FACTS:

Petitioner  was  a  travel  agency  involved  in  ticket  sales  on  a  commission basis  for  and  on  behalf  of  different  airline  companies.    Miranda  has  a revolving  credit  line  with  the  company.    He  procured  tickets  on  behalf  of others and derived commissions from it.   
 
Petitioner  filed  a  collection  suit  against  Miranda  for  the  unpaid  amount  of six  checks.    Petitioner  alleged  that  Miranda  procured  tickets  from  them which he paid with cash and checks but the checks were dishonored upon presentment  to  the  bank.    This  was  being  refuted  by  Miranda  by  saying
that  he  actually  paid  for  his  obligations,  even  in  the  excess.    He  argued that  the  checks  were  for  accommodation  purposes  only.    The  company needed to show to its Board of Directors that its accounts receivable was in good standing.  The RTC and CA held Miranda not to be liable.
 

HELD:

Reliance  by  the  lower  and  appellate  court  on  the  company’s  financial statements were wrong, to see if Miranda was liable or not.  This financial statements were actually not updated to show that there was indebtedness on  the  part  of  Miranda.    The  best  evidence  that  the  courts  should  have looked at were the checks itself.  There is a prima facie presumption that a check  was  issued  for  valuable  consideration  and  the  provision  puts  the burden upon the drawer to disprove this presumption.  Miranda was unable to relieve himself of this burden.
 
Only clear and convincing evidence and not mere self-serving evidence of drawer  can  rebut  this  presumption.    The  company  was  entitled  to  the benefit  conferred  by  the  statutory  provision.    Miranda failed  to  show  that the checks weren’t issued for any valuable consideration.  The checks were
clear  by  stating  that  the  company  was  the  payee  and  not  a  mere accommodated  party.    And  also,  notice  was  given  to  the  fact  that  the checks  were  issued  after  a  written  demand  by  the  company  regarding Miranda’s unpaid liabilities.