G.R. No. 184458, et al.

| January 14, 2015

RODRIGO RIVERA, Petitioner, vs. SPOUSES SALVADOR CHUA AND VIOLETA S.
CHUA, Respondents.

FACTS: The parties to this case are long standing friends who have known each other since
1973. On February of 1995, Rivera obtained a loan from Spouses Chua for an amount of
PhP120, 000.00, as evidenced by a promissory note, payable on December 31, 1995.
In October 1998, Rivera, as payee, issued as partial payment for his loan, a check drawn
against his current account with Phil. Commercial International Bank (PCIB) in the amount of
PhP25, 000.00. In December 1998, the Spouses again received a check, presumably issued
by Rivera that was blank as to payee and amount. The check was issued in the amount
of P133,454.00 with "cash" as payee. Purportedly, both checks were partial payments for
Riveras loan.
Upon presentment for payment, however, the two checks were dishonored for the reason
"account closed." Despite repeatedly demanding payment from Rivera, the latter refused to
pay. As such, the Spouses filed a suit against him before the MeTC. For his defense, in the
main, Rivera claimed that the Promissory Note was forged, and denied his indebtedness
thereunder. The spouses, on the other hand, submitted the testimony of an NBI Document
Examiner who concluded that the signature on the promissory note was indeed Riveras.
After trial, the MeTC ruled in favour of the Spouses Chua. The decision was affirmed by both
the RTC and the CA.
ISSUE: Whether or not the Negotiable Instruments Law is applicable in the case at hand
HELD: No, it is not. The subject promissory note is not a negotiable instrument and hence,
the provisions of the NIL do not apply to this case.
Section 1 of the NIL requires the concurrence of the following elements to be a negotiable
instrument: (a) It must be in writing and signed by the maker or drawer; (b) Must contain an
unconditional promise or order to pay a sum certain in money; (c) Must be payable on
demand, or at a fixed or determinable future time; (d) Must be payable to order or to bearer;
and (e) Where the instrument is addressed to a drawee, he must be named or otherwise
indicated therein with reasonable certainty.
The Promissory Note in this case is made out to specific persons, herein respondents, the
Spouses Chua, and not to order or to bearer, or to the order of the Spouses Chua as payees.
However, even if Riveras Promissory Note is not a negotiable instrument and therefore
outside the coverage of Section 70 of the NIL which provides that presentment for payment
is not necessary to charge the person liable on the instrument, Rivera is still liable under the
terms of the Promissory Note that he issued.