Case Digest (G.R. No. 158885)
Facts:
In Atrium Management Corporation v. Court of Appeals (G.R. Nos. 109491 & 121794, February 28, 2001), petitioner Atrium Management Corporation filed on January 3, 1983 before the Regional Trial Court (RTC) of Manila Branch 09 an action for collection of the proceeds of four postdated checks totaling ₱2,000,000.00. The checks were drawn on the Rizal Commercial Banking Corporation by Hi-Cement Corporation, signed by its treasurer, Lourdes Victoria M. de Leon, and its chairman, Antonio de las Alas, payable to E.T. Henry & Co., Inc., which thereafter endorsed them to Atrium for value. Upon presentment, the checks were dishonored with the notation “payment stopped.” Atrium’s demand for payment was refused, prompting judicial collection. On July 20, 1989, the trial court found that Atrium had proven its cause of action and ordered Lourdes de Leon, her husband Rafael M. de Leon, E.T. Henry & Co., Inc., and Hi-Cement Corporation to pay jointly and severally the ₱2,000,000.00, plus legalCase Digest (G.R. No. 158885)
Facts:
- Initiation of Action
- On January 3, 1983, Atrium Management Corporation (Atrium) filed a collection suit with the RTC Manila for proceeds of four postdated RCBC checks totaling ₱2,000,000.00, issued by Hi-Cement Corporation (Hi-Cement) to E.T. Henry and Co., Inc. and endorsed to Atrium.
- The checks were dishonored by the drawee bank for the reason “payment stopped,” and Atrium’s demand for payment was refused.
- Trial Court Proceedings
- On July 20, 1989, RTC Branch 9 rendered judgment ordering Lourdes Victoria M. de Leon (treasurer of Hi-Cement), her husband Rafael de Leon, E.T. Henry and Co., Inc., and Hi-Cement, jointly and severally, to pay Atrium ₱2,000,000.00 plus interest from filing and attorney’s fees of ₱20,000.00.
- All other claims were dismissed for lack of merit.
- Court of Appeals Decision
- On March 17, 1993, the CA modified the RTC ruling by absolving Hi-Cement from liability and dismissing the complaint as against it.
- The CA held that:
- Lourdes de Leon lacked authority to issue the checks;
- The issuance by de Leon and Antonio de las Alas (Chairman) was ultra vires; and
- The checks were not issued for valuable consideration.
- Trial Evidence
- Atrium’s witness Carlos C. Syquia testified that Atrium agreed to discount the checks upon confirmation from Hi-Cement that they represented payment for petroleum products, identifying two confirmation letters dated February 6 and 9, 1981, signed by de Leon.
- Hi-Cement’s witness Erlinda Yap, former secretary to de Leon, stated that the checks secured a loan from E.T. Henry and that Hi-Cement had sufficient funds to cover them at issuance.
Issues:
- G.R. No. 109491 (Atrium as Petitioner)
- Whether issuance of the checks was an ultra vires act.
- Whether Atrium was a holder in due course and for value.
- Whether the CA erred in dismissing the case against Hi-Cement and ordering it to pay attorney’s fees.
- G.R. No. 121794 (de Leon as Petitioner)
- Whether the CA erred in holding de Leon personally liable for the Hi-Cement checks.
- Whether the CA erred in ruling that Atrium is a holder in due course.
- Whether the CA erred in finding the checks issued without consideration and holding de Leon liable.
- Whether the CA erred in ordering de Leon to pay Hi-Cement’s attorney’s fees and costs.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)