TAN TIONG TICK, PETITIONER, VS. PHILIP MANUFACTURING CORPORATION (FORMERLY HENG TONG TEXTILE CO), RESPONDENTS.

This is an appeal by certiorari against a decision of the Court of
Appeals, affirming that of the Court of First Instance of Manila, Hon.
Antonio G. Lucero, presiding, sentencing the defendant-appellant Tan
Tiong Tick to pay plaintiff-appellee the sum of P20,000.00, with
interest thereon at the rate of six per cent per annum from the filing
of the complaint.

The basic facts are, as found by the Court of Appeals, as follows:

“The following facts are undisputed: Ernesto
Tan-Chi, vice-president of the plaintiff corporation, and the defendant
Tan Tiong Tick were friends of long standing whose business relations
started before. the war and continued after the liberation. Sometime in
1951 the plaintiff corporation, through one Andres Roldan. Lao., now
deceased, sales manager of an affiliate firm, saw an opportunity to buy
textile goods from a certain Lucilo Macaraig, who had the necessary
import license and dollar allocation for that purpose but did not have
sufficient funds to finance the importation. The plaintiff was willing
to advance the sum, of P20,000.00 but did not know Macaraig well-enough
to give him the money outright. So what the plaintiff did was to issue
a check for the said amount, payable to the defendant Tan Tiong Tick.
This check, marked Exhibit B-l, was drawn on the China Banking
Corporation and dated March 21, 1951. It was indorsed by the defendant
and cashed, and the proceeds turned over to Lucilo Macaraig. The
latter, however, failed to deliver the textiles which he was supposed
to order and on April 14, 1958 the plaintiff instituted the present
action against the defendant for the collection of the face value of
the check, with interest at 6% from March 21, 1951, plus damages,
attorney’s fees and costs.”

The appellee’s theory about the nature of the terms of the agreement
about the P20,000.00 check payable to appellant, is, as stated by the
Court of Appeals, as follows:

“The plaintiff’s theory is that the check was made
out in the defendant’s name pursuant to an agreement between him and
Ernesto Tan-Chi to the effect that since Macaraig was well known to the
defendant but not to the plaintiff the former would assume
responsibility for the amount thus advanced on condition that the
profits to be realized from the transaction would be shared equally
between, them, that is ½ for the plaintiff and ½ for the defendant. The
latter’s theory, on the other hand, is that there was no such
agreement, that the transaction was exclusively between the plaintiff
and Lucilo Macaraig, and that the defendant signed on the back of the
check merely as a witness to the encashment thereof and to the delivery
of the money to Macaraig .”

While that of the defendant-appellant is as follows:

“The defendant’s theory that the check Exhibit B-1
was made out in his name by the plaintiff and that he signed it on the
back simply because the plaintiff wanted a witness to its encashment
and to the delivery of the money to Lucilo Macaraig and because the
latter did not wish to accept a check but wanted cash instead is really
entitled to less consideration and credence than, has been accorded to
it in the decision, sought to be reconsidered. For if that was the only
reason, there was no need to bother the defendant Tan Tiong Tick at
all. The plaintiff could have made the check payable directly to
Macaraig and the latter endorsement thereof would be sufficient proof
of his receipt of the amount without the necessity of any witness; or
if Macaraig wished that cash be ‘given to him Tan-Chi himself could
have cashed a check an the bank, delivered the money directly to
Macaraig and required the latter to sign the corresponding receipt,
with any person from the plaintiff’s office signing as a witness. The
procedure actually adopted, that is, issuing the check in the Dame of
Tan Tiong Tick and having him indorse it was not only unnecessary but
also too devious and round about to be resorted to for the purpose
alleged by the defendant. And being the experienced businessman that he
was, the defendant would hardly have agreed to sign the check as payee
and indorser if his intention was only to act as witness, since he knew
that he would be liable or accountable to the drawer by indorsing and
having it cashed in the bank.”

The Court of Appeals, sustaining the findings of the trial court,
found plaintiff-respondent’s theory more credible, i.e., that
plaintiff’s witness Tan Chi delivered the P20,000.00 check payable to
Tan Tiong Tick, to the latter, under an agreement that the amount of
the check was to be given to Macaraig in payment of textiles and that
the profits to be derived from the investment was to be divided equally
between plaintiff-respondent and defendant-petitioner. It rejected the
latter’s theory that petitioner was merely a witness to the encashment
of the check. The reasons for the conclusion are: In defendant’s answer
it is alleged as special defense that Macaraig received the P20,000.00
in cash from defendant-petitioner; the check does not show that any one
else received the cash representing the face value thereof but the
payee or defendant himself; and the further fact that the books of
account of plaintiff-appellee contain an entry of the said sum an
indebtedness of the defendant from 1951 to 1958 and plaintiff’s
accountants have sent yearly to defendant-petitioner confirmation slips
of said indebtedness.

The first two issues raised by counsel for defendant-petitioner in
their brief, namely, that no written permission or resolution of the
respondent corporation was shown authorizing its Vice-President to
enter into the transaction in question, and that the transaction was
null and void— both questions were never raised in the court below;
hence they may not be raised for the first time in this Court.

The second issue is petitioner’s claim that the transaction
involving the delivery of the check and its encashment was merely an
agreement of guaranty entered into by the defendant-petitioner with Tan
Chi. Neither was this defense ever raised in the petitioner’s answer in
the Court of First Instance. This issue seems to be made to depend on
the testimony of defendant-petitioner, that he did not himself cash the
check but only endorsed it and gave it to another for encashment. But
the petitioner’s testimony to that effect was found by the Court of
Appeals to be untrue because the check appears to have been cashed by
the petitioner himself.

It is also argued on behalf of petitioner that the lack of a written
agreement on the understanding between petitioner and Tan Chi on such a
big amount as P20,000.00 militates against the conclusion that the
promise of petitioner to respond for the amount was actually made. But
the promise of petitioner was sufficiently proved by the testimony of
Tan Chi and the other facts and circumstances.

It is also claimed that the long period of time that lapsed before
the suit to collect, creates a presumption against the existence of the
agreement. No such presumption could arise because the account was
carried in the books of respondent corporation and notice thereof was
given every year for confirmation by respondent’s accountants.

Finding no merit in the arguments of petitioner’s counsel the appeal
should be, as it is hereby, dismissed, and the decision appealed from,
affirmed. With costs. So ordered.

Bengzon, C. J., Padilla, Bautista Angelo, Concepción, Reyes, J. B. L., Barrera, Paredes, Dizon and Regala, JJ., concur,