Cayanan vs North Star

10 Oct 2011
GR 172954
Ponente:
Villarama, Jr. J.
Petitioner/s: Engr. Jose Cayanan , owner of a recruitment agency JEAC Intl Mgmt and Contractor Services
Respondent: North Star International Travel a travel agency
Sec 24: Presumption of Consideration
FACTS:
North Star extended credit to Cayanan for air tickets of clients - P510,034.47, and for payment to View
Sea Ventures of the amounts of $60,000 which came from respondent General Managers (Virginia) personal
account (ordered by Cayanan), and another $40,000 by telegraphic transfer with $15,000 from petitioner.
Cayanan then issued 3 checks drawn from Republic Planters Bank (RPB) and 2 checks from PCIB.
When drawn for payment, the checks from PCIB amounting to 1.5M and 35,000 were dishonored for
insufficiency of funds while the 3 checks from RPB were dishonored due to a stop payment by Cayanan. Upon
demand for payment, Cayanan failed to settle.
5 violations of BP 22 were filed by North Star in MeTC. which found Cayanan Guilty. On Appeal, the
RTC acquitted him. The CA, however, held Cayanan civilly liable.
The Supreme Court held that Cayanans defense that there was no consideration for the issuance of
checks could not hold as he has not presented credible evidence to rebut presumption that the checks were
issued for a valuable consideration.
ISSUE/S:
1. WON checks issued by Cayanan were for valuable consideration?
2. WON Cayanan is civilly liable to North Star for the value of the checks?
HELD:
1. Yes, checks were issued for a valuable consideration.
Cayanan has not presented credible evidence to rebut resumption that checks were issued for a
valuable consideration. Contrary to petitioners claims that North Star did not give any valuable
consideration for the checks since the US$85,000 was taken from the personal dollar account of
Virginia and not the corporate funds of North Star, the fact that petitioner himself specifically named
North Star as the payee of the checks is an admission of his liability to North Star and not to Virginia
Balagtas.
Also, his defense that dollars sent to View Sea in Nigeria was Virginias own investment could not hold
as she only remitted such money due to Cayanans request/ instructions this he never denied. It was
him who had business transactions with View Sea and not Virginia. Transaction between North Star
and Cayanan was actually in the nature of a loan, and checks were issued as payment of such
hence there was no absence of consideration for the issuance of checks.
2. Yes, Cayanan is liable.
Having failed to fully settle his obligation (loan) under the checks, the appellate court was correct in
holding petitioner liable to pay the value of the five checks he issued in favor of North Star.
SC DECISION:
Petition Denied. Cayanan liable.