RIVERA VS.

CHUA o (b) Must contain an unconditional promise or order to pay a sum

G.R. No. 184458 | Perez | January 14, 2015 | Page 10 certain in money;
o (c) Must be payable on demand, or at a fixed or determinable
FACTS: future time;
 Rivera and Salvador are kumpadres, the former being the godfather of the o (d) Must be payable to order or to bearer; and
Sps. Chua’s son. o (e) Where the instrument is addressed to a drawee, he must be
 Feb. 24, 1995: Rivera obtained a loan from the Spouses Chua in the amount named or otherwise indicated therein with reasonable certainty.
of P120,000, evidenced by a promissory note1 payable on Dec. 31, 1995.  Section 184 of the NIL defines negotiable promissory note as: “a negotiable
o In the promissory note, Rivera agreed to pay 5% interest monthly promissory note within the meaning of this Act is an unconditional promise
upon failure to pay P120,000 on Dec. 31, 1995. in writing made by one person to another, signed by the maker, engaging to
 In Oct. 1998, Rivera, as partial payment for the loan, issued and delivered to pay on demand, or at a fixed or determinable future time, a sum certain in
the Sps. Chua, as payee, a check, dated 30 Dec. 1998, drawn against money to order or to bearer. Where a note is drawn to the maker’s own
Rivera’s current account with the Philippine Commercial International Bank order, it is not complete until indorsed by him.”
(PCIB) in the amount of P25,000.  IN THIS CASE, the Promissory Note is made out to specific persons, herein
 In Dec. 1998, the Spouses Chua received another check presumably issued respondents, the Spouses Chua, and not to order or to bearer, or to the
by Rivera, likewise drawn against Rivera’s PCIB current account, duly order of the Spouses Chua as payees.
signed and dated, but blank as to payee and amount. This check was issued
in the amount of P133,454.00 with “cash” as payee. #2: W/N RIVERA IS STILL LIABLE UNDER THE PROMISSORY NOTE DESPITE IT
 Upon presentment for payment, the two checks were dishonored for the NOT BEING A NEGOTIABLE INSTRUMENT AND THUS OUTSIDE COVERAGE OF
reason “account closed.” SEC. 70 OF THE NIL – YES
 As of 31 May 1999, the amount due the Spouses Chua was pegged at  Art. 1169 of the Civil Code explicitly provides that demand is not necessary
P366,000.00 covering the principal of P120,000.00 plus five percent (5%) to constitute the debtor in default when the obligation or law expressly so
interest per month from Jan. 1, 1996 to May 31,1999. declare.
 Spouses Chua alleged that they have repeatedly demanded payment from  IN THIS CASE, the promissory note expressly requires the debtor (Rivera)
Rivera to no avail. Because of this, Sps. Chua were constrained to file a suit to pay a 5% monthly interest from the “date of default” until the entire
against Rivera before the MeTC. obligation is fully paid for.
 For his defense, Rivera claimed forgery of the subject Promissory Note and o The parties agreed that the maturity of the obligation at a date
denied his indebtedness thereunder. certain, Dec. 31, 1995, will give rise to the obligation to pay interest.
 MeTC: ruled in favor of Sps. Chua. RTC and CA affirmed. o The Promissory Note expressly provided that after Dec. 31, 1995,
default commences and the stipulation on payment of interest
ISSUE #1: W/N RIVERA’S PROMISSORY NOTE IS A NEGOTIABLE INSTRUMENT starts.
– NO
 Rivera argues that assuming the Promissory Note is valid, demand was still #3: W/N THE PROMISSORY NOTE IS VALID – YES
necessary to charge him liable thereunder. He argued it was an error to  Rivera had the burden of proving the material allegations of forgery which he
apply Sec. 70 of the Negotiable Instruments Law which states that sets up in his Answer.
presentment for payment is not necessary to charge the person primarily  In this case, Rivera’s bare assertion is unsubstantiated and directly disputed
liable. by the testimony of a handwriting expert from the NBI.
 Sec. 1 of the NIL requires the concurrence of the following elements to be a
negotiable instrument:
o (a) It must be in writing and signed by the maker or drawer; PETITION DENIED.

1
PROMISSORY NOTE

120,000.00
FOR VALUE RECEIVED, I, RODRIGO RIVERA promise to pay spouses SALVADOR C. CHUA and VIOLETA SY CHUA, the sum of One Hundred Twenty
Thousand Philippine Currency (P120,000.00) on December 31, 1995. It is agreed and understood that failure on my part to pay the amount of
(P120,000.00) One Hundred Twenty Thousand Pesos on December 31, 1995. ( sic) I agree to pay the sum equivalent to FIVE PERCENT (5%) interest
monthly from the date of default until the entire obligation is fully paid for.

Should this note be referred to a lawyer for collection, I agree to pay the further sum equivalent to twenty percent (20%) of the total amount due and
payable as and for attorney’s fees which in no case shall be less than P5,000.00 and to pay in addition the cost of suit and other incidental litigation
expense.

Any action which may arise in connection with this note shall be brought in the proper Court of the City of Manila. Manila, February 24, 1995[.]

(SGD.) RODRIGO RIVERA