121 Travel-On vs CA, L-56169, June 26 1992

Facts: Petitioner was a travel agency involved in ticket sales on a commission as

is for and on behalf of different airline companies. Miranda has a
volving credit line with the company. He procured tickets on behalf of others and derived commissions from it.

Petitioner filed a collection suit against Miranda for the unpaid amount of
six checks. Petitioner alleged that Miranda procured tickets from them which he paid with cash and checks but the
checks were dishonored upon resentment to the bank. This was being refuted by Miranda by saying
that he actually paid for his obligations, even in the excess. He argued
that the checks were for accommodation purposes only. The company needed to show to its Board of Directors that
its accounts receivable was in good standing. The RTC and CA held Miranda not to be liable.

Issue: WHETHER OR NOT there’s a facie presumption that a check was issued for valuable consideration

Ruling: Reliance by the lower and appellate court on the company’s financial statements were wrong, to see if
Miranda was liable or not. This financial statements were actually not updated to show that there was indebtedness
on the part of Miranda. The best evidence that the courts should have looked at were the checks itself. There is a
prima facie presumption that a check was issued for valuable consideration and the provision puts the burden upon
the drawer to disprove this presumption. Miranda was unable to relieve himself of this burden.

Only clear and convincing evidence and not mere self-serving evidence of
drawer can rebut this presumption. The company was entitled to the
benefit conferred by the statutory provision. Miranda failed to show that the checks weren’t issued for any valuable
consideration. The checks were
clear by stating that the company was the payee and not a mere
accommodated party. And also, notice was given to the fact that the
checks were issued after a written demand by the company regarding Miranda’s unpaid liabilities.

Alan A Gultia