44 PHIL 511



Ten Sen Guan ordered from Snow’s Ltd. ten cases of mercerized bastite to be shipped from New York to Manila.  Upon the arrival of the merchandise, a draft drawn by Snow’s Ltd. against Ten Sen Guan was presented to them for acceptance.  The delivery of the bill of lading and other documents were being  put  on  hold  pending  acceptance  of  the  draft  that  is  why  Ten  Sen Guan  accepted  the  same.    When  the  cases  were  opened  however,  it  was found  out  that  the  merchandise  wasn't  bastite  but  instead  were  burlap.  Ten  Sen  Guan  then  was  prompted  to  return  the  bill  of  lading  and  other documents  and  requested  Asia  Banking  Corporation,  the  agent  of  Snow Ltd.  to  cancel  its  acceptance,  which  the  corporation  promised  to  do  so.  However it didn't do good its promise since it sued Ten Sen Guan for the amount  of  the  draft.    The  trial  court  however  ruled  in  favor  of  Ten  Sen Guan.


It is undisputed that the defendants placed the order with Snow Ltd. for 10 cases  of  mercerized  bastite  and  that  the  draft  was  drawn  from  the corresponding value of 10 cases of mercerized bastite including incidental expenses.    That  when  the  cases  were  examined  it  was  found  out  that  it wasn't  bastite  but  instead  were  burlap,  of  which  the  corporation  was notified  and  that  Ten  Sen  Guan  refused  to  refused  the  goods.    The corporation alleges that it is a holder for value but it failed to prove such
allegation.  If indeed it was a holder for value, it could have easily proven such fact by competent evidence but it failed to do so.  It wasn't able to give an authentic account of the transactions.  It being a fact that it is not a  holder  for  value,  it  is  susceptible  to  any  defenses  available  to  Ten  Sen Guan.
According to the findings, the acceptance was conditional.   The draft was for  collection  and  also,  the  evidence  established  that  the  corporation  has released Ten Sen Guan from liability from the draft.