2.2 Ubas Vs Chan

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G.R. No. 215910. February 6, 2017.*


 
MANUEL C. UBAS, SR. petitioner, vs. WILSON CHAN,
respondent.

Remedial Law; Civil Procedure; Cause of Action; Words and Phrases;


Cause of action is defined as the act or omission by which a party violates a
right of another.—Cause of action is defined as the act or omission by which
a party violates a right of another. It is well-settled that the existence of a
cause of action is determined by the allegations in the complaint. In this
case, petitioner’s cause of action is anchored on his claim that respondent
personally entered into a contract with him for the delivery of construction
materials amounting to P1,500,000.00, which was, however, left unpaid. He
also avers that respondent is guilty of fraud in the performance of said
obligation because the subject checks issued to him by respondent were
dishonored on the ground of stop payment. As proof, petitioner offered in
evidence, among others, the demand letter he sent to respondent detailing
the serial numbers of the checks that were issued by the latter, including the
dates and amounts thereof. He also offered the dishonored checks which
were in his possession.
  Same; Evidence; Burden of Proof; Where the plaintiff-creditor
possesses and submits in evidence an instrument showing the indebtedness,
a presumption that the credit has not been satisfied arises in [his] favor.—
Jurisprudence holds that “in a suit for a recovery of sum of money, as here,
the plaintiff-creditor [(petitioner in this case)] has the burden of proof to
show that defendant [(respondent in this case)] had not paid [him] the
amount of the contracted loan. However, it has also been long established
that where the plaintiff-creditor possesses and submits in evidence an
instrument showing the indebtedness, a presumption that the credit has not
been satisfied arises in [his] favor. Thus, the defendant is, in appropriate
instances, required to overcome the said presumption and present evidence
to prove the fact of payment so that no judgment will be entered against
him.” This presumption stems from Section 24 of the NIL, which provides
that: Section 24. Presumption of Considera-

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*  FIRST DIVISION.

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CASE Ubas, Sr. vs. Chan

tion.—Every negotiable instrument is deemed prima facie to have been


issued for a valuable consideration; and every person whose signature
appears thereon to have become a party thereto for value.
Mercantile Law; Negotiable Instruments Law; Complete and Delivered
Instruments; Section 16 of the Negotiable Instruments Law (NIL) provides
that when an instrument is no longer in the possession of the person who
signed it and it is complete in its terms, “a valid and intentional delivery by
him is presumed until the contrary is proved.”—Respondent’s defense that
the subject checks were lost and, thus, were not actually issued to petitioner
is a factual matter already passed upon by the RTC. As aptly pointed out by
the trial court, it would have been contrary to human nature and experience
for petitioner to send respondent a demand letter detailing the particulars of
the said checks if he indeed unlawfully obtained the same. In fact, it is
glaring that respondent did not present Engr. Merelos, the project engineer
who had purportedly lost the checks, to personally testify on the
circumstances surrounding the checks’ loss. Further, Unimasters’
comptroller, Murillo, testified during trial that “she came to know that the
lost checks were deposited in the account of [petitioner as] she was
informed by the [o]ffice[r]-in-charge of the drawee bank, the Far East Bank
of Tacloban, City Branch.” However, there was no showing that Unimasters
and/or respondent commenced any action against petitioner to assert its
interest over a significant sum of P1,500,000.00 relative to the checks that
were supposedly lost/stolen. Clearly, this paucity of action under said
circumstances is again, inconsistent with ordinary human nature and
experience. Thus, absent any cogent reason to the contrary, the Court defers
to the RTC’s findings of fact on this matter. In Madrigal v. CA, 456 SCRA
247 (2005), it was explained that: The Supreme Court’s jurisdiction is
limited to reviewing errors of law that may have been committed by the
lower court. The Supreme Court is not a trier of facts. It leaves these matters
to the lower court, which [has] more opportunity and facilities to examine
these matters. This same Court has declared that it is the policy of the Court
to defer to the factual findings of the trial judge, who has the advantage of
directly observing the witnesses on the stand and to determine their
demeanor whether they are telling or distorting the truth. Besides, Section
16 of the NIL provides that when an instrument is no longer in the
possession of the person who signed it and it is complete in its

 
 

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CASE Ubas, Sr. vs. Chan

terms, “a valid and intentional delivery by him is presumed until the


contrary is proved,” as in this case.

PETITION for review on certiorari of a decision of the Court of


Appeals.
The facts are stated in the opinion of the Court.
   Marion Fritz Broto for petitioner.
   Vicente A. Espina, Jr. for respondent.

PERLAS-BERNABE, J.:
 
Assailed in this petition for review on certiorari1 is the Decision2
dated October 28, 2014 of the Court of Appeals (CA) in C.A.-G.R.
CV No. 04024 dismissing the complaint filed by petitioner Manuel
C. Ubas, Sr. (petitioner) for lack of cause of action.

 
The Facts
 
This case stemmed from a Complaint for Sum of Money with
Application for Writ of Attachment3 (Complaint) filed by petitioner
against respondent Wilson Chan (respondent) before the Regional
Trial Court of Catarman, Northern Samar, Branch 19 (RTC),
docketed as Civil Case No. C-1071. In his Complaint, petitioner
alleged that respondent, “doing business under the name and style of
UNIMASTER,” was indebted to him in the amount of
P1,500,000.00, representing the price of boulders, sand, gravel, and
other construction materials allegedly purchased by respondent from
him for the construction of the Macagtas Dam in Barangay
Macagtas,

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1  Rollo, pp. 3-26.


2   Id., at pp. 28-45. Penned by Associate Justice Ma. Luisa C. Quijano-Padilla,
with Associate Justices Ramon Paul L. Hernando and Marie Christine Azcarraga-
Jacob, concurring.
3  Dated December 14, 2001. Records, pp. 1-5.

 
 

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CASE Ubas, Sr. vs. Chan

Catarman, Northern Samar (Macagtas Dam project). He claimed that


the said obligation has long become due and demandable and yet,
respondent unjustly refused to pay the same despite repeated
demands.4 Further, he averred that respondent had issued three (3)
bank checks, payable to “CASH” in the amount of P500,000.00
each, on January 31, 1998, March 13, 1998, and April 3, 1998,
respectively (subject checks),5 but when petitioner presented the
subject checks for encashment on June 29, 1998, the same were
dishonored due to a stop payment order. As such, respondent was
guilty of fraud in incurring the obligation.6
Respondent filed an Answer with Motion to Dismiss,7 seeking
the dismissal of the case on the following grounds: (a) the complaint
states no cause of action, considering that the checks do not belong
to him but to Unimasters Conglomeration, Inc. (Unimasters); (b)
there is no contract that ever existed between him and petitioner; and
(c) if petitioner even had a right of action at all, the complaint should
not have been filed against him but against Unimasters, a duly
registered construction company which has a separate juridical
personality from him.8
During trial, petitioner testified that on January 1, 1998, he
entered into a verbal agreement with respondent for the supply of
gravel, sand, and boulders for the Macagtas Dam project.9 He
presented as the only proof of their business transaction the subject
checks issued to him by respondent and delivered to his office by
respondent’s worker on different

_______________

4  Petitioner’s last demand was through a Demand Letter received by respondent


on December 5, 2001 per Registry Return Receipt (id., at p. 6).
5  Id., at p. 7.
6  See Records, pp. 1-2 and Rollo, pp. 15-16.
7  Dated May 10, 2002. Id., at pp. 23-30.
8  Id., at pp. 26-27.
9  See TSN, November 24, 2004, pp. 14-16 and TSN, January 31, 2005, p. 6.

 
 

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occasions. He alleged that, at the behest of respondent, he only
deposited the checks to his bank account on June 29, 1998.11 When
the checks were dishonored, petitioner demanded from respondent
the value of the dishonored checks, but to no avail.12 Apart from his
own testimony, petitioner presented Jose Chie Ubas, the company
operations manager of Ubas Construction, Inc., who testified that in
1998, he accompanied several deliveries of gravel, sand, and
boulders to a certain project engineer named Paking dela Cruz at the
Macagtas Dam project site, and that respondent issued checks for
their payment; thus, he came to know that there was a transaction
between them.13 Petitioner also presented Francisco Barrelo, the
former employee of Far East Bank, who testified that the subject
checks were dishonored upon presentment because of a stop
payment order by the bank.14
On the other hand, respondent presented Unimasters’
comptroller, Belma Murillo (Murillo), who testified that Unimasters
was contracted by the Department of Public Works and Highways
for the Macagtas Dam project; that Engineer Ereberto Merelos
(Engr. Merelos) was hired as project engineer tasked to supervise the
work, the hiring of laborers, the delivery and payment of aggregates,
and the payroll, and was likewise in charge of negotiating the supply
of aggregates and the revolving fund for its payments; that the
subject checks were issued for the replenishment of the revolving
fund,15 but Engr. Merelos lost the same sometime in January 1998;
and that upon being informed about the loss of the checks,
respondent, as President of Unimasters, instructed Murillo to issue a
Stop Payment Order on April 10, 1998.16 Murillo be-

_______________

10  Id., at pp. 16-17.


11  Id., at pp. 17-18.
12  Id., at pp. 22-24.
13  See TSN, August 13, 2004, pp. 7-8 and 21-22.
14  See TSN, November 24, 2004, pp. 3-4 and 9.
15  See TSN, March 3, 2006, pp. 2, 9-15, and 22.
16  Id., at pp. 15-16 and 17-18.

 
 

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CASE Ubas, Sr. vs. Chan

lied petitioner’s claim that the subject checks were given to the latter
in payment of the aggregates and materials that he allegedly

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delivered for the Macagtas Dam project, considering that their office
did not process any delivery receipt or proof of delivery of such
aggregates by petitioner.17
For his part, respondent admitted to having issued the subject
checks. However, he claimed that they were not issued to petitioner,
but to Engr. Merelos for purposes of replenishing the project’s
revolving fund.18 Respondent also described the procedure in the
delivery of aggregates to their project sites, asserting that petitioner
was not among their suppliers of aggregates for the Macagtas Dam
project as, in fact, the latter never submitted any bill attaching
purchase orders and delivery receipts for payments as other
suppliers did.19
 
The RTC’s Ruling
 
In a Decision20 dated January 30, 2008, the RTC ruled that
petitioner had a cause of action against respondent. At the outset, it
observed that petitioner’s demand letter — which clearly stated the
serial numbers of the checks, including the dates and amounts
thereof — was not disputed by respondent. Also, it did not lend
credence to respondent’s claim that the subject checks were lost and
only came into the possession of petitioner, considering the fact that
petitioner mentioned the details of the subject checks in the said
demand letter and, thus, would have incriminated himself had he
actually stolen them.21 It also took note that respondent did not file a
case for theft in relation to the lost checks found in possession of
petitioner.22 Thus, finding that respondent failed to over-

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17  Id., at pp. 17-18.


18  See TSN, December 4, 2006, pp. 13-16.
19  Id., at pp. 7-9, 12, and 17-18.
20  Rollo, pp. 46-59. Penned by Judge Norma Megenio Cardenas.
21  Id., at p. 57.
22  Id.

 
 

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CASE Ubas, Sr. vs. Chan

come the disputable presumption that every party to an instrument


acquired the same for a valuable consideration under Section 24 of
Act No. 2031,23 or the Negotiable Instruments Law (NIL), the RTC

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ordered him to pay petitioner the amount of P1,500,000.00


representing the principal obligation plus legal interests from June
1998 until fully paid, P40,000 as litigation expenses, P50,000 as
attorney’s fees, and cost of the suit.24
With the subsequent denial25 of his motion for reconsideration,26
respondent filed a notice of appeal.27
 
The CA’s Ruling
 
28
In a Decision dated October 28, 2014, the CA reversed and set
aside the RTC’s ruling, dismissing petitioner’s complaint on the
ground of lack of cause of action.
It held that respondent was not the proper party-defendant in the
case, considering that the drawer of the subject checks was
Unimasters, which, as a corporate entity, has a separate and distinct
personality from respondent. It observed that the subject checks
cannot be validly used as proof of the alleged transactions between
petitioner and respondent, since from the face of these checks alone,
it is readily apparent that they are not personal checks of the former.
Thus, if at all, the said checks can only serve as evidence of
transactions between Unimasters and petitioner.29 Accordingly,
Unimasters is an indispensable party, and since it was not
impleaded, the court had no jurisdiction over the case.30

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23  Enacted on February 3, 1911.


24  Rollo, p. 58.
25  See Resolution dated August 19, 2008; Records, pp. 347-348.
26  Dated February 26, 2008; id., at pp. 322-330.
27  Dated September 19, 2008; id., at pp. 351-353.
28  Rollo, pp. 28-45.
29  Id., at pp. 41-42.
30  Id., at p. 42.

 
 

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CASE Ubas, Sr. vs. Chan

In any event, the CA found that petitioner’s claim of unpaid


deliveries had no merit, given that not a single delivery receipt, trip
ticket or similar document was presented to establish the delivery of
construction materials to respondent.31 Further, the CA gave scant
consideration to petitioner’s argument that respondent and

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Unimasters should be treated as one and the same under the doctrine
of piercing the veil of corporate fiction because not only was the
issue raised for the first time on appeal, but that the records bear no
evidence that would establish the factual conditions for the
application of the doctrine.32
Hence, the instant petition.
 
The Issue Before the Court
 
The sole issue in this case is whether or not the CA erred in
dismissing petitioner’s complaint for lack of cause of action.
 
The Court’s Ruling
 
The petition is meritorious.
Cause of action is defined as the act or omission by which a party
violates a right of another. It is well-settled that the existence of a
cause of action is determined by the allegations in the complaint.33
In this case, petitioner’s cause of action is anchored on his claim
that respondent personally entered into a contract with him for the
delivery of construction materials amounting to P1,500,000.00,
which was, however, left unpaid. He also avers that respondent is
guilty of fraud in the performance of said obligation because the
subject checks issued to him by re-

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31  Id., at p. 43.
32  Id., at pp. 43-44.
33  Heirs of Magdaleno Ypon v. Ricaforte, 713 Phil. 570, 574-575; 700 SCRA 778,
783 (2013).

 
 

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CASE Ubas, Sr. vs. Chan

spondent were dishonored on the ground of stop payment. As proof,


petitioner offered in evidence, among others, the demand letter he
sent to respondent detailing the serial numbers of the checks that
were issued by the latter, including the dates and amounts thereof.
He also offered the dishonored checks which were in his possession.
Respondent neither disputes the fact that he had indeed signed
the subject checks nor denies the demand letter sent to him by
petitioner. Nevertheless, he claims that the checks were not issued to

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petitioner but to the project engineer of Unimasters who, however,


lost the same. He also disclaims any personal transaction with
petitioner, stating that the subject checks were in fact, issued by
Unimasters and not him. Besides, petitioner failed to present any
documentary proof that he or his firm delivered construction
materials for the Macagtas Dam project.
The Court finds for petitioner.
Jurisprudence holds that “in a suit for a recovery of sum of
money, as here, the plaintiff-creditor [(petitioner in this case)] has
the burden of proof to show that defendant [(respondent in this
case)] had not paid [him] the amount of the contracted loan.
However, it has also been long established that where the plaintiff-
creditor possesses and submits in evidence an instrument showing
the indebtedness, a presumption that the credit has not been satisfied
arises in [his] favor. Thus, the defendant is, in appropriate instances,
required to overcome the said presumption and present evidence to
prove the fact of payment so that no judgment will be entered
against him.”34 This presumption stems from Section 24 of the NIL,
which provides that:

Section 24. Presumption of Consideration.—Every negotiable


instrument is deemed prima facie to have

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34  Pua v. Lo Bun Tiong, 720 Phil. 511, 524; 708 SCRA 571, 584 (2013).

 
 

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CASE Ubas, Sr. vs. Chan

been issued for a valuable consideration; and every person whose signature
appears thereon to have become a party thereto for value.

 
As mentioned, petitioner had presented in evidence the three (3)
dishonored checks which were undeniably signed by respondent.
During trial, respondent admitted to the following:

[Atty. Arturo Villarin] Q: Showing to you this check dated January 31, 1998
x x x, please go over this check and tell the Honorable Court if that is the
same check that you issued as replenishment for the revolving fund?
x x x x
[Respondent] A: Yes, this is the check I signed.

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Q: At the right bottom portion of this check is a signature, whose signature


is this?
A: That is my signature.
Q: Likewise, for the month of March 13, 1998[,] there is a check in the
amount of [P500,000.00]. Is this also the check that you issued as
replenishment for the project?
A: Yes, Sir.35 (Emphases supplied)

 
Hence, as the RTC correctly ruled, it is presumed that the subject
checks were issued for a valid consideration, which therefore,
dispensed with the necessity of any documentary evidence to
support petitioner’s monetary claim. Unless otherwise rebutted, the
legal presumption of consideration under Section 24 of the NIL
stands. Verily, “the vital function of legal presumption is to dispense
with the need for proof.”36

_______________

35  TSN, December 4, 2006, pp. 14-15.


36  Malic v. Workmen’s Compensation Commission, 182 Phil. 5, 8; 93 SCRA 386,
390 (1979).

 
 

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CASE Ubas, Sr. vs. Chan

Respondent’s defense that the subject checks were lost and, thus,
were not actually issued to petitioner is a factual matter already
passed upon by the RTC. As aptly pointed out by the trial court, it
would have been contrary to human nature and experience for
petitioner to send respondent a demand letter detailing the
particulars of the said checks if he indeed unlawfully obtained the
same. In fact, it is glaring that respondent did not present Engr.
Merelos, the project engineer who had purportedly lost the checks,
to personally testify on the circumstances surrounding the checks’
loss. Further, Unimasters’ comptroller, Murillo, testified during trial
that “she came to know that the lost checks were deposited in the
account of [petitioner as] she was informed by the [o]ffice[r]-in-
charge of the drawee bank, the Far East Bank of Tacloban, City
Branch.”37 However, there was no showing that Unimasters and/or
respondent commenced any action against petitioner to assert its
interest over a significant sum of P1,500,000.00 relative to the
checks that were supposedly lost/stolen. Clearly, this paucity of
action under said circumstances is again, inconsistent with ordinary
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human nature and experience. Thus, absent any cogent reason to the
contrary, the Court defers to the RTC’s findings of fact on this
matter. In Madrigal v. CA,38 it was explained that:

The Supreme Court’s jurisdiction is limited to reviewing errors of law that


may have been committed by the lower court. The Supreme Court is not a
trier of facts. It leaves these matters to the lower court, which [has] more
opportunity and facilities to examine these matters. This same Court has
declared that it is the policy of the Court to defer to the factual findings of
the trial judge, who has the advantage of directly observing the witnesses on
the

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37  Rollo, p. 54.
38  496 Phil. 149; 456 SCRA 247 (2005).

 
 

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CASE Ubas, Sr. vs. Chan

stand and to determine their demeanor whether they are telling or distorting
the truth.39

 
Besides, Section 16 of the NIL provides that when an instrument
is no longer in the possession of the person who signed it and it is
complete in its terms, “a valid and intentional delivery by him is
presumed until the contrary is proved,” as in this case.
In Pacheco v. CA,40 the Court has expressly recognized that a
check “constitutes an evidence of indebtedness” and is a veritable
“proof of an obligation.” Hence, petitioner may rely on the same as
proof of respondent’s personal obligation to him.
Although the checks were under the account name of Unimasters,
it should be emphasized that the manner or mode of payment does
not alter the nature of the obligation. The source of obligation, as
claimed by petitioner in this case, stems from his contract with
respondent. When they agreed upon the purchase of the construction
materials on credit for the amount of P1,500,000.00, the contract
between them was perfected.41 Therefore, even if corporate checks
were issued for the payment of the obligation, the fact remains that
the juridical tie between the two (2) parties was already established

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39  Id., at p. 156; p. 255, citing Bernardo v. Court of Appeals, G.R. No. 101680,
December 7, 1992, 216 SCRA 224, 232.
40  377 Phil. 627; 319 SCRA 595 (1999).
41  “An obligation is a juridical necessity to give, to do or not to do (Art. 1156,
Civil Code). The obligation is constituted upon the concurrence of the essential
elements thereof, viz.: (a) The vinculum juris or juridical tie which is the efficient
cause established by the various sources of obligations (law, contracts, quasi-
contracts, delicts and quasi-delicts); (b) the object which is the prestation or conduct,
required to be observed (to give, to do or not to do); and (c) the subject-persons who,
viewed from the demandability of the obligation, are the active (obligee) and the
passive (obligor) subjects.” (Ang Yu Asuncion v. Court of Appeals, G.R. No. 109125,
December 2, 1994, 238 SCRA 602, 610)

 
 

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CASE Ubas, Sr. vs. Chan

during the contract’s perfection stage and, thus, does not preclude
the creditor from proceeding against the debtor during the contract’s
consummation stage.
That a privity of contract exists between petitioner and
respondent is a conclusion amply supported by the averments and
evidence on record in this case.
First, the Court observes that petitioner was consistent in his
account that he directly dealt with respondent in his personal and not
merely his representative capacity. In his Complaint, petitioner
alleged that “[Chan, doing business under the name and style of
Unimaster] is indebted to [him] in the amount [P1,500,000.00]
x x x.”42
Moreover, the demand letter, which was admitted by respondent,
was personally addressed to respondent and not to Unimasters as
represented by the latter.43
Also, it deserves mentioning that in his testimony before the
RTC, petitioner explained that he delivered the construction
materials to respondent absent any written agreement due to his trust
on the latter, viz.:

[Atty. Daniel Arnold Añover] Q: So, when you delivered the aggregates, did
you agree to deliver the aggregates to Mr. Chan the defendant in this case,
you did not put the terms into writing? Am I correct?
[Petitioner] A: None, because it is verbal only, because I trusted him being a
contractor.
x x x x
Q: Now, Mr. Witness you said that you trusted Mr. Chan, am I correct?

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A: Yes, Sir.
Q: And that he promised you several times that he would pay you?

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42  Records, p. 1.
43  Id., at p. 6. See also Rollo, p. 57.
 

 
 

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CASE Ubas, Sr. vs. Chan

A: Yes, he promised me many times.


Q: And yet you still hold all these checks for security? Correct?
A: Yes Sir.
Q: Now, Mr. Witness, you said that you trusted Mr. Chan, then why did you
not just handed [sic] over the checks to him, because you said you
trusted him?
A: How many times I gone to Tacloban and I went to Unimaster Office but
they referred me to the Leyte Park Hotel, since they are no longer in
good terms with Mr. Wilson Chan so they referred me to Leyte Park
Hotel and then I went to Mr. Chan he promised that he will pay me and
after several months again, the same will be paid next month because
there will be final inspection I even let him borrow my equipment for
free and hoping that the checks will be funded but again he lied.44

 
This squares with respondent’s own testimony, wherein he stated
that every time he wanted to have supplies delivered for the
Macagtas Dam project, he would not enter into any written contract:

[Atty. Marlonfritz Broto] Q: [Okay], now having read this particular


statement Mr. Witness would you agree with this representation that every
time you want to have supplies in Macagtas dam you do not enter into
contract as you testified here a while ago?
[Respondent] A: Yes, Sir.45 (Emphasis supplied)

 
Petitioner further testified that he personally demanded the value
of the subject checks from respondent in his office, viz.:

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44  TSN, January 31, 2005, pp. 6-7.

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45  TSN, December 4, 2006, p. 24.

 
 

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CASE Ubas, Sr. vs. Chan

[Atty. Daniel Arnold Añover] Q: Now, Mr. Witness you said that you visited
Leyte Park Hotel several times, am I correct?
[Petitioner] A: I think once or twice to demand from Mr. Wilson Chan.
Q: And of course, you were able to see Mr. Chan personally?
A: Yes, we had the conversation.
x x x x
Q: So you are saying you are talking to him in his office?
A: Yes, apparently, it was his Office.
x x x x
Q: You said that when you were there you were just talking each other [sic]
and you were taking coffee and made promises, right?
A: Yes, sir.46

 
Notably, these statements were considered undisputed. Hence,
the same are binding on the parties.
In fine, the Court holds that the CA erred in dismissing
petitioner’s complaint against respondent on the ground of lack of
cause of action. Respondent was not able to overcome the
presumption of consideration under Section 24 of the NIL and
establish any of his affirmative defenses. On the other hand, as the
holder of the subject checks which are presumed to have been issued
for a valuable consideration, and having established his privity of
contract with respondent, petitioner has substantiated his cause of
action by a preponderance of evidence. “‘Preponderance of
evidences is a phrase that, in the last analysis, means probability of
the truth. It is evidence that is more convincing to the court as
worthy of belief than

_______________

46  TSN, January 31, 2005, p. 17.

 
 

674

674 SUPREME COURT REPORTS ANNOTATED


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6/24/2020 SUPREME COURT REPORTS ANNOTATED 816

CASE Ubas, Sr. vs. Chan

that which is offered in opposition thereto.”47 Consequently,


petitioner’s Complaint should be granted.
WHEREFORE, the petition is GRANTED. The Decision dated
October 28, 2014 of the Court of Appeals in C.A.-G.R. CV No.
04024 is hereby SET ASIDE. The Decision dated January 30, 2008
of the Regional Trial Court of Catarman, Northern Samar, Branch 19
in Civil Case No. C-1071 is REINSTATED.
SO ORDERED.

Sereno (CJ., Chairperson), Leonardo-De Castro, Del Castillo


and Caguioa, JJ., concur.

Petition granted, judgment set aside.

Notes.—It has long been established that where the plaintiff-


creditor possesses and submits in evidence an instrument showing
the indebtedness, a presumption that the credit has not been satisfied
arises in her favor. (Pua vs. Lo Bun Tiong, 708 SCRA 571 [2013])
In order that one who is not a holder in due course can enforce
the instrument against a party prior to the instrument’s completion,
two requisites must exist: (1) that the blank must be filled strictly in
accordance with the authority given; and (2) it must be filled up
within a reasonable time. (Patrimonio vs. Gutierrez, 724 SCRA 636
[2014])
 
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47  Heirs of Jose Lim v. Lim, 628 Phil. 40, 48; 614 SCRA 141, 148-149 (2010).

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