Bank of the Philippine Islands v. Roxas
REITERATIONFacts
The Antecedents: Respondent Gregorio C. Roxas, a trader, delivered stocks of vegetable oil to spouses Rodrigo and Marissa Cawili. The spouses issued a personal check for ₱348,805.50, which was dishonored. They assured respondent that they would replace it with a cashier's check from Bank of the Philippine Islands (BPI), petitioner. On March 31, 1993, respondent and Rodrigo Cawili went to BPI's Shaw Boulevard branch, where BPI branch manager Elma Capistrano instructed teller Lita Sagun to prepare BPI Cashier's Check No. 14428 for ₱348,805.50, drawn against Marissa Cawili's account, payable to respondent. Rodrigo handed the check to respondent in the presence of Elma. The following day, April 1, 1993, respondent attempted to encash the cashier's check, but it was dishonored because Marissa's account was closed on that date. Despite respondent's insistence, BPI officers refused to encash the check and attempted to retrieve it. Respondent deposited the check into his account at Citytrust, where it was dishonored for "Account Closed." Procedural History: Respondent filed a complaint for sum of money against BPI, seeking payment of the check amount, damages, and costs. BPI denied liability, claiming good faith issuance by mistake, lack of consideration for dishonor, and that respondent's remedy was against Rodrigo Cawili. BPI filed a third-party complaint against the spouses Cawili, who were declared in default. The Regional Trial Court (RTC) ruled in favor of respondent, ordering BPI to pay the face value of the check with legal interest, moral and exemplary damages, attorney's fees, and costs. The RTC also ordered the spouses Cawili to indemnify BPI for any amount it paid to respondent. The Court of Appeals affirmed the RTC's decision. The Petition: BPI filed a Petition for Review on Certiorari, assailing the Court of Appeals' decision, primarily arguing that respondent was not a holder in due course and that BPI was not liable for the cashier's check.
Issue(s)
Whether respondent is a holder in due course. Whether petitioner BPI is liable to respondent for the amount of the cashier's check.
Ruling
The petition is DENIED. The assailed Decision of the Court of Appeals is AFFIRMED. Costs against petitioner.
Ratio Decidendi
On the issue of whether respondent is a holder in due course: The Court affirmed the Court of Appeals' conclusion that respondent is a holder in due course. Section 52 of the Negotiable Instruments Law presumes every holder to be a holder in due course, placing the onus probandi on the party claiming otherwise. Petitioner contended that the element of "value" was lacking. However, Section 25 of the same law defines value as any consideration sufficient to support a simple contract, and an antecedent or pre-existing debt constitutes value. The Court found no dispute that respondent received the cashier's check as payment for the vegetable oil he sold to the spouses Cawili. The fact that Rodrigo Cawili purchased the check from BPI did not negate respondent's status as a holder for value, as it was delivered to him as payment for his goods. Therefore, respondent met the conditions of a holder in due course. On the issue of whether petitioner BPI is liable to respondent for the amount of the cashier's check: The Court held that BPI is liable to respondent. The Court emphasized that a cashier's check is the bank's own check and can be treated as a promissory note with the bank as the maker. It constitutes the primary obligation of the bank which issues it and is a written promise to pay upon demand. Citing established jurisprudence, the Court noted the well-known practice in the business sector that a cashier's check is deemed as cash because its mere issuance is considered acceptance thereof. Consequently, BPI became liable to respondent from the moment it issued the cashier's check. Since the check was accepted by respondent without any condition, BPI should have paid it upon presentment.
Main Doctrine
A cashier's check is the bank's own check and constitutes a written promise to pay upon demand, making the issuing bank primarily liable from the moment of issuance. The mere issuance of a cashier's check is considered acceptance thereof, and it is treated as cash in the business sector.