Judge Caldona

DIZON | LORESCA | LUMINARIAS | SANTOS, K. | SY | TY | VILCHES Ateneo Law School

2-D ||

Issue: Negotiable Instruments Case WON the PN had a valuable consideration Digests Held: Section 24 With the PNs consideration being contrary to law and Pineda v. Dela Rama (4/28/83) public policy, such PN is void ab initio and no cause of action D: The presumption that a negotiable instrument is for the collection cases can arise from it. Hence, Atty. Dela issued for a valuable consideration is only prima facie. Rama cannot collect on the PN It can be rebutted by proof to the contrary a) The presumption under Sec 24 of the NIL is only prima facie. It can be rebutted by proof to the Facts: contrary 1. Pineda retained the services of Atty. Dela Rama to stop or delay the impending institution of criminal action by the National Rice and Corn Administration (NARIC) against him for allegedly misappropriating 11,000 cavans of palay deposited in his ricemill 2. Pineda borrowed P9,300 from Atty. Dela Rama in b) The PN belies Dela Ramas claim that it was a order to purchase a hacienda in Mindoro loan. The PN readsThis represents the cash 3. Atty. Dele Rama sued Pinade to pay the value of the advances made by him (Pineda) in connection note with my case for which he (Dela Rama) is my 4. Pineda claims that he signed the P9,300 PN because attorney-in-law Atty. Dela Rama told him that the amount had c) Atty. Dela Rama was a close friend of NARIC already been advanced to grease the palms of Administrator Rodriguez to whom the former NARIC officials made proper representations to delay the 5. RTC: Pineda did not receive the P9,300 proceeds of criminal prosecution of Pineda the note. The RTC believed that the PN was given to d) It is also unusual for a lawyer to lend money to grease the hands of the NARIC officials. Evidence his client whom he has known only for 3 month also shows that Atty. Dela Rama received P3000 to without interest or security grease the palms of the NARIC officials. Since the e) With the PN executed for an illegal consideration purpose of the P3,000 payment was illegal, Pineda under Art. 1409 (1), such PN is void ab initio and was ordered to return the same to Atty. Dela Rama Atty. Dela Rama has no cause of action under 6. CA: Pineda is liable to pay the value of the Art. 1421. (for being in pari delicto) instrument since a 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 (Sec. 24 of the NIL) 1

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