet Wagas at the time of the transaction and thereafter, and expressly
stated that the person who signed for and received the stocks of rice was
Cañada.

It bears stressing that the accused, to be guilty of estafa as charged, must

have used the check in order to defraud the complainant. What the law
punishes is the fraud or deceit, not the mere issuance of the worthless
check. Wagas could not be held guilty of estafa simply because he had
issued the check used to defraud Ligaray. The proof of guilt must still clearly
show that it had been Wagas as the drawer who had defrauded Ligaray by
means of the check.