Case Digest, Travel-On Vs Court of Appeals, 1992

TOPIC:
Accomodation
Travel-On vs Court of Appeals

210 SCRA 352
G.R. No. L-56169
June 26, 1992
FACTS:
The case is about Petitioner Travel-On. Inc. ("Travel-On") who is a travel agency selling
airline tickets on commission basis for and in behalf of different airline companies and the
Private respondent Arturo S. Miranda who had a revolving credit line with petitioner. He
procured tickets from petitioner on behalf of airline passengers and derived commissions
therefrom.
In the stated complaint, Travel-On filed suit before the Court of First Instance ("CFI") of
Manila to collect on six (6) checks issued by private respondent with a total face amount of
P115,000.00.
Moreover, petitioner averred that from 5 August 1969 to 16 January 1970, petitioner
sold and delivered various airline tickets to respondent at a total price of P278,201.57; that to
settle said account, private respondent paid various amounts in cash and in kind, and thereafter
issued six (6) postdated checks amounting to P115,000.00 which were all dishonored by the
drawee banks. Travel-On further alleged that in March 1972, private respondent made another
payment of P10,000.00 reducing his indebtedness to P105,000.00. The writ of attachment was
granted by the court a quo.
In his defense, private respondent, however, claimed that he had already fully paid and
even overpaid his obligations and that refunds were in fact due to him. He argued that he had
issued the postdated checks for purposes of accommodation, as he had in the past accorded
similar favors to petitioner.
Then, during the proceedings, private respondent contested several tickets alleged to
have been erroneously debited to his account. He claimed reimbursement of his alleged over
payments, plus litigation expenses, and exemplary and moral damages by reason of the
allegedly improper attachment of his properties.
Consequently, the trial court ruled that private respondent's indebtedness to petitioner
was not satisfactorily established and that the postdated checks were issued not for the
purpose of encashment to pay his indebtedness but to accommodate the General Manager of
Travel-On to enable her to show to the Board of Directors that Travel-On was financially stable.
So, petitioner filed a motion for reconsideration but was denied by the trial court and on
appeal, the Court of Appeals affirmed the decision of the trial court.
Now, in the instant Petition for Review, it is urged that the postdated checks are per
se evidence of liability on the part of private respondent. Petitioner further argues that even
assuming that the checks were for accommodation, private respondent is still liable thereunder
considering that petitioner is a holder for value
ISSUE:
WON Miranda is liable on the postdated checks he issued even assuming that said
checks were issued for accommodation only.
HELD:
Yes, in the case at bar, the Court of Appeals, contrary to these established rules, placed
the burden of proving the existence of valuable consideration upon petitioner. This cannot be
countenanced. it was up to private respondent to show that he had indeed issued the checks
without sufficient consideration. The Court considers that private respondent was unable to
rebut satisfactorily this legal presumption. It must also be noted that those checks were issued
immediately after a letter demanding payment had been sent to private respondent by
petitioner Travel-On.
Also, the fact that all the checks issued by private respondent to petitioner were
presented for payment by the latter would lead to no other conclusion than that these checks
were intended for encashment. There is nothing in the checks themselves or in any other
document for that matter that states otherwise.
To further elaborate, the Court was unable to accept the Court of Appeals' conclusion
that the checks here involved were issued for "accommodation" and that accordingly private
respondent maker of those checks was not liable thereon to petitioner payee of those checks
since in the first place, while the Negotiable Instruments Law does refer to accommodation
transactions, no such transaction was here shown.
Hence, private respondent is liable.

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Travel-On vs Court of Appeals

Hence, private respondent is liable.

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