Go-Bangayan v. Spouses Ho, G.R. No. 203020 [June 28, 2021]

 Summary:

This case revolves around a dispute on whether crossed checks issued by the respondents represent a loan obligation or were solely for rediscounting purposes. The Supreme Court resolved the issue in favor of the petitioner by upholding the presumption of consideration for negotiable instruments.

Facts:

Respondents issued two crossed checks amounting to ₱700,000 in favor of the petitioner, who claimed these were for a loan granted in 1997.

The respondents denied any loan obligation, asserting that the checks were intended for rediscounting, not as proof of debt.

The petitioner sued for the principal amount, accrued interest, and damages.

Issues:

Whether or not the crossed checks represented a loan obligation.

Ruling:

Yes, the crossed checks were valid evidence of the loan.

Ratio Decidendi:

Section 24 of the Negotiable Instruments Law presumes that negotiable instruments are issued for value.

The respondents’ bare denial and failure to rebut this presumption cannot overcome the evidence of indebtedness. Furthermore, crossing the checks negated any rediscounting theory, as such checks are meant for deposit only by the payee, showing the definite purpose of payment.