G.R. No.

108555 December 20, 1994 paid upon presentation that is why it is perceived as a convenient
substitute for currency in commercial and financial transactions. The
RAMON TAN, Petitioner, v. THE HONORABLE COURT OF basis of the perception being confidence. Any practice that destroys
APPEALS and RIZAL COMMERCIAL BANKING that confidence will impair the usefulness of the check as a currency
CORPORATION, Respondents. substitute and create havoc in trade circles and the banking
community.
FACTS:
Now, what was presented for deposit in the instant cases was not
just an ordinary check but a cashier’s check payable to the account
Petitioner Ramon Tan, a trader-businessman and community leader
of the depositor himself. A cashier’s check is a primary obligation of
in Puerto Princesa, had maintained since 1976 Current Account No.
the issuing bank and accepted in advance by its mere issuance. By
109058068 with respondent bank’s Binondo branch. To avoid
its very nature, a cashier’s check is the bank’s order to pay drawn
carrying cash while enroute to Manila, he secured a Cashier’s Check
upon itself, committing in effect its total resources, integrity and
No. L 406000126 from the PCIB, Puerto Princesa branch, in the
honor behind the check. A cashier’s check by its peculiar character
amount of 30,000.00 Pesos, payable to his order. He deposited the
and general use in the commercial world is regarded substantially to
check in his account with RCBC Binondo. On the same day, RCBC
be as good as the money which it represents. In this case, therefore,
erroneously sent the same cashier’s check for clearing to the Central
PCIB by issuing the check created an unconditional credit in favor of
Bank which was returned for having been “missent” or “misrouted.”
any collecting bank.
The next day, RCBC debited the amount covered by the same
cashier’s check from the account of the petitioner. Respondent bank
at this time had not informed the petitioner of its action which the All these considered, petitioner’s reliance on the layman’s perception
latter claims he learned of only 42 days after. that a cashier’s check is as good as cash is not entirely misplaced,
as it is rooted in practice, tradition, and principle. We see no reason
thus why this so-called discretion was not exercised in favor of
Relying on the common knowledge that a cashier’s check was as
petitioner, especially since PCIB and RCBC are members of the
good as cash, that the usual banking practice that local checks are
same clearing house group relying on each other’s solvency. RCBC
cleared within 3 working days and regional checks within 7 working
could surely rely on the solvency of PCIB when the latter issued its
days, and the fact that the cashier’s check was accepted, petitioner
cashier’s check.
issued 2 personal checks. Upon presentment of the issued checks,
both checks were dishonored due to insufficiency of funds.
G.R. No. 211564, November 20, 2017
ISSUE:
BENJAMIN EVANGELISTA, Petitioner, V. SCREENEX, INC.,
REPRESENTED BY ALEXANDER G, YU, Respondent.
Whether the petitioner’s reliance that a cashier’s check is good as
cash is correct.
FACT: Evangelista obtained a loan from respondent Screenex, Inc.
which issued two (2) checks to him. The first check was a UCPB
RULING:
check for ₱l,000,000 and the other one is a China Banking
Corporation check for ₱500,000. There were also vouchers of
An ordinary check is not a mere undertaking to pay an amount of
money. There is an element of certainty or assurance that it will be Screenex that were signed by the accused evidencing that he
received the 2 checks in acceptance of the loan granted to him. As
security for the payment of the loan, he gave two 2 open-dated
checks which were both pay to the order of Screenex, Inc. From the
time the checks were issued, they were held in safe keeping together
with the other documents and papers of the company by Philip
Gotuaco, Sr., father-in-law of respondent Alexander Yu, until the
former's death. Before the checks were deposited, there was a
personal demand from the family for Evangelista to settle the loan
and likewise a demand letter sent by the family lawyer. Petitioner
was then charged with violation of BP Blg. 22 filed with the MeTC of
Makati City. The MeTC, ruling that the prosecution failed to prove the
third element acquitted him of the criminal charges, but declared
liable for the corresponding civil obligation. The R TC dismissed the
appeal and affirmed the MeTC decision in toto. On appeal to the CA,
the appellate court affirmed the decision of the RTC.
ISSUE: W/N the CA erred in ordering the accused to pay his alleged
civil obligation to complainant
HELD: The Court held in the affirmative. In BP 22 cases, the action
for the corresponding civil obligation is deemed instituted with the
criminal action. The criminal action for violation of BP 22 necessarily
includes the corresponding civil action, and no reservation to file
such civil action separately shall be allowed or recognized. In
addition, the cause of action based on a check is reckoned from the
date indicated on the check. If the check is undated, the cause of
action is reckoned from the date of the issuance of the check. No
written extrajudicial or judicial demand was shown to have been
made within 10 years which could have tolled the period.
Prescription has indeed set in. We therefore have no other recourse
but to grant the instant petition on the ground of prescription. Even if
that defense was belatedly raised before the RTC for the first time on
appeal from the ruling of the MeTC, we nonetheless dismiss the
complaint by applying Section 1 of Rule 9 of the Rules of Court.
Granting that petitioner had never encashed the check, his failure to
do so for more than ten (10) years resulted in the impairment of the
check through his unreasonable delay. While it is true that the
delivery of a check produces the effect of payment only when it is
cashed pursuant to Art. 1249 of the Civil Code, the rule is otherwise
if the debtor is prejudiced by the creditor's unreasonable delay in
presentment. Petitioner is considered discharged from his obligation
to pay and can no longer be pronounced civilly liable for the amounts
indicated thereon.
G.R. No. 157309 March 28, 2008
Velasquez vs Solidbank Corporation
Facts: Petitioner is engaged in the export business operating under
the name Wilderness Trading. Respondent is a domestic banking
corporation organized under Philippine laws. The case arose out of a
business transaction for the sale of dried sea cucumber for export to
South Korea between Wilderness Trading, as seller, and Goldwell
Trading of Pusan, South Korea, as buyer. To facilitate payment of
the products, Goldwell Trading opened a letter of credit in favor of
Wilderness Trading in the amount of US$87,500.00 with the Bank of
Seoul, Pusan, Korea. On November 12, 1992, petitioner applied for
credit accommodation with respondent bank for pre-shipment
financing. The credit accommodation was granted. Petitioner was
successful in his first two export transactions both drawn on the letter
of credit. The third export shipment, however, yielded a different
result. On February 22, 1993, petitioner submitted to respondent the
necessary documents for his third shipment. Wanting to be paid the
value of the shipment in advance, petitioner negotiated for a
documentary sight draft to be drawn on the letter of credit,
chargeable to the account of Bank of Seoul. The sight draft
represented the value of the shipment in the amount of
US$59,640.00. As a condition for the issuance of the sight draft,
petitioner executed a letter of undertaking in favor of respondent.
Respondent failed to collect on the sight draft as it was dishonored
by non-acceptance by the Bank of Seoul. The reasons given for the
dishonor were late shipment, forged inspection certificate, and
absence of countersignature of the negotiating bank on the
inspection certificate. Goldwell Trading likewise issued a stop
payment order on the sight draft because most of the bags of dried
sea cucumber exported by petitioner contained soil.
Issue: Whether or not petitioner is liable for the sight draft.
Held: No. Admittedly, petitioner was discharged from liability under
the sight draft when respondent failed to protest it for non-
acceptance by the Bank of Seoul. A sight draft made payable outside
the Philippines is a foreign bill of exchange. When a foreign bill is
dishonored by non-acceptance or non-payment, protest is necessary
to hold the drawer and indorsers liable. Verily, respondents failure to
protest the non-acceptance of the sight draft resulted in the
discharge of petitioner from liability under the instrument.
Section 152 of the NIL is explicit:
Section 152. In what cases protest necessary. Where a foreign
bill appearing on its face to be such is dishonored by non-
acceptance, it must be duly protested for non-acceptance, and
where such a bill which has not been previously dishonored by non-
acceptance, is dishonored by non-payment, it must be duly protested
for non-payment. If it is not so protested, the drawer and indorsers
are discharged. Where a bill does not appear on its face to be a
foreign bill, protest thereof in case of dishonor is unnecessary.
Petitioner, however, can still be made liable under the letter of
undertaking. It bears stressing that it is a separate contract from the
sight draft. The liability of petitioner under the letter of undertaking is
direct and primary. It is independent from his liability under the sight
draft. Liability subsists on it even if the sight draft was dishonored for
nonacceptance or non-payment.
Respondent need not prove that petitioner violated the provisions of
the letter of credit in order to be held liable under the letter of
undertaking. Parties are bound to fulfill what has been expressly
stipulated in the contract. Petitioners liability under the letter of
undertaking is clear. He is liable to respondent if the sight draft is not
accepted by the Bank of Seoul. Mere non-acceptance of the sight
draft is sufficient for liability to attach. Here, the sight draft was
dishonored for non-acceptance. The non-acceptance of the sight
draft triggered petitioners liability under the letter of undertaking.
G.R. No. 184458 January 14, 2015
RODRIGO RIVERA v. SPS. SALVADOR CHUA AND S. VIOLETA
CHUA
FACTS:
The parties were friends of long standing having known each other
since 1973. In February 1995, Rivera obtained a loan from the
Spouses Chua, in the tune of P120,000.00 embodied in a promissory
note with stipulations that failure on the part of Rivera to pay the
amount on December 31, 1995, he agrees to pay 5% interest
monthly from the date of default (January 1, 1996). Three years have
passed from the maturity date, when Rivera issued two (2) checks in
favor of Chua as payment for the loan, which, upon presentment,
were dishonored for the reason “account closed.” In their collection
suit, Spouses Chua alleged that they have repeatedly demanded
payment from Rivera to no avail. In his Answer, Rivera claimed
forgery of the subject Promissory Note and denied his indebtedness
thereunder. From the MeTC to the CA, the monetary claim of
Spouses Chua was sustained.
ISSUE:
Whether or not a demand from Sps. Chua is needed to make Rivera
liable.
RULING:
No, a demand from Sps. Chua is not needed to make Rivera liable.
Demand is no longer necessary because the law is explicit that when
the debtor fails to pay upon maturity date, when the obligation is due
and demandable, he therefore incurs delay. Art. 1169 of the NCC
states, “Those obliged to deliver or to do something incur in delay
from the time the obligee judicially or extrajudicially demands from
them the fulfillment of their obligation. However, the demand by the
creditor shall not be necessary in order that delay may exist: 1)
When the obligation or the law expressly so declare xxx.”
There are four instances when demand is not necessary to constitute
the debtor in default: (1) when there is an express stipulation to that
effect; (2) where the law so provides; (3) when the period is the
controlling motive or the principal inducement for the creation of the
obligation; and (4) where demand would be useless.

In the first two paragraphs, it is not sufficient that the law or

obligation fixes a date for performance; it must further state
expressly that after the period lapses, default will commence. The
clause in the Promissory Note containing the stipulation of interest
which expressly requires Rivera to pay 5% monthly interest from the
date of default until the entire obligation is fully paid. It is evident that
the maturity of the obligation on a date certain, December 31, 1995,
will give rise to the obligation to pay interest. The date of default
under the Promissory Note is 1 January 1996, the day following 31
December 1995, the due date of the obligation. On that date, Rivera
became liable for the stipulated interest which the Promissory Note
says is equivalent to 5% a month.

In sum, until 31 December 1995, demand was not necessary before

Rivera could be held liable for the principal amount of P120,000.00.
Thereafter, on 1 January 1996, upon default, Rivera became liable to
pay the Spouses Chua damages, in the form of stipulated interest.