Beruflich Dokumente
Kultur Dokumente
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
Negotiability
FACTS:
Enrique Montinola sought to purchase from the Manila Post Office 10
money orders (P200 each), offering to pay for them with a private check.
Montinola was able to leave the building with his check and the 10 money
orders without the knowledge of the teller. Upon discovery, message was
sent to all postmasters and banks involving the unpaid money orders. One
of the money orders was received by the Philippine Education Co. as part
of its sales receipt. It was deposited by the company with the Bank of
America, which cleared it with the Bureau of Post. The Postmaster,
through the Chief of the Money Order Division of the Manila Post Office
informed the bank of the irregular issuance of the money order. The bank
debited the account of the company. The company moved for
reconsideration.
ISSUE:
Whether postal money orders are negotiable instruments
HELD:
Philippine postal statutes are patterned from those of the United States,
and the weight of authority in said country is that Postal money orders are
not negotiable instruments inasmuch as the establishment of a postal
money order is an exercise of governmental power for the publics benefit.
Furthermore, some of the restrictions imposed upon money order by
postal laws and regulations are inconsistent with the character of
negotiable instruments. For instance, postal money orders may be
withheld under a variety of circumstances, and which are restricted to not
more than one indorsement.
Dela Cruz lost all the CTDs in March 1982 and informed the
manager of Security Bank. The manager arranged for the
replacement of the lost CTDs upon compliance of Dela Cruz to
their bank procedure which entails execution of a notarized
Affidavit of Loss.
Upon replacement of the allegedly lost CTDs, Dela Cruz obtained a
loan of P875,000 from same bank. He then executed a notarized
Deed of Assignment of Time Deposit, surrendering to the bank full
control of the time deposit account, allowing the latter to apply the
said time deposits to the payment of whatever amounts may be
due on the loan upon maturity.
On the other hand, in November 1982, Mr. Aranas, the credit
manager of Caltex, presented to Security Bank for verification the
CTDs declared lost by Dela Cruz. Aranas claimed that the same
were delivered to Caltex as security for purchases made.
Accordingly, Security Bank rejected Caltexs demand for the
payment of the value of the CTDs.
In April 1983, the loan of Dela Cruz with the Security Bank
matured and the latter applied the time deposits in question as
payment of the matured loan.
Caltex then filed a complaint demanding payment of the value of
the CTDs plus accrued interest and compounded interest.
The Regional Trial Court dismissed the case. The Court of Appeals
also dismissed the case.
ISSUE(S):
1. Whether or not the subject Certificates of Time Deposit are
negotiable instruments
2. Whether or not Caltex can recover the value of the CTDs
HELD:
1. YES. A sample text of the CTD states: This is to Certify that B E A
R E R has deposited in this Bank the sum of PESOS: FOUR
THOUSAND ONLY, SECURITY BANK SUCAT OFFICE P4,000 & 00
CTS Pesos, Philippine Currency, repayable to said depositor 731
days. After date, upon presentation and surrender of this
certificate, with interest at the rate of 16% per cent per annum.
Section 1 of the NIL requires among others, that for an instrument
to be negotiable, it must be payable to the order or to bearer (par.
1 |C a b u c h a n . N e g o C a s e D i g e s t s
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
2 |C a b u c h a n . N e g o C a s e D i g e s t s
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
HELD:
No, respondent bank should not be held liable. Petitioner admitted that
the withdrawal slips in question were non-negotiable. Hence, the rules
governing the giving of immediate notice of dishonor of negotiable
instruments do not apply in this case. Thus, respondent bank was under
no obligation to give immediate notice that it would not make payment on
the subject withdrawal slips. The essence of negotiability which
characterizes a negotiable paper as a credit instrument lies in its freedom
to circulate freely as a substitute for money. The withdrawal slips in
question lacked this character.
Citibank should have known that withdrawal slips were not negotiable
instruments. Citibank was not bound to accept the withdrawal slips as a
valid mode of deposit. But having erroneously accepted them as such,
Citibank and petitioner as account-holder must bear the risks
attendant to the acceptance of these instruments. Petitioner and Citibank
could not now shift the risk and hold private respondent liable for their
admitted mistake.
Payable to Bearer
Ang Tek Lian v. Court of Appeals
87 SCRA 383 || Payable to Bearer
Complete but Undelivered
Development Bank of Rizal vs. Sima Wei
GR 85419 || Complete but undelivered. (Section 16 of Negotiable
Instruments Law)
Facts:
Sima We executed and delivered to the Development Bank of Rizal(DBR) a
promissory note, engaging to pay DBR or order the amount of
P1,820,000.00 with interest at 32% per annum. Sima Wei made partial
payments on the note, leaving a balance of P1,032,450.02. Sima Wei
issued two crossed checks payable to DBR drawn against China Banking
Corporation, bearing respectively the serial numbers 384934, for the
amount of P550,000.00 and 384935, for the amount of P500,000.00. The
said checks were allegedly issued in full settlement of the drawer's
account evidenced by the promissory note. These two checks were not
delivered to DBR or to any of its authorized representatives. For reasons
not shown, these checks came into the possession of Lee Kian Huat, who
deposited the checks without DBR's indorsement (forged or otherwise) to
the account of the Asian Industrial Plastic Corporation, at the Balintawak
branch, Caloocan City, of the Producers Bank. Cheng Uy, Branch Manager
3 |C a b u c h a n . N e g o C a s e D i g e s t s
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
of the legal right or rights of another. The essential elements are: (1) legal
right of the plaintiff; (2) correlative obligation of the defendant; and (3) an
act or omission of the defendant in violation of said legal right.
Liability of Persons Signing
Philippine Bank of Commerce v. Aruego
102 SCRA 530 || Section 20
FRANSISCO V. COURT OF APPEALS
319 SCRA 354 || Section 20
FACTS:
A. Fransisco Realty and Development and Herby Commercial and
Construction Corporation entered into a Land Development and
Construction Contract. Fransisco was the president of AFRDC while
Ong was the president of HCCC. It was agreed upon that HCCC
would undertake the construction of housing units and the development
of a large parcel of land. The payment would be on a turnkey basis. To
facilitate the payment, AFDRC executed a Deed of Assignment to
enable the HCCC to collect payments from the GSIS. Further, they
opened an account with a bank from which checks would be issued by
Fransisco and the GSIS president.
HCCC later on filed a complaint for the unpaid balance in pursuance to its
agreement with AFRDC. However, an amicable settlement ensued, which
was embodied in a Memorandum of Agreement. It was embodied in said
agreement that GSIS recognizes its indebtedness to HCCC and that HCCC
would also pay its obligations to AFRDC. A year later, it was found out
that Diaz and Fransisco had drawn checks payable to Ong. Ong denied
accepting said checks and it was further found out that Diaz entrusted
the checks to Fransisco who later forged the signature of Ong, showing
that he indorsed the checks to her and then she deposited the checks to
her personal savings account. This incident prompted Ong to file a
complaint against Fransisco.
HELD:
Ongs signature was found to be forged by Fransisco. Fransiscos
contention that he was authorized to sign Ongs name in her favor
giving her authority to collect all the receivables of HCCC from GSIS. This
contention is bereft of any merit. The Negotiable Instruments Law
provides that when a person is under obligation to indorse in a
representative capacity, he may indorse in such terms as to negative
personal liability. An agent, when so signing, should indicate that he is
4 |C a b u c h a n . N e g o C a s e D i g e s t s
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
FACTS:
Petitioner deposited 10 checks in its current account with BPI. The checks
which were acquired by petitioner from Ramirez, a sales agent of the
Inter-Island Gas were all payable to Inter-Island Gas Service, Inc. or
order. After the checks had been submitted to Inter-bank clearing, InterIsland Gas discovered that all the indorsements made on the checks
purportedly by its cashiers were forgeries. BPI thus debited the value of
the checks against petitioner's current account and forwarded to the latter
the checks containing the forged indorsements which petitioner refused
to accept.
ISSUE:
Whether BPI had the right to debit from petitioner's current account the
value of the checks with the forged indorsements
RULING:
BPI acted within legal bounds when it debited the petitioner's
account. Having indorsed the checks to respondent bank, petitioner is
deemed to have given the warranty prescribed in Section 66 of the NIL
that every single one of those checks "is genuine and in all respects what it
purports to be." Respondent which relied upon the petitioner's warranty
should not be held liable for the resulting loss.
ISSUE:
Whether or not PNB should restore the said amount
HELD:
No. MWSS is precluded from setting up the defense of forgery. It has been
proven that MWSS has been negligent in supervising the printing of its
personalized checks. It failed to provide security measures and coordinate
the same with PNB. Further, the signatures in the forged checks appear to
be genuine as reported by the National Bureau of Investigation so much so
that the MWSS itself cannot tell the difference between the forged
signature and the genuine one. The records likewise show that MWSS
failed to provide appropriate security measures over its own records
thereby laying confidential records open to unauthorized persons. Even if
the twenty-three (23) checks in question are considered forgeries,
5 |C a b u c h a n . N e g o C a s e D i g e s t s
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
FACTS:
Natividad Gempesaw owns and operates four grocery stores in Caloocan
City. She maintains a checking account with respondent drawee Phil. Bank
of Communications to issue checks to her suppliers. Alicia Galang, her
bookkeeper, makes the checks and petitioner signs them, without
verifying the accuracy of each, since she trusted Galang. Petitioner never
bothered to verify the correctness of the returned checks. In 2 years, a
total of 82 checks were issued, most of them in excess of her actual
obligations to the various payees, all crossed checks with forged
indorsement signatures. Petitioner completed the checks by signing them
as drawer and thereafter authorized her employee Alicia Galang to deliver
the eighty-two (82) checks to their respective payees. Instead of issuing
the checks to the payees as named in the checks, Alicia Galang delivered
them to the Ernest Boon, Chief Accountant of PBCOM Buendia branch.
Signatures of the first payees as first indorsers were forged. The checks
were then indorsed a 2nd time with the names of Alfredo Romero and
Benito Lam and donated to their respective accounts. It was only after 2
years that petitioner found out about the fraudulent transactions.
Petitioner then demanded respondent drawee Bank to credit her account
with the money value of the 82 checks for having been wrongfully charged
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
7 |C a b u c h a n . N e g o C a s e D i g e s t s
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
Metro Bank immediately sent the cash check to the Clearing House of the
Central Bank with the following words stamped at the back of the check:
Metropolitan Bank and Trust Company Cleared (illegible) office All prior
endorsements and/or Lack of endorsements Guaranteed.
The check was cleared the same day. Private respondent paid petitioner
through clearing the amount of P50,000.00, and Sales was credited with
the said amount in his deposit with Metro Bank.
August 26, 1964: Sales made his 1st withdrawal of P480.00 from his
current account
August 28, 1964: he withdrew P32,100.00
August 31, 1964: he withdrew the balance of P17,920 and closed his
account with Metro Bank
September 3, 1964: FNCB returned cancelled Check to drawer Joaquin
Cunanan & Company, together with the monthly statement of the
company's account with FNCB.
notified FNCB that the check had been altered
actual amount of P50.00 was raised to P50,000.00
name of the payee, Manila Polo Club, was superimposed the word CASH.
September 10, 1964: FNCB wrote Metro Bank asking for reimbursement
June 29, 1965: FNCB filed for recovery
CA affirmed Trial Court: Metro Bank to reimburse FNCB
ISSUE:
Whether or not Metrobank should reimsburse FNCB for the altered
amount as indorser
HELD:
NO. FNCB liable. Under the procedure prescribed, the drawee bank
receiving the check for clearing from the Central Bank Clearing House
must return the check to the collecting bank within the 24-hour period if
the check is defective for any reason. - FNCB failed to do so
indorsement must be read together with the 24-hour regulation on
clearing House Operations of the Central Bank
Metro Bank can not be held liable for the payment of the altered check.
Moreover, FNCB did not deny the allegation of Metro Bank that before it
allowed the withdrawal of the balance of P17,920.00 by Salvador Sales,
Metro Bank withheld payment and first verified, through its Assistant
Cashier Federico Uy, the regularity and genuineness of the check deposit
from Marcelo Mirasol, Department Officer of FNCB, because its (Metro
Bank) attention was called by the fast movement of the account.
FACTS:
GR
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
ISSUE:
Whether or not Republic, as the collecting bank, is protected, by the 24hour clearing house rule, found in CB Circular No. 9, as amended, from
liability to refund the amount paid by FNCB, as drawee of the SMC
dividend check
HELD:
FACTS:
Ramon Ilusorio vs CA
GR no. 139130 II FORGERY
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
FACTS:
Samsung Construction held an account with Far East Bank. One day a
check worth (P999,500.00), payable to cash, was presented by
one Roberto Gonzaga in the Makati Branch of Far East Bank. The
check was certified to be true by Jose Sempio III, the assistant
accountant of Samsung, who was also present during the time the
check was cashed. Later however it was discovered that no such check
was ever approved by the Samsungs head accountant, the president of the
company also never signed any such check.
ISSUE:
Whether or not Far East Bank is liable to reimburse Samsung for cashing
out the forged check, which was drawn from the account of Samsung
HELD:
Far East Bank is liable for reimbursement. Sec. 23 of the Negotiable
Instrument Law states that a forged signature makes the instrument
wholly inoperative. If payment is made the drawee (Far East) cannot
charge it to the drawers account (Samsung). The fact that the forgery is
clever is immaterial. The forged signature may so closely resemble the
genuine as to defy detection by the depositor himself. And yet, if the bank
pays the check, it is paying out with its own money and not of the
depositors. This rule of liability can be stated briefly in these words: A
bank is bound to know its depositors signature. The accusation of
negligence on the part of Samsung was not clearly proven. Absence of
proof to the contrary, the presumption is that the ordinary course of
business was followed.
Material Alteration
Philippine National Bank v. CA
256 SCRA 491 || Sections 124 &125
ENRIQUE P MONTINOLA VS THE PHILIPPINE NATIONAL BANK
G.R. NO L-2861 || SECTION 124 & 125
FACTS:
On April 30, 1942, M. V.Ramos, as a disbursing officer of an army
division of the USAFE, went to the neighboring Province Lanao to procure
a cash advance in the amount of P800,000 for the use of the USAFFE in
Cagayan de Misamis. Pedro Encarnacion, Provincial Treasurer of Lanao
did not have that amount in cash. So, he gave Ramos P300,000 in
emergency notes and a check for P500,000. On May 2, 1942 Ramos went
to the office of Provincial Treasurer Laya at Misamis Oriental to encash
the check for P500,000 which he had received from the Provincial
Treasurer of Lanao. Laya did not have enough cash to cover the check so
he gave Ramos P400,000.00 in emergency notes and a check No. 1382 for
P100,000.00 drawn on the Philippine National Bank. According to Laya he
had previously deposited P500,000.00 emergency notes in the Philippine
National Bank branch in Cebu and he expected to have the check issued by
10 |C a b u c h a n . N e g o C a s e D i g e s t s
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
him
cashed
in
Cebu
against
said
deposit.
Ramos was unable to encash the said check for he was captured by
the Japanese. But after his release, he sold P30,000.00 of the check to
Enrique P. Montinola for P850,000.00 Japanese Military notes, of which
only
P45000
was
paid
by
the
latter. The writing made by Ramos at the back of the check was to t
he effect that he was assigning only P30,000.00 of the value of the
document with an instruction to the bank to pay P30,000.00 to Montinola
and
to
deposit
the
balance to Ramos's credit. This writing was, however, mysteriously
obliterated and in its place, a supposed endorsement appearing on the
back of the check was made for the whole amount of the check. At the time
of
the transfer of this check to Montinola, the check was long overdue
by about 2-1/2 years.
Montinola instituted an action against the PNB and the Provincial
Treasurer
of Misamis Oriental to collect the sum of P100,000, the amount of th
e aforesaid check. There now appears on the face of said check the words
in parenthesis "Agent, Phil. National Bank" under the signature of Laya
purportedly showing that Laya issued the check as agent of the Philippine
National Bank.
ISSUE:
HELD:
No. It was not negotiated according to the Negotiable Instruments
Law (NIL) hence it is not a negotiable instrument. There was only a partial
indorsement and not a negotiation contemplated under the NIL. Only
P30k of the P100k amount of the check was indorsed. This merely make
Montinola a mere assignee and this is the clear intent of Ramos. Ramos
was merely assigning P30k to Montinola. Montinola may therefore not be
regarded as an indorsee and PNB has all the right to dishonor the check.
As mere assignee, he is subject to all defenses available to the drawer
Provincial Treasurer of Misamis Oriental and against Ramos.
Anent the issue of alteration, the apparent purpose of which is to make the
drawee (PNB) the drawer against which Montinola can recover from
directly. Such material alteration which was done by Montinola without
11 |C a b u c h a n . N e g o C a s e D i g e s t s
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
although such holder at the time of taking the instrument knew him to be
only an accommodation party, does not include nor apply to corporations
which are accommodation parties. This is because the issue or
indorsement of negotiable paper by a corporation without consideration
and for the accommodation of another is ultra vires. Hence, one who has
taken the instrument with knowledge of the accommodation nature
thereof cannot recover against a corporation where it is only an
accommodation party. If the form of the instrument, or the nature of the
transaction, is such as to charge the indorsee with knowledge that the
issue or indorsement of the instrument by the corporation is for the
accommodation of another, he cannot recover against the corporation
thereon.
By way of exception, an officer or agent of a corporation shall have
the power to execute or indorse a negotiable paper in the name of the
corporation for the accommodation of a third person only if specifically
authorized to do so. Corollarily, corporate officers, such as the president
and vice-president, have no power to execute for mere accommodation a
negotiable instrument of the corporation for their individual debts or
transactions arising from or in relation to matters in which the
corporation has no legitimate concern. Since such accommodation paper
cannot thus be enforced against the corporation, especially since it is not
involved in any aspect of the corporate business or operations, the
inescapable conclusion in law and in logic is that the signatories thereof
shall be personally liable therefor, as well as the consequences arising
from their acts in connection therewith. The fact that for lack of capacity
the corporation is not bound by an accommodation paper does not
thereby absolve, but should render personally liable, the signatories of
said instrument where the facts show that the accommodation involved
was for their personal account, undertaking or purpose and the creditor
was aware thereof.
Stelco Marketing v. CA
210 SCRA 51 || Accomodation Party
Travel-On v. CA
210 SCRA 352 || Accomodation Party
BPI vs. Court of Appeals
326 SCRA 641|| Accommodation Party
FACTS:
13 |C a b u c h a n . N e g o C a s e D i g e s t s
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
FACTS
Respondent Jose Go, on December 29, 1983, purchased from Associated
Bank Cashier's Check No. 011302 for P800,000.00. Unfortunately, Jose Go
left said check on the top of the desk of the bank manager when he left the
bank. The bank manager entrusted the check for safekeeping to a bank
official, a certain Albert Uy, who had then a visitor in the person of
Alexander Lim, Uy had to answer a phone call on a nearby telephone after
which he proceeded to the men's room. When he returned to his desk, his
visitor Lim was already gone. When Jose Go inquired for his cashier's
check from Albert Uy, the check was not in his folder and nowhere to be
found. The latter advised Jose Go to go to the bank to accomplish a "STOP
PAYMENT" order, which suggestion Jose Go immediately followed. He also
executed an affidavit of loss. Albert Uy went to the police to report the loss
of the check, pointing to the person of Alexander Lim as the one who could
shed light on it.
The records of the police show that Associated Bank received the lost
check for clearing on December 31, 1983, coming from Prudential Bank,
Escolta Branch. The check was immediately dishonored by Associated
Bank by sending it back to Prudential Bank, with the words "Payment
Stopped" stamped on it. However, the same was again returned to
Associated Bank on January 4, 1984 and for the second time it was
dishonored. Several days later, respondent Associated Bank received a
letter, dated January 9, 1984, from a certain Atty. Lorenzo Navarro
demanding payment on the cashier's check in question, which was being
held by his client. He however refused to reveal the name of his client and
threatened to sue, if payment is not made. Respondent bank, in its letter,
dated January 20, 1984, replied saying the check belonged to Jose Go who
lost it in the bank and is laying claim to it.
Respondent Associated Bank on February 2, 1984 filed an action for
Interpleader naming as respondent, Jose Go and one John Doe, Atty.
Navarro's then unnamed client. On even date, respondent bank received
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
not the one who did it but Jose Go, the owner of the check. Respondent
bank could not be drawer and drawee for clearly, Jose Go owns the money
it represents and he is therefore the drawer and the drawee in the same
manner as if he has a current account and he issued a check against it; and
from the moment said cashier's check was lost and or stolen no one
outside of Jose Go can be termed a holder in due course because Jose Go
had not indorsed it in due course. The check in question suffers from the
infirmity of not having been properly negotiated and for value by
respondent Jose Go who as already been said is the real owner of said
instrument.
HELD:
The court held that respondent Sambok Motors Company is not a qualified
indorser. A qualified indorserment constitutes the indorser a mere
assignor of the title to the instrument. It may be made by adding to the
indorsers signature the words without recourse or any words of similar
import. Such indorsement relieves the indorser of the general obligation
to pay if the instrument is dishonored but not of the liability arising from
warranties on the instrument as provided by section 65 of NIL. However,
Sambok indorsed the note with recourse and even waived the notice of
demand, dishonor, protest and presentment.
ISSUE:
Whether or not respondent Sambok Motors Company is a qualified
indorser and thus, is not liable upon the failure of payment of the maker
Maralit v. Imperial
301 SCRA 605 (1999) || Liability of General Indorser
Sapiera v. CA
301 SCRA 605 (1999) || Liability of General Indorser
BPI v. CA and Napiza
GR No. 11239 || Liability of General Indorser
Presentment for Payment/Acceptance
PRUDENTIAL BANK vs. INTERMEDIATE APPELLATE COURT,
PHILIPPINE RAYON MILLS, INC. and ANACLETO R. CHI
G.R. No. 74886 December 8, 1992 || (Presentment for acceptance)
FACTS:
Philippine Rayon Mills, Inc. entered into a contract with Nissho Co.,
Ltd. of Japan for the importation of textile machineries under a five-year
deferred payment plan. To effect payment for said machineries, Philippine
Rayon Mills opened a commercial letter of credit with the Prudential Bank
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and Trust Company in favor of Nissho. Against this letter of credit, drafts
were drawn and issued by Nissho, which were all paid by the Prudential
Bank through its correspondent in Japan. Two of these drafts were
accepted by Philippine Rayon Mills while the others were not. Petitioner
instituted an action for the recovery of the sum of money it paid to Nissho
as Philippine Rayon Mills was not able to pay its obligations arising from
the letter of credit. The lower court ordered PRMI to pay for the 2 drafts
which were accepted the 10 were not yet accepted and for Chi it was
dismissed. The Respondent court ruled that with regard to the ten drafts
which were not presented and accepted, no valid demand for payment can
be made. Petitioner however claims that the drafts were sight drafts which
did not require presentment for acceptance to Philippine Rayon.
ISSUE:
Whether presentment for acceptance of the drafts was indispensable to
make Philippine Rayon liable thereon
RULING:
NO. Petition GRANTED. Philippine Rayon Mills, Inc. liable on the
12 drafts. Anacleto R. Chi (as guarantor) secondarily liable on the trust
receipt. In the case at bar, the drawee was necessarily the herein
petitioner. It was to the latter that the drafts were presented for
payment. There was in fact no need for acceptance as the issued drafts
are sight drafts. Presentment for acceptance is necessary only in the
cases expressly provided for in Section 143 of the Negotiable Instruments
Law (NIL). The said section provides that presentment for acceptance
must be made:
(a) Where the bill is payable after sight, or in any other case, where
presentment for acceptance is necessary in order to fix the maturity of the
instrument; or
(b) Where the bill expressly stipulates that it shall be presented for
acceptance; or
(c) Where the bill is drawn payable elsewhere than at the residence
or place of business of the drawee.
In no other case is presentment for acceptance necessary in order
to render any party to the bill liable. Obviously then, sight drafts do not
require presentment for acceptance.
Wong vs. CA
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ISSUE:
SBCA-SOL 14-15
Agapay.Albarillo.Ambito.Arevalo.Baguilat.Bunag.Cabrera.Claveria.Escalona.Fernando.Ferrer.Flores.Hernando.Hipolito.Lara.Melgar.Mella.Nasam.Nunez.Retardo.Rodriguez.Soriano.Tamayao.Ubaldo
No. The Supreme Court reversed the decision of Court of Appeals. SIHI
cannot collect from BCCFI, because SIHI cannot be considered as a holder
in due course. BCCFI's defense in stopping payment is as good to SIHI as it
is to George King. Because, really, the checks were issued with the
intention that George King would supply BCCFI with the bales of tobacco
leaf. There being failure of consideration, SIHI is not a holder in due
course.
Consequently, BCCFI cannot be obliged to pay the checks. The foregoing
does not mean, however, that respondent could not recover from the
checks. The only disadvantage of a holder who is not a holder in due
course is that the instrument is subject to defenses as if it were nonnegotiable. 14 Hence, respondent can collect from the immediate indorser,
in this case, George King.
(Section 185) A check is defined by law as a bill of exchange drawn on a
bank payable on demand. There are a variety of checks, the more popular
of which are the memorandum check, cashier's check, traveler's check and
crossed check. Crossed check is one where two parallel lines are drawn
across its face or across a corner thereof. It may be crossed generally or
specially.
A check is crossed specially when the name of a particular banker or a
company is written between the parallel lines drawn. It is crossed
generally when only the words "and company" are written or nothing is
written at all between the parallel lines. It may be issued so that
presentment can be made only by a bank. Veritably the Negotiable
Instruments Law (NIL) does not mention "crossed checks," although
Article 541 9 of the Code of Commerce refers to such instruments.
Sps. George and Librada Moran v. Court of Appeals and Citytrust
Banking Corporation
GR No. 105836 || Section 185
FACTS:
George and Librada Moran are the owners of the Wack-Wack Petron
Gasoline station in Mandaluyong. They regularly purchased for bulk fuel
and other related products from Petrophil Corporation on COD basis. The
orders for bulk fuel and other products were made by telephone and
payments were effected by personal checks upon delivery. They had
several accounts with Citytrust. Petitioners, through Librada Moran, drew
two checks payable to Petrophil Corporation. Petrophil deposited the
checks to its account with PNB, who in turn PNB presented them for
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clearing on the same day. Records show that on that day, their current
account had a zero balance. The next day, George Librada transferred the
amount of the checks from their savings account with Citytrust to their
current account with the same bank. George was informed by Librada that
Petrophil refused to deliver their orders on a credit basis because the two
checks the had previously issued were dishonored due to insufficiency of
funds. The non-delivery of gasoline forced petitioners to temporarily stop
business operations. In addition, Petrophil cancelled their credit
accommodation, forcing them to pay for their purchases in cash. It turned
out that it was dishonored due to operational error to which the branch
manager acted on and personally present the checks in payment for the
two dishonored checks to Petrophil. Months after, George Moran learned
that Petrophil had received from Citytrust notifying them that the two
checks were inadvertently dishonored due to operational error.
Petitioners filed a complaint for damages against Citytrust claiming that
the banks dishonor of the checks caused them besmirched business and
personal reputation, shame and anxiety.
RTC Ruling: dismissed the complaint; Citytrust cannot be liable
CA Ruling: affirmed the decision of the RTC; Citytrust not liable
ISSUE:
Whether or not Citytrust should be held liable for the dishonor of the
checks
HELD:
The court held that Citytrust should not be held liable. A check is a bill of
exchange drawn on a bank payable on demand. Thus, a check is a written
order addressed to a bank or persons carrying on the business of banking,
by a party having money in their hands, requesting them to pay on
presentment, to a person named therein or to bearer or order, a named
sum of money. Where the bank possesses funds of a depositor, it is bound
to honor his checks to the extent of the amount of his deposits. The failure
of a bank to pay the check of a merchant or a trader, when the deposit is
sufficient, entitles the drawer to substantial damages without any proof of
actual damages. Conversely, a bank is not liable for its refusal to pay a
check on account of insufficient funds, notwithstanding the fact that a
deposit may be made later in the day. Before a bank depositor may
maintain a suit to recover a specific amount from his bank, he must first
show that he had on deposit sufficient funds to meet his demand.
Petitioner had no reason to complain, for they alone were at fault. A
FACTS:
Petitioner Ramon Tan had maintained an account with respondent banks
Binondo branch. He secured a Cashiers Check from the Philippine
Commercial Industrial Bank payable to his order. He deposited the check
in his account with RCBC. On the same day, RCBC erroneously sent the
same cashiers check for clearing to the Central Bank which was returned
for having been misspent or misrouted. The next day, RCBC debited the
amount covered by the same cashiers check from the account of the
petitioner. Respondent bank did not inform the petitioner of its action to
which he only learned of the claims 42 days after. Relying on common
knowledge that a cashiers check was as good as cash, petitioner issued
two personal checks in the name of Go Lac, without awaiting any
notification if it was cleared, which was returned twice for insufficiency of
funds. Tan filed a complaint against RCBC for damages. Tan contends that
there was negligence on the part of RCBC, therefore they should be held
liable. RCBC contended that it was merely acting as petitioners collecting
agent and it assumed no responsibility beyond care in selecting
correspondents under the theory that where a check is deposited with a
collecting bank the relationship created is that of agency and not creditordebtor, thus it cannot be held liable.
Trial Court Ruling: Ruled against RCBC and made them liable for moral
damages and exemplary damages but not for actual damages because Tan
failed to prove by any receipt or writing to underpin it.
Court of Appeals: Reversed the decision of the Trial court in that it was
the fault of Tan which led to his loss. First, it was the Tan who filled up the
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wrong deposit slip which led to the sending of the check to the Central
Bank when the clearing should have been made elsewhere. Second, the
bank actually tried to advise Tan that the check was misspent, but the
telephone number was no longer active. It was Tan who was under
obligation to inform RCBC of any changes in the telephone numbers to be
contacted. Third, the refusal of RCBC to credit the amount of P30,000.00 is
consistent with the accepted banking practice. It is clear that immediate
payment without awaiting clearance of a cashiers check is
discretionary with the bank to whom the check is presented and
such being the case, the refusal to allow it as in this case is not to be
equated with negligence in the basic perception that discretion is not
demandable as a right.
ISSUE:
Whether or not RCBC should bear the loss
HELD:
The court held that RCBC should bear the loss. RCBC insists that
immediate payment without awaiting clearance of a cashier's check is
discretionary with the bank to whom the check is presented and such
being the case, its refusal to immediately pay the cashier's check in this
case is not to be equated with negligence on its part. We find this
disturbing and unfortunate.
An ordinary check is not a mere undertaking to pay an amount of money.
There is an element of certainty or assurance that it will be paid upon
presentation that is why it is perceived as a convenient substitute for
currency in commercial and financial transactions. The basis of the
perception being confidence. Any practice that destroys that confidence
will impair the usefulness of the check as a currency substitute and create
havoc in trade circles and the banking community.
Now, what was presented for deposit in the instant cases was not just an
ordinary check but a cashier's check payable to the account of the
depositor himself. A cashier's check is a primary obligation of the issuing
bank and accepted in advance by its mere issuance. By its very nature, a
cashier's check is the bank's order to pay drawn upon itself, committing in
effect its total resources, integrity and honor behind the check. A cashier's
check by its peculiar character and general use in the commercial world is
regarded substantially to be as good as the money which it represents. In
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