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    Travel On v. CA

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    mishiru
    1. The petitioner, a travel agency, filed a suit against the private respondent, Miranda, to collect on 6 checks totaling 115,000 pesos that were dishonored. Miranda claimed the debt had been paid. 2. The court found that Miranda was not an accommodated party because an accommodation involves lending credit to another party, not issuing checks to the party that is owed money. 3. Travel-On, as payee of the checks, did not receive any value from the checks bouncing and was entitled to the presumption of being a holder in due course. Miranda did not provide sufficient evidence to rebut this presumption. Therefore, the court ruled Miranda was liable for the amounts owed on the checks

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    Travel On v. CA

    Uploaded by

    mishiru
    29 views2 pages
    1. The petitioner, a travel agency, filed a suit against the private respondent, Miranda, to collect on 6 checks totaling 115,000 pesos that were dishonored. Miranda claimed the debt had been paid. 2. The court found that Miranda was not an accommodated party because an accommodation involves lending credit to another party, not issuing checks to the party that is owed money. 3. Travel-On, as payee of the checks, did not receive any value from the checks bouncing and was entitled to the presumption of being a holder in due course. Miranda did not provide sufficient evidence to rebut this presumption. Therefore, the court ruled Miranda was liable for the amounts owed on the checks

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    5. Travel On v. CA

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    1. The petitioner, a travel agency, filed a suit against the private respondent, Miranda, to collect on 6 checks totaling 115,000 pesos that were dishonored. Miranda claimed the debt had been paid. 2. The court found that Miranda was not an accommodated party because an accommodation involves lending credit to another party, not issuing checks to the party that is owed money. 3. Travel-On, as payee of the checks, did not receive any value from the checks bouncing and was entitled to the presumption of being a holder in due course. Miranda did not provide sufficient evidence to rebut this presumption. Therefore, the court ruled Miranda was liable for the amounts owed on the checks

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    29 views2 pages

    Travel On v. CA

    Uploaded by

    mishiru
    1. The petitioner, a travel agency, filed a suit against the private respondent, Miranda, to collect on 6 checks totaling 115,000 pesos that were dishonored. Miranda claimed the debt had been paid. 2. The court found that Miranda was not an accommodated party because an accommodation involves lending credit to another party, not issuing checks to the party that is owed money. 3. Travel-On, as payee of the checks, did not receive any value from the checks bouncing and was entitled to the presumption of being a holder in due course. Miranda did not provide sufficient evidence to rebut this presumption. Therefore, the court ruled Miranda was liable for the amounts owed on the checks

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    5. Travel-on v.

    CA

    Facts

    1. Petitioner was a travel agency selling airline tickets on a commission basis for different
    airline companies.
    2. Private respondent Miranda had a revolving credit line with petitioner wherein he procures
    tickets from them on behalf of airline passengers and then he obtains commissions from
    those tickets.
    3. On 14 June 1972, Travel-On filed suit before the Court of First Instance of Manila to collect
    on 6 checks issued by private respondent with a total face amount of P115,000.00.
    4. Private respondent 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.
    5. Private respondent admitted having had transactions with Travel-On during the period
    stipulated in the complaint.
    6. 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. During the proceedings, private respondent contested several tickets
    alleged to have been erroneously debited to his account.

    Issue/s

    Whether petitioner is an accommodated party

    Ruling

    No, petitioner is not an accommodated party

    Rationale

    While the Negotiable Instruments Law does refer to accommodation transactions, no such
    transaction was here shown. Section 29 of the Negotiable Instruments Law provides as follows:

    Sec. 29. Liability of accommodation party. — An accommodation party is one who has
    signed the instrument as maker, drawer, acceptor, or indorser, without receiving value
    therefor, and for the purpose of lending his name to some other person. Such a person is
    liable on the instrument to a holder for value, notwithstanding such holder, at the time of
    taking the instrument, knew him to be only an accommodation party.
    In accommodation transactions recognized by the Negotiable Instruments Law, an
    accommodating party lends his credit to the accommodated party, by issuing or indorsing a check
    which is held by a payee or indorsee as a holder in due course, who gave full value therefor to
    the accommodated party. The latter, in other words, receives or realizes full value which the
    accommodated party then must repay to the accommodating party, unless of course the
    accommodating party intended to make a donation to the accommodated party. But the
    accommodating party is bound on the check to the holder in due course who is necessarily a third
    party and is not the accommodated party. Having issued or indorsed the check, the
    accommodating party has warranted to the holder in due course that he will pay the same
    according to its tenor.

    In the case at bar, Travel-On was payee of all six (6) checks, it presented these checks
    for payment at the drawee bank but the checks bounced. Travel-On obviously was not an
    accommodated party; it realized no value on the checks which bounced.

    Travel-On was entitled to the benefit of the statutory presumption that it was a holder in
    due course, that the checks were supported by valuable consideration. Private respondent
    maker of the checks did not successfully rebut these presumptions. The only evidence aliunde
    that private respondent offered was his own self-serving uncorroborated testimony. He claimed
    that he had issued the checks to Travel-On as payee to "accommodate" its General Manager who
    allegedly wished to show those checks to the Board of Directors of Travel-On to "prove" that
    Travel-On's account receivables were somehow "still good." It will be seen that this claim was in
    fact a claim that the checks were merely simulated, that private respondent did not intend to bind
    himself thereon. Only evidence of the clearest and most convincing kind will suffice for that
    purpose; no such evidence was submitted by private respondent. The latter's explanation was
    denied by Travel-On's General Manager; that explanation, in any case, appears merely contrived
    and quite hollow to us. Upon the other hand, the "accommodation" or assistance extended to
    Travel-On's passengers abroad as testified by petitioner's General Manager involved, not the
    accommodation transactions recognized by the NIL, but rather the circumvention of then existing
    foreign exchange regulations by passengers booked by Travel-On, which incidentally involved
    receipt of full consideration by private respondent.

    Thus, we believe and so hold that private respondent must be held liable on the six (6)
    checks here involved. Those checks in themselves constituted evidence of indebtedness of
    private respondent, evidence not successfully overturned or rebutted by private respondent.

    Since the checks constitute the best evidence of private respondent's liability to petitioner
    Travel-On, the amount of such liability is the face amount of the checks, reduced only by the
    P10,000.00 which Travel-On admitted in its complaint to have been paid by private respondent
    sometime in March 1992.

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