G.R. No. 203020 , June 28, 2021
Sally Go-Bangayan, Petitioner, vs. Spouses Leoncio and Judy Cham Ho, Respondents.

FACTS

Petitioner Sally Go-Bangayan, through her sister-in-law Sixta L. Go, filed a complaint for sum of money and damages against respondent spouses. She alleged that in October 1997, respondents obtained a P700,000.00 loan from her with a 3% monthly interest. After paying interest for some months, respondents failed to settle the principal. Following demands, respondent Judy Cham Ho issued two crossed checks from a joint account with Leoncio Ho: PBCom Check No. A336519 dated October 6, 1997 for P200,000.00 and PBCom Check No. A336520 dated October 30, 1997 for P500,000.00, which Sixta received. Respondents requested petitioner not to deposit the checks, promising to redeem them in cash, but failed to do so despite subsequent demands. Petitioner sought payment of the principal, accrued interest, attorney’s fees, and damages.
Respondents denied the loan, claiming the checks were issued for discounting purposes at petitioner’s request, and that petitioner failed to find a financier and later requested her name be written as payee. They argued the complaint should be dismissed for lack of a written loan agreement under the Statute of Frauds and that the checks were stale by 2001.
During pre-trial, the parties stipulated on the due execution and issuance of the two crossed checks. The Regional Trial Court ruled in favor of petitioner, ordering respondents to pay P700,000.00 with 12% annual interest from the filing of the complaint and P70,000.00 in attorney’s fees. The Court of Appeals reversed, dismissing the complaint due to petitioner’s alleged failure to prove her cause of action by preponderance of evidence, citing inconsistencies in her testimony regarding the loan dates and the sequence of events.

ISSUE

Whether petitioner was able to establish her cause of action for sum of money against respondents by preponderance of evidence.

RULING

Yes. The Supreme Court reversed the Court of Appeals and reinstated the trial court’s decision with modifications. The Court held that petitioner sufficiently proved her claim. Under Section 24 of the Negotiable Instruments Law, every negotiable instrument is presumed issued for valuable consideration. Respondents’ admission during pre-trial of the checks’ due execution and issuance, coupled with their failure to present clear and convincing evidence to rebut the presumption of consideration, established the loan’s existence. The fact that the checks were crossed and payable to petitioner negated respondents’ claim of a rediscounting arrangement. The alleged inconsistencies in petitioner’s testimony were minor and did not affect the core claim of the loan and issuance of checks. The Court awarded the principal obligation of P700,000.00 with legal interest of 12% per annum from September 21, 2001 (date of final demand) until June 30, 2013, and 6% per annum thereafter until finality of the decision. Attorney’s fees were reduced to P30,000.00. All monetary awards shall earn 6% interest per annum from finality until fully paid.