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Issue: (1) Whether or not the Gueco spouses should replace the check they paid to
the bank after it became stale. (2) Whether or not the Gueco spouses are entitled for damages
arising from fraud by ICB. (3) Whether or not there was an agreement with the execution of the
joint of motion to dismiss as a condition for the compromise agreement.
Ruling: (1) Yes, the delivery of the manager’s check did not constitute payment. The original
obligation to pay still exists. ICB held on the check and refused to encash because of the
controversy surrounding the signing of the joint of motion to dismiss. (2) No. The Court failed to
see how the act of the petitioner bank in requiring the respondent to sign the joint of motion to
dismiss could constitute as fraud. Petitioner may have been remiss in informing Dr. Gueco that
the signing of a joint motion to dismiss is a standard operating procedure of petitioner bank but
this cannot be a prejudiced. (3) No. There is no factual finding that the compromise agreement
included the condition of the signing of a joint motion to dismiss. Petitioner has the burden of
evidence to prove his claim and the petitioner failed to do.
Reasoning: A stale check is one which has not been presented for payment within reasonable
time because a check should be presented for payment on time. The stale check is valueless and
should not be paid. A manager’s check is involved in the case which is a bank’s own check.
Failure to present for payment within a reasonable time will result to the discharge to loss caused
by delay. The failure to present on time does not wipe out the fulfillment of obligation. Fraud has
been defined as the deliberate intention to cause damage or prejudice. It is the voluntary
execution of a wrongful act, or a willful omission, knowing and intending the effects arise from
such act or omission. In accordance with Article 1170 of the Civil Code, fraud is the deliberate
and intentional evasion of the normal fulfillment of obligation. The court fails to see how the act
of the petitioner bank in requiring the respondent to sign the joint of motion to dismiss could
constitute as fraud. The joint of motion to dismiss cannot in any way have prejudiced Dr. Gueco.
The motion to dismiss was in fact also for the benefit of Dr. Gueco.