ASIA BANKING CORPORATION V. TEN SEN GUAN
44 PHIL 511
FACTS:
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.HELD:
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 suchallegation. 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.
