Travel-On vs CA

Travel-On, Inc. vs Court of Appeals

G.R. No. L-56169 June 26, 1992

-accommodation party

FACTS:

Petitioner Travel-On Inc. is a travel agency from which Arturo Miranda procured tickets on behalf of airline passengers and derived commissions therefrom.  Miranda was sued by petitioner to collect on the six postdated checks he issued which were all dishonored by the drawee banks.  Miranda, 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 not for the purpose of encashment to pay his indebtedness but for purposes of accommodation, as he had in the past accorded similar favors to petitioner.  Petitioner however urges that the postdated checks are per se evidence of liability on the part of private respondent and further argues that even assuming that the checks were for accommodation, private respondent is still liable thereunder considering that petitioner is a holder for value.

ISSUE:

Whether Miranda is liable on the postdated checks he issued even assuming that said checks were issued for accommodation only.

RULING:

There was no accommodation transaction in the case at bar.  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.  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.  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.  Miranda must be held liable on the checks involved as petitioner is entitled to the benefit of the statutory presumption that it was a holder in due course and that the checks were supported by valuable consideration.

**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.  In the case at bar, Travel-On was the 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.