LIM VS.

SABAN
G.R. No. 163720; December 16, 2004
Ponente: J. TINGA

FACTS:

Under an Agency Agreement, Ybañez authorized Saban to look for a buyer of the lot for Two Hundred
Thousand Pesos (P200,000.00) and to mark up the selling price to include the amounts needed for
payment of taxes, transfer of title and other expenses incident to the sale, as well as Saban's commission
for the sale. 

Through Saban's efforts, Ybañez and his wife were able to sell the lot to the petitioner Genevieve Lim
(Lim) and the spouses Benjamin and Lourdes Lim (the Spouses Lim) on March 10, 1994. The price of the
lot as indicated in the Deed of Absolute Sale is Two Hundred Thousand Pesos (P200,000.00).  It appears,
however, that the vendees agreed to purchase the lot at the price of Six Hundred Thousand Pesos
(P600,000.00), inclusive of taxes and other incidental expenses of the sale.

After the sale, Lim remitted to Saban the amounts of P113,257 for payment of taxes due on the
transaction as well as P50,000.00 as broker's commission. Lim also issued in the name of Saban four
postdated checks in the aggregate amount of P236,743.00.

Subsequently, Ybañez sent a letter dated June 10, 1994 addressed to Lim. In the letter Ybañez asked Lim
to cancel all the checks issued by her in Saban's favor and to "extend another partial payment" for the
lot in his (Ybañez's) favor. 

After the four checks in his favor were dishonored upon presentment, Saban filed a complaint for
collection of sum of money and damages against Ybañez and Lim
Saban alleged that Ybañez told Lim that he (Saban) was not entitled to any commission for the sale since
he concealed the actual selling price of the lot from Ybañez and because he was not a licensed real
estate broker. Ybañez was able to convince Lim to cancel all four checks.

In his Answer, Ybañez claimed that Saban was not entitled to any commission because he concealed the
actual selling price from him and because he was not a licensed real estate broker.

ISSUE:

Whether or not Saban is entitled to receive his commission from the sale.

RULING:

The Supreme Court held that to deprive Saban of his commission subsequent to the sale which
was consummated through his efforts would be a breach of his contract of agency with Ybañez which
expressly states that Saban would be entitled to any excess in the purchase price after deducting the
P200,000.00 due to Ybañez and the transfer taxes and other incidental expenses of the sale.
          Moreover, the Court has already decided in earlier cases that would be in the height of injustice to
permit the principal to terminate the contract of agency to the prejudice of the broker when he had
already reaped the benefits of the broker's efforts.
ALEJANDRO DE LEON vs. CARMENCITA RODRIGUEZ
G.R. No. 202658; June 17, 2019

FACTS:
Petitioner De Leon executed a promissory note in favor of respondent Rodriguez. Failure of
petitioner in fulfilling his obligation caused the institution of an action for a claim of sum of
money by respondent with the RTC of Mandaluyong. In his answer, petitioner made an
affirmative defense claiming that he did not receive any valuable consideration therefrom, and
that the amount specified in the instrument was supposed respondent’s share of the damages
he may receive from a case he filed, if ruled in his favor, against Citibank. Respondent
controverted by maintaining that the amount was actually a payment for the damages caused
by the petitioner. In its decision, RTC held in favor of the petitioner on the grounds of lack of
consideration and that the promissory note was actually a contract between the parties subject
to a suspensive condition providing that if the case filed against Citibank will be ruled in favor of
the petitioner, which did not happen. But on appeal, RTC’s decision was reversed for the reason
that petitioner failed to present evidence in his contention for lack of consideration, and that
such claim was not an effective denial, but rather a clear admission of the existence of the
promissory note.

ISSUE:
Whether or not petitioner is liable to respondent under the promissory note.

RULING:
Yes, the petitioner is liable under the promissory note. Under the Negotiable Instruments Law, a
promissory note is deemed prima facie to have been issued for valuable consideration; every
person whose signature appears thereon to have become a party thereto for value; if there is
absence or failure of consideration, it may be raised as a defense against any person who is not
a holder in due course. In the present case, petitioner argues that he did not receive any value
for the promissory note as respondent did not give him any money, but this is on the mistaken
assumption that value only pertains to money. Therefore, petitioner is liable to respondent
under the promissory note.
LORETO DE LA VICTORIA vs. HON. JOSE P. BURGOS and RAUL H. SESBRENO
G.R. No. 111190; June 27, 1995
Ponente: J. BELLOSILLO

FACTS:

Raul Sesbreno filed a complaint for damages against Assistant City Fiscal Bienvenido Mabanto before the
RTC of Cebu City. After trial, judgment was rendered ordering Mabanto to pay Sesbreno P11,000. The
decision having become final and executory, the trial court ordered its execution upon Sesbreno’s
motion. The writ of execution was issued despite Mabanto’s objection. A notice of garnishment was
served upon Loreto de la Victoria as City Fiscal of Mandaue City where Mabanto was then detailed. De la
Victoria moved to quash the notice of garnishment claiming that he was not in possession of any money,
funds, etc. belonging to Mabanto until delivered to him, and as such are still public funds which could
not be subject of garnishment.

ISSUE:

Whether or not the checks subject of garnishment belong to Mabanto or whether they still belong to the
government.

RULING:

Under Section 16 of the Negotiable Instruments Law, every contract on a negotiable instrument is
incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. As
ordinarily understood, delivery means the transfer of the possession of the instrument by the maker or
drawer with the intent to transfer title to the payee and recognize him as the holder thereof. Herein, the
salary check of a government officer or employee does not belong to him before it is physically delivered
to him. Inasmuch as said checks had not yet been delivered to Mabanto, they did not belong to him and
still had the character of public funds. As a necessary consequence of being public fund, the checks may
not be garnished to satisfy the judgment.
DEVELOPMENT BANK OF RIZAL vs. SIMA WEI
G.R. No. 85419; 219 SCRA 736
Ponente: J. CAMPOS JR.

FACTS:

Respondent Sima Wei executed and delivered to petitioner Bank a promissory note engaging to pay the petitioner
Bank or order the amount of P1,820,000.00.  Sima Wei subsequently issued two crossed checks payable to
petitioner Bank drawn against China Banking Corporation in full settlement of the drawer's account evidenced by
the promissory note.  These two checks however were not delivered to the petitioner-payee or to any of its
authorized representatives but instead came into the possession of respondent Lee Kian Huat, who deposited the
checks without the petitioner-payee's endorsement to the account of respondent Plastic Corporation with
Producers Bank.  Inspite of the fact that the checks were crossed and payable to petitioner Bank and bore no
endorsement of the latter, the Branch Manager of Producers Bank authorized the acceptance of the checks for
deposit and credited them to the account of said Plastic Corporation.

ISSUE:
Whether petitioner Bank has a cause of action against Sima Wei for the undelivered checks.

RULING:
No.  A negotiable instrument must be delivered to the payee in order to evidence its existence as a binding
contract.  Section 16 of the NIL provides that every contract on a negotiable instrument is incomplete and
revocable until delivery of the instrument for the purpose of giving effect thereto.  Thus, the payee of a negotiable
instrument acquires no interest with respect thereto until its delivery to him.  Without the initial delivery of the
instrument from the drawer to the payee, there can be no liability on the instrument.   Petitioner however has a
right of action against Sima Wei for the balance due on the promissory note.