Navoa v. CA Case Digests

Navoa v. CA G.R. No. 59255

December 29, 1995

OLIVIA M. NAVOA and ERNESTO NAVOA, petitioners, vs. COURT OF APPEALS, TERESITA DOMDOMA and EDUARDO DOMDOMA, respondents. Facts: Domdoma gave Olivia Navoa a loan. The first instance is when Teresita gave Olivia a diamond ring valued at 15,000.00 which was secured by a PCIB check under the condition that if the ring was not returned within 15 days from August 15, 1977 the ring is considered sold. Teresita attempted to deposit the check on November 1977 but the check was not honored for lack of funds. After this instance, there were other loans, totaling of 6 loans, of various amounts that were extended by Teresita to Olivia, These loans were secured by PCIB checks, which were all dated to 1 month after the loan. All these checks were not honored under the same reason as the first loan. Statement of the Case On 17 December 1977 private respondents filed with the Regional Trial Court of Manila an action against petitioners for collection of various sums of money based on loans obtained by the latter. On 3 January 1978 petitioners filed a motion to dismiss the complaint on the ground that the complaint stated no cause of action and that plaintiffs had no capacity to sue. The trial court dismissed the case and the motion to reconsider the dismissal was denied. Private respondents appealed to the Court of Appeals which modified the order of dismissal "by returning the records of this case for trial on the merits, Issue Was the decision of the RTC to dismiss the case due to having no cause of action valid? Ruling NO A cause of action is the fact or combination of facts which affords a party a right to judicial interference in his behalf. For the first loan it is a fact, that the ring was considered sold to Olivia Navoa 15 days after August 15, 1977, and even then, Olivia Navoa failed to pay the price for the

ring when the payment was due because of the check issued that was not honored. Thus it is confirmed that Teresita’s right under the agreement was violated. The other loans extended by Teresita to Olivia were all secured by PCIB checks. It can be inferred that since the checks were all dated to 1 month after the loan, it follows that the loans are then payable 1 month after they were contracted, and also these checks were dishonored by the bank for lack of funds. Olivia and Ernesto Navoa failed to make good the checks that were issued as payment for their obligations. The continuing refusal of Olivia and Ernesto Navoa to comply with the demand of payment shows the existence of a cause of action. All the loans granted to petitioners are secured by corresponding checks dated a month after each loan was obtained. In this regard, the term security is defined as a means of ensuring the enforcement of an obligation or of protecting some interest in property. It may be personal, as when an individual becomes a surety or a guarantor; or a property security, as when a mortgage, pledge, charge, lien, or other device is used to have property held, out of which the person to be made secure can be compensated for loss. Security is something to answer for as a promissory note. That is why a secured creditor is one who holds a security from his debtor for payment of a debt. From the allegations in the complaint there is no other fair inference than that the loans were payable one month after they were contracted and the checks issued by petitioners were drawn to answer for their debts to private respondents. The trial court erred in dismissing the case on the ground of lack of cause of action. Respondent Court of Appeals therefore is correct in remanding the case to the trial court for the filing of an answer by petitioners and to try the case on the merits. Dispositive Portion WHEREFORE, the petition is DENIED. The judgment of the Court of Appeals dated 11 December 1980 remanding the case to the trial court for the filing of petitioners' answer and thereafter for trial on the merits is AFFIRMED. Costs against petitioners.