G.R. No. 172954 ; October 5, 2011
ENGR. JOSE E. CAYANAN, Petitioner, vs. NORTH STAR INTERNATIONAL TRAVEL, INC., Respondent.

FACTS

Petitioner Engr. Jose E. Cayanan, owner/general manager of a recruitment agency, was a client of respondent North Star International Travel, Inc., a travel agency. On March 17, 1994, Virginia Balagtas, North Star’s General Manager, upon petitioner’s instruction, sent US$60,000 from her personal Citibank account to View Sea Ventures Ltd. in Nigeria. On March 29, 1994, she sent another US$40,000, of which US$15,000 came from petitioner. North Star also extended credit to petitioner for his clients’ airplane tickets, with the total indebtedness reaching ₱510,035.47. To cover these obligations, petitioner issued five postdated checks to North Star. When presented for payment, two checks were dishonored for insufficiency of funds and three were dishonored due to a stop payment order from petitioner. After demand and failure to pay, North Star filed Criminal Case Nos. 166549-53 for violation of Batas Pambansa Blg. 22 (Bouncing Checks Law) before the Metropolitan Trial Court (MeTC) of Makati City. The MeTC found petitioner guilty and ordered him to indemnify North Star. On appeal, the Regional Trial Court (RTC) acquitted petitioner, finding the checks were presented beyond the 90-day period required under B.P. 22, and held there was no basis for civil liability. The Court of Appeals (CA) reversed the RTC’s decision on the civil aspect, reinstating the MeTC’s award of indemnity, holding petitioner civilly liable for the value of the checks despite his acquittal.

ISSUE

Whether the Court of Appeals erred in holding petitioner civilly liable to North Star for the value of the dishonored checks.

RULING

No, the Court of Appeals did not err. The Supreme Court denied the petition and affirmed the CA decision. The Court held that upon issuance of a check, it is presumed issued for valuable consideration under the Negotiable Instruments Law. The burden to rebut this presumption lies with the party alleging lack of consideration. Petitioner failed to present convincing evidence to overthrow this presumption. He did not deny issuing the checks or instructing Virginia Balagtas to remit the US$85,000 to View Sea Ventures. The evidence showed the checks were issued as payment for the peso equivalent of the US$85,000 owed, plus interest, and for the airline ticket credits. Petitioner’s claim that the US$85,000 was Virginia Balagtas’s personal investment was unsubstantiated. Therefore, notwithstanding his acquittal on the criminal charge due to technical grounds (presentment beyond the 90-day period), his civil liability for the value of the checks, arising from his contractual obligation, remains.