PRINCE; NIL; RIGHTS OF THE HOLDER IN DUE COURSE

Bank of the Philippine Islands vs. Roxas, G.R. No. 157833, October 15, 2007
Petitioner vs. Respondents
Roxas sold vegetable oil to the Cawili spouses. As payment, the Cawili spouses issued a
personal check. But the personal check was dishonoured. The Cawili spouses replaced
the dishonoured check with a cashiers check from the BPI to be drawned against the
account of Mrs. Cawili. Again, the cashiers check was also dishonoured because Mrs.
Cawilis account closed. Thus, Roxas filed a complaint to the RTC for the collection of the
sum of money covering the value of the dishonoured, including prayer for damages and
cost of suit. BPI argued that the cashiers check was dishonoured because of lack of
consideration. Soon enough, the RTC rendered judgment against BPI and ordered the
latter to pay the sum of money covering the value of the check plus damages and cost of
suit. Not satisfied, BPI appealed to the CA but the latter affirmed the RTC. Hence, BPI
petitioned to the SC for Review on Certiorari. BPI reasoned that Roxas is not a holder in
due course since Roxas did not ...took it in good faith and for value; (Section 52 of the
Negotiable Instruments Law). Since the element of "value" is not present, therefore, Roxas
could not be a holder in due course.
ISSUE: Is Roxas a holder in due course when he held a cashiers check that was
dishonoured for lack of consideration or value, i.e., the account from which the
check should be drawn closed? YES. PETITION DENIED. CA AFFIRMED.
RULES/REASONS: Section 25 of the NIL states:
SEC. 25. Value, what constitutes. Value is any consideration sufficient to support a simple
contract. An antecedent or pre-existing debt constitutes value; and is deemed as such
whether the instrument is payable on demand or at a future time.
A value "in general terms may be some right, interest, profit or benefit to the party
who makes the contract or some forbearance, detriment, loan, responsibility, etc. on the
other side."
A cashiers check is really the banks own check and may be treated as a promissory note
with the bank as the maker. The check becomes the primary obligation of the bank
which issues it and constitutes a written promise to pay upon demand. This Court
took judicial notice of the "well-known and accepted practice in the business sector that a
cashiers check is deemed as cash." This is because the mere issuance of a cashiers
check is considered acceptance thereof.