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Naguiat Vs CA

Naguiat loaned Queaño P200,000 and issued checks totaling that amount, which Queaño claimed she never received. Queaño executed a real estate mortgage to secure the loan. Naguiat tried to foreclose on the mortgage when Queaño's check bounced, but the court found the loan contract was never perfected because Naguiat presented no evidence the checks were ever cashed, as required for the checks to constitute payment under the Civil Code. A loan is a real contract that requires delivery of the loan proceeds to be perfected, which did not occur since the checks were not shown to be encashed.

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476 views1 page

Naguiat Vs CA

Naguiat loaned Queaño P200,000 and issued checks totaling that amount, which Queaño claimed she never received. Queaño executed a real estate mortgage to secure the loan. Naguiat tried to foreclose on the mortgage when Queaño's check bounced, but the court found the loan contract was never perfected because Naguiat presented no evidence the checks were ever cashed, as required for the checks to constitute payment under the Civil Code. A loan is a real contract that requires delivery of the loan proceeds to be perfected, which did not occur since the checks were not shown to be encashed.

Uploaded by

KenJo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Naguiat vs CA and Queaño, GR No.

118375, 03 October 2003


412 SCRA 591
 
FACTS:
Queaño applied with Naguiat a loan for P200,000, which the latter granted. Naguiat indorsed to
Queaño Associated bank Check No. 090990 for the amount of P95,000 and issued also her own
Filmanbank Check to the order of Queaño for the amount of P95,000. The proceeds of these checks were
to constitute the loan granted by Naguiat to Queaño. To secure the loan, Queaño executed a Deed of Real
Estate Mortgage in favor of Naguiat, and surrendered the owner’s duplicates of titles of the mortgaged
properties. The deed was notarized and Queaño issued to Naguiat a promissory note for the amount of
P200,000. Queaño also issued a post-dated check amounting to P200,000 payable to the order of Naguait.
The check was dishonoured for insufficiency of funds. Demand was sent to Queaño. Shortly, Queaño, and
one Ruby Reubenfeldt met with Naguiat. Queaño told Naguiat that she did not receive the loan proceeds,
adding that the checks were retained by Reubenfeldt, who purportedly was Naguiat’s agent.
Naguiat applied for extrajudicial foreclosure of the mortgage. RTC declared the Deed as null and
void and ordered Naguiat to return to Queaño the owner’s duplicates of titles of the mortgaged lots.
 
ISSUE:
WON the issuance of check resulted in the perfection of the loan contract?
 
HELD:
NO. No evidence was submitted by Naguiat that the checks she issued or endorsed were actually
encashed or deposited. The mere issuance of the checks did not result in the perfection of the contract of
loan. The Civil Code provides that the delivery of bills of exchange and mercantile documents such as
checks shall produce the effect of payment only when they have been cashed. It is only after the checks
have been produced the effect of payment that the contract of loan may have been perfected.
Article 1934 of the Civil Code provides: An accepted promise to deliver something by way of
commodatum or simple loan is binding upon the parties, but the commodatum or simple loan itsel shall
not be perfected until the delivery of the object of the contract. A loan contract is a real contract, not
consensual, and as such, is perfected only upon the delivery of the objects of the contract.
A loan contract is a real contract, not consensual, and, as such, is perfected only upon the delivery
of the object of the contract. The objects of the contract are the loan proceeds which Queao would enjoy
only upon the encashment of the checks signed or indorsed by Naguiat. If indeed the checks were
encashed or deposited, Naguiat would have certainly presented the corresponding documentary evidence,
such as the returned checks and the pertinent bank records. Since Naguiat presented no such proof, it
follows that the checks were not encashed or credited to Queaos account.

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