Rivera vs. Chua G.R. No.

184458 May, 12, 1989

FACTS:
 Rivera and the spouses Chua are life long friends with the former and S. Chua
being compadres.
 Spouses Chua are in a money lending business. Rivera entered a loan of 120 000
pesos accompanied by a promissory note where he agrees, in case he is unable to
pay by Dec 31 1995, that he pays an interest of 5% monthly from then and other
payments in the event that a lawyer is needed for the collections.
 Three years passed and after repeated demand from the Chuas, and Rivera payed
only two checks in the amount of 50 000 and 133,454 which were dishonored for
Rivera's account was now closed. Rivera claims that the note was forged and he
did not incur such debt and his cheques were for another loan secured by a
mortgage and the second check was only supposed to be for the amount of 1300
instead of 133,454.
 Rivera also argues that even assuming the validity of the Promissory Note,
demand was still necessary for him to be liable and Section 70 of the Negotiable
Instruments Law does not apply.

ISSUE:
1. Whether or not the Promissory Note was Valid.
2. Whether or not the demand is still necessary hence the Negotiable Instruments
law does not apply.

RULING:
1. The Promissory not was valid. Fact of forgery cannot be presumed and it is
with Rivera that the burden of Proof applies. His bare testimony holds less
weight than that of a professional, trained, and practiced NBI witness stating
that the person who signed the promissory not is one and the same as the
person who signed the other documents that Rivera Presented to be his.
 No a demand is no longer necessary to hold Rivera Liable. The court agrees that
the Negotiable Instrument law does not apply since the promissory note is not a
negotiable instrument since it is made out to specific persons and not to order or
to bearer which is a requirement for a document to be a negotiable instrument
(Section 1.d of NIL).
 However, demand is still no longer necessary because under Article 1169 of the
Civil Code states that “Those obliged to deliver or to do something incur in delay
from the time the obligee judicially or extrajudicially demands from them the
fulfillment of their obligation. However, the demand by the creditor shall not be
necessary in order that delay may exist: (1) When the obligation or the law
expressly so declare; or (2) When from the nature and the circumstances of the
obligation it appears that the designation of the time when the thing is to be
delivered or the service is to be rendered was a controlling motive for the
establishment of the contract; or (3) When demand would be useless, as when the
obligor has rendered it beyond his power to perform. xxx.”
 Looking at the first condition, when the obligation so requires, and considering
that under the promissory note a stipulation of interest was expressed requiring
Rivera to pay 5% monthly interest in the event that he has not paid the debt by
Dec 31 1995, the date of default will now be on January 1, 1996. Rivera will now
be in a legal delay by January 1 1996 and therefor a demand is no longer
necessary.