GR 157833; (October, 2007) (Digest)
G.R. No. 157833; October 15, 2007
BANK OF THE PHILIPPINE ISLANDS, Petitioner, vs. GREGORIO C. ROXAS, Respondent.
FACTS
Respondent Gregorio Roxas delivered vegetable oil to spouses Cawili, who issued a personal check as payment. The check was dishonored. The spouses assured Roxas they would replace it with a cashier’s check from petitioner Bank of the Philippine Islands (BPI). On March 31, 1993, Roxas and Rodrigo Cawili went to a BPI branch where the manager instructed a teller to prepare Cashier’s Check No. 14428, drawn against Marissa Cawili’s account and payable to Roxas. Rodrigo handed the check to Roxas in the manager’s presence.
The following day, Roxas returned to encash the cashier’s check, but BPI dishonored it, informing him that Marissa Cawili’s account had been closed. The bank officers refused payment and tried to retrieve the check. Roxas later deposited the check in his own bank account, but it was again dishonored with the notation “Account Closed.” Roxas filed a complaint for sum of money against BPI.
ISSUE
Whether respondent Gregorio Roxas is a holder in due course of the cashier’s check and whether petitioner BPI is liable for its amount.
RULING
Yes, Roxas is a holder in due course, and BPI is liable. Under Section 52 of the Negotiable Instruments Law, a holder in due course is presumed. Petitioner failed to rebut this presumption, particularly contesting the element of “value.” Section 25 defines value as any consideration sufficient to support a simple contract, including an antecedent debt. Roxas received the cashier’s check as payment for the vegetable oil he sold to the Cawilis, constituting value. The fact that Rodrigo Cawili purchased the check from the bank does not negate Roxas’s status as a holder for value, as the check was delivered to him for a pre-existing obligation.
Moreover, a cashier’s check is the bank’s own check, akin to a promissory note with the bank as maker. It represents the primary obligation of the issuing bank, constituting a written promise to pay upon demand. The Court has recognized the well-accepted business practice that a cashier’s check is deemed as cash, and its mere issuance is considered acceptance. Consequently, BPI became liable to Roxas upon issuing the check. Having issued it unconditionally, BPI was obligated to pay upon presentment. The Court of Appeals’ decision affirming the trial court’s judgment ordering BPI to pay Roxas the face value of the check with damages was upheld. The petition was denied.