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Cayanan vs North Star

10 Oct 2011GR
172954Ponente: Villarama, Jr. J.Petitioner/s: Engr. Jose Cayanan , owner of a recruitment age

JEAC Intl Mgmt and Contractor ServicesRespondent: North Star International Travel

a travel agency
Sec 24: Presumption of ConsiderationFACTS:
North Star extended credit to Cayanan for air tickets of clients - P510,034.47, and for
payment to ViewSea Ventures of the amounts of $60,000 which came from respondent
General Manager

s (Virginia) personalaccount (ordered by Cayanan), and another $40,000 by telegraphic

transfer with $15,000 from petitioner.Cayanan then issued 3 checks drawn from
Republic Planters Bank (RPB) and 2 checks from PCIB.When drawn for payment, the checks
from PCIB amounting to 1.5M and 35,000 were dishonored forinsufficiency of funds while the
3 checks from RPB were dishonored due to a stop payment by Cayanan. Upondemand for
payment, Cayanan failed to settle.5 violations of BP 22 were filed by North Star in MeTC.
which found Cayanan Guilty. On Appeal, theRTC acquitted him. The CA, however,
held Cayanan civilly liable.The Supreme Court held that Cayanan
s defense that
there was no consideration for the issuance ofchecks could not hold as he has not presented
credible evidence to rebut presumption that the checks wereissued for a valuable
ISSUE/S:1. WON checks issued by Cayanan were for valuable consideration?2. WON
Cayanan is civilly liable to North Star for the value of the checks?HELD:1. Yes,
checks were issued for a valuable consideration.Cayanan has not presented credible
evidence to rebut resumption that checks were issued for avaluable consideration.
Contrary to petitioners claims that

North Star did not give any valuableconsideration for the checks since the US$85,000 was
taken from the personal dollar account ofVirginia and not the corporate funds of North Star,
the fact that petitioner himself specifically namedNorth Star as the payee of the checks is an
admission of his liability to North Star and not to VirginiaBalagtas. Also, his defense that
dollars sent to View Sea in Nigeria was Virginia

s own investment could not holdas she only remitted such money due to Cayanan

s request/ instructions

this he never denied. It washim who had business transactions with View Sea and not
Transaction between North Starand Cayanan was actually in the nature of a loan, and checks
were issued as payment of suchhence there was no absence of consideration for the issuance
of checks.

2. Yes, Cayanan is liable.

Having failed to fully settle his obligation (loan) under the checks, the appellate court was correct inholding
petitioner liable to pay the value of the five checks he issued in favor of North Star.
SC DECISION:Petition Denied. Cayanan liable.
No. 188363, February 27, 2013 FACTS:
On October 10, 2002, a check in the amount of P1,000,000.00 payable to "MateoMgt. Group
International" (MMGI) was presented for deposit and accepted atpetitioner's (Allied Bank) Kawit
Branch. The check, post-dated
"Oct. 9, 2003",
was drawnagainst the account of Marciano Silva, Jr. (Silva) with respondent BPI Bel-Air Branch.Upon
receipt, petitioner sent the check for clearing to respondent through thePhilippine Clearing
House Corporation (PCHC).The check was cleared by respondent and petitioner credited the
account of MMGI withP1,000,000.00. On Oc
tober 22, 2002, MMGIs account was closed and all the funds
therein were withdrawn. A month later, Silva discovered the debit of P1,000,000.00
from his account. In response to Silvas complaint, respondent credited his account with
the aforesaid sum.Petitioner filed a complaint before the Arbitration Committee, asserting
thatrespondent should solely bear the entire face value of the check due to its negligence infailing
to return the check to petitioner within the 24-hour reglementary period asprovided in Section
20.1of the Clearing House Rules and Regulations (CHRR) 2000. In itsAnswer with Counterclaims,
respondent charged petitioner with gross negligence foraccepting the post-
dated check in the first place. It contended that petitioners admitted
negligence was the sole and proximate cause of the loss.
: What does the Doctrine of Last Clear Chance enunciate?
: The doctrine of last clear chance, stated broadly, is that the negligence of theplaintiff does not
preclude a recovery for the negligence of the defendant where itappears that the defendant, by
exercising reasonable care and prudence, might have
avoided injurious consequences to the plaintiff notwithstanding the plaintiffs
negligence. The doctrine necessarily assumes negligence on the part of the defendantand
contributory negligence on the part of the plaintiff, and does not apply except uponthat assumption.
Stated differently, the antecedent negligence of the plaintiff does notpreclude him from
recovering damages caused by the supervening negligence of thedefendant, who had the last fair
chance to prevent the impending harm by the exerciseof due diligence. Moreover, in situations
where the doctrine has been applied, it was
defendants failure to exercise such ordinary care, havi
ng the last clear chance to avoidloss or injury, which was the proximate cause of the occurrence of
such loss or injury.
: Does the Doctrine of Last Clear Chance apply in this case?
: YES. In this case, the evidence clearly shows that the proximate cause of theunwarranted
encashment of the subject check was the negligence of respondent whocleared a post-dated check
sent to it thru the PCHC clearing facility without observing its
own verification procedure. As correctly found by the PCHC and upheld by the RTC, ifonly
respondent exercised ordinary care in the clearing process, it could have easilynoticed the glaring
defect upon seeing the date written on the face of the check "Oct. 9,2003". Respondent could have
then promptly returned the check and with the check
thus dishonored, petitioner would have not credited the amount thereof to the payees
account. Thus, notwithstanding the antecedent negligence of the petitioner in acceptingthe post-
dated check for deposit, it can seek reimbursement from respondent the
amount credited to the payees account covering the check.
Del Castillo,
A crossed check with the notation "account payee only" can only be deposited inthe named payees
account. It is ross nelience for a bank to inore this rule solely on the basis of a third partys oral
representations of havin a ood title thereto.BPI # a private domestic corporation sellinsteel
products. Pardo # BPIs President and ma$ority stockholder Interco # reular customer %y # son&in&law of its
ma$ority stockholder'(uitable # depository bank of Interco and of %y
BPI sold weldin electrodes to Interco, as evidenced by sales invoices. It is due on)arch *+ * * -for the
rst sales invoice and )ay ** ** for others/. It also provided thatInterco would pay interest at the rate of
0+1 per annum in case of delay. As payment forthe products, Interco issued 0 checks payable to the
order of BPI. 'ach check was crossedwith the notation 2account payee only3 and was drawn aainst
'(uitable. 4he records do not identify the sinatory for the checks, or e5plain how %y came inpossession
of these checks. 6e claimed that he had ood title thereto. 6e demanded the deposits in his
personal accounts in '(uitable. 4he bank did so relyin on %ys status as a valued client and as son&in&law of
Intercos ma$ority stockholder. BPI reminded Interco of the unpaid weldin electrodes, e5plainin that
its immediateneed for payment as it was e5periencin some nancial crisis of its own. It replied that it
hasalready issued 0 checks payable to BPI and drawn a ainst '(uitable, which was denied byBPI. 7ater
on it was discovered that it was %y, not BPI, who received the proceeds of 0checks. Interco nally paid
the value of 0 checks to BPI plus portion of accrued interests.Interco refused to pay entire accrued
interest on the round that it was not responsible forthe delay. 6ence, Pardo led a complaint for
dama es a ainst %y and '(uitable 8ankalle in that the 0 crossed checks, all payable to
order of BPI could be deposited and encashedby BPPI only.