Negotiable Instrument Cases June 30, 2013

8/12/2019 Negotiable Instrument Cases June 30, 2013

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THIRD DIVISION

[G.R. No. 115410. February 27, 1998]

JUAN CASABUENA,petitioner, vs. !N. C!UR" !F A##EA$S a%&S#!USES C'R'AC! UR(ANE"A AN( !FE$'A '#'$)UR(ANE"A, respondents.

( E C ' S ' ! NR!*ER!, J.+

A one hundred square meter (100 sq.m.) lot located at the NDC Comound !n Santa "esa# "an!la !sco$eted %& t'o hoeul art!es !n th!s et!t!on or Re$!e' on Certiorari. The r!$als are the sousesC!r!aco and Oel!a*I!l +rdaneta# %ene!c!ar!es o the ,-and o the -andless roram/ o the C!t& o"an!la# and uan Casa%uena# transeree o the r!ht# t!tle and !nterest o C!r!acos ass!nee# Arsen!a2en!n.

+rdaneta !s one o the ortunate rantees o a arcel o land urchased %& the C!t& o "an!la andcon$e&ed to !ts less r!$!leed !nha%!tants# throuh !ts land reorm roram.314 On Auust 15# 1678#+rdaneta ass!ned h!s r!hts and !nterests !n one*hal (195) o the lot to Arsen!a 2en!n co$er!n ull

a&ment o h!s !nde%tedness !n the amount o !$e hundred esos (800.00).354A deed o sale '!th

mortae3:4 'as e;ecuted# '!th +rdaneta underta0 equal !nstallments. On ?e%ruar& 17#167@# ater ha$!n !ncurred add!t!onal !nde%tedness !n the amount o t'o thousand esos (5#000.00)#

C!r!aco e;ecuted another deed o ass!nment3=4 !n$ol$!n the 'hole lot# '!th ass!nee 2en!n aree!nto shoulder all o%l!at!ons !nclud!n the a&ment o amort!at!on to the C!t !n accordance '!th the

contract %et'een !t and +rdaneta.384 The art!es $er%all& areed that +rdaneta could redeem the

roert& uon a&ment o the loan '!th!n three (:) &ears rom the date o ass!nmentB a!lure to a&'ould transer h&s!cal ossess!on o the lot to 2en!n or a er!od o !teen (18) &ears# '!thout actual

transer o t!tle and o'nersh! thereto.374A Transer Cert!!cate o T!tle 'as !ssued !n the name o

+rdaneta# marr!ed to Oel!a I!l.3@4

"ean'h!le# the adm!n!strat!on o the roert& 'as ass!ned to %rothers Cand!do and uan

Casa%uena#3>4 to 'hom 2en!n had transerred her r!ht# t!tle and !nterest or a cons!derat!on o se$enthousand !$e hundred esos (@#800.00). Not'!thstand!n th!s ass!nment# 2en!n constructed a t'o*door aartment on the lot searatel& occu!ed %& ose A%eero and uan Casa%uena# 'ho collectedrentals rom the ormer. Ater the lot 'as ull& a!d or %& the +rdanetas# a Release o "ortae 'ase;ecuted on ?e%ruar& @# 16>=# under 'h!ch deed the er!od o non*al!enat!on o the land 'as

e;tended rom !$e (8) &ears to t'ent& (50) &ears.364

?rom 16@: to 16@7# uan Casa%uena 'as 2en!ns rental collector.3104 The!r relat!onsh! soured#ho'e$er# comell!n the latter to name as adm!n!strator Anel Tanua

%u!ld!n.3114 ?!nd!n that the rece!ts !ssued %& Tanua
http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/115410.htm#_edn11


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deendant (et!t!oner here!n)# the c!t& court3154d!sm!ssed the comla!nt. A!rmed %& the Re!onal Tr!al

Court o "an!la#31:4 the dec!s!on 'as aa!n a!rmed %& the aellate court.31=4 H!s mot!on or

recons!derat!on ha$!n %een den!ed#3184 Tanua

+on learn!n o the l!t!at!on %et'een et!t!oner and 2en!n# +rdaneta as

Am!d the srout!n contro$ers!es !n$ol$!n the lot# the +rdaneta souses succeeded !n ha$!n theCourt declare them as !ts true and la'ul o'ners '!th the deed o ass!nment to 2en!n merel& ser$!nas e$!dence o C!r!acos !nde%tedness to her !n $!e' o the roh!%!t!on aa!nst the sale o the land!mosed %& the C!t& o$ernment.

On aeal# the aellate court a!rmed31@4 the !nd!ns o the lo'er court. A mot!on orrecons!derat!on 'as den!ed. +naed %& the rotracted l!t!!ous rocess# et!t!oner !les th!s et!t!onor re$!e' on cert!orar!# aru!n that the ass!nment %& 2en!n 'as made !n her caac!t& as cred!tor othe souses# thus allo'!n her to transer o'nersh! o the roert& to her ass!nees.

Can a deed o ass!nment transer o'nersh! o the roert& to the ass!nee

At the %ottom o th!s contro$ers& !s the und!suted act that C!r!aco +rdaneta 'as !nde%ted to 2en!n# tosecure 'h!ch de%t the souses ceded the!r r!hts o$er the land throuh a deed o ass!nment. Anass!nment o cred!t !s an areement %& $!rtue o 'h!ch the o'ner o a cred!t# 4 Stated s!ml !t !s the rocess o transerr!n the r!ht o the ass!nor to the ass!nee# 'ho'ould then %e allo'ed to roceed aa!nst the de%tor.3164 The ass!nment !n$ol$es no transer oo'nersh! %ut merel& eects the transer o r!hts 'h!ch the ass!nor has at the t!me# to theass!nee. 2en!n ha$!n %een deemed su%roated to the r!hts and o%l!at!ons o the souses# she

'as %ound %& e;actl& the same cond!t!ons to 'h!ch the latter 'ere %ound.3504 Th!s %e!n so# she andthe Casa%uenas 'ere %ound to resect the roh!%!t!on aa!nst sell!n the roert& '!th!n the !$e*&earer!od !mosed %& the C!t& o$ernment.

The act o ass!nment could not ha$e oerated to eace l!ens or restr!ct!ons %urden!n the r!ht

ass!ned#3514 %ecause an ass!nee cannot acqu!re a reater r!ht than that erta!n!n to the ass!nor.3554At most# an ass!nee can onl& acqu!re r!hts dul!cat!n those 'h!ch h!s ass!nor !s ent!tled %&

la' to e;erc!se. In the case at %ar# the Casa%uenas merel& steed !nto 2en!ns shoes# 'ho 'as notso much an o'ner as a mere ass!nee o the r!hts o her de%tors. Not ha$!n acqu!red an& r!ht o$erthe land !n quest!on# !t ollo's that 2en!n con$e&ed noth!n to deendants '!th resect to the roert&.

Eh!le !t !s true that the duplex !s o'ned %& 2en!n# the Casa%uenas m!sta


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the souses +rdaneta rema!n !ts o'ners# to the e;clus!on o et!t!oner.

EREF!RE, cons!der!n the oreo!n# the dec!s!on !s A??IR"FD. No costs.

S! !R(ERE(.

Reu%l!c o the h!l!!nes

SU#RE*E C!UR""an!la

SFCOND DIVISION

G.R. No. 7259- Ar/ -0, 1987

C!NS!$'(A"E( #$!!( 'N(US"R'ES, 'NC., ENR EE, a%& R!(!$F! ". ERGARA, et!t!oners#$s.'FC $EAS'NG AN( ACCE#"ANCE C!R#!RA"'!N, resondent.

Carpio, Villaraza & Cruz Law Offices for petitioners.

Europa, Dacanay & Tolentino for respondent.

GU"'ERRE3, JR., J.:

Th!s !s a et!t!on or cert!orar! under Rule =8 o the Rules o Court 'h!ch assa!ls on quest!ons o la' adec!s!on o the Intermed!ate Aellate Court !n AC*G.R. CV No. 7>706 dated ul& 1@# 16>8# as 'ell as!ts resolut!on dated Octo%er 1@# 16>8# den&!n the mot!on or recons!derat!on.

The antecedent acts culled rom the et!t!on are as ollo's

The et!t!oner !s a cororat!on enaed !n the lo!n %us!ness. It had or !ts roram o lo!nact!$!t!es or the &ear 16@> the oen!n o add!t!onal roads# and s!multaneous lo!n oerat!ons alonthe route o sa!d roads# !n !ts lo!n concess!on area at 2aana# "ana and Caraa# Da$aoOr!ental. ?or th!s urose# !t needed t'o (5) add!t!onal un!ts o tractors.

Con!ant o et!t!oner*cororat!ons need and urose# Atlant!c Gul J ac!!c Coman& o "an!la#throuh !ts s!ster coman& and mar# 16>0#. ==) and to determ!ne the caa%!l!t& o the K+sedK tractors %e!n oered# et!t!oner*cororat!onrequested the seller*ass!nor to !nsect the o% s!te. Ater conduct!n sa!d !nsect!on# the seller*ass!nor assured et!t!oner*cororat!on that the K+sedK All!s Cra'ler Tractors 'h!ch 'ere %e!n oered'ere !t or the o%# and a$e the corresond!n 'arrant& o n!net& (60) da&s erormance o themach!nes and a$a!la%!l!t& o arts. (t.s.n.# "a& 5># 16>0# . 86*77).

E!th sa!d assurance and 'arrant and rel&!n on the seller*ass!nors s

cororat!on throuh et!t!oners Eee and Verara# res!dent and $!ce* res!dent# resect!$el areedto urchase on !nstallment sa!d t'o (5) un!ts o K+sedK All!s Cra'ler Tractors. It also a!d the do'na&ment o T'o Hundred Ten Thousand esos (510#000.00).

On Ar!l 8# 16@># the seller*ass!nor !ssued the sales !n$o!ce or the t'o 5) un!ts o tractors (F;h. K:*AK). At the same t!me# the deed o sale '!th chattel mortae '!th rom!ssor& note 'as e;ecuted (F;h.K5K).

S!multaneousl& '!th the e;ecut!on o the deed o sale '!th chattel mortae '!th rom!ssor& note# theseller*ass!nor# %& means o a deed o ass!nment (F e;h. K 1 K)# ass!ned !ts r!hts and !nterest !n thechattel mortae !n a$or o the resondent.


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Immed!atel& thereater# the seller*ass!nor del!$ered sa!d t'o (5) un!ts o K+sedK tractors to theet!t!oner*cororat!ons o% s!te and as areed# the seller*ass!nor stat!oned !ts o'n mechan!cs tosuer$!se the oerat!ons o the mach!nes.

2arel& ourteen (1=) da&s had elased ater the!r del!$er& 'hen one o the tractors %ro# 16>0# . @6).

S!nce the tractors 'ere no loner ser$!cea%le# on Ar!l @# 16@6# et!t!oner Eee as.@1) '!th accrued !nterest o ONF H+NDRFD ?I?TM ONF THO+SAND SIH+NDRFD FIGHTFFN FSOS J >79100 (181#71>.#>7) as o Auust 18# 16@6 and accru!n !nterestthereater at the rate o 15L er annumB

5. order!n deendants to a& o!ntl& and se$erall& attorne&s ees equ!$alent to ten ercent (10L) othe r!nc!al and to a& the costs o the su!t.

Deendants countercla!m !s d!sallo'ed. (. =8*=7# Rollo)

On une ># 16>1# the tr!al court !ssued an order den&!n the mot!on or recons!derat!on !led %& theet!t!oners.


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Thus# the et!t!oners aealed to the Intermed!ate Aellate Court and ass!ned there!n the ollo'!nerrors

I

THAT THF -OEFR CO+RT FRRFD IN ?INDING THAT THF SF--FR AT-ANTIC G+-? ANDACI?IC CO"ANM O? "ANI-A DID NOT AROVF DF?FNDANTS*AF--ANTS C-AI" O?EARRANTM.

II

THAT THF -OEFR CO+RT FRRFD IN ?INDING THAT -AINTI??* AF--FF IS A HO-DFR IND+F CO+RSF O? THF RO"ISSORM NOTF AND S+FD +NDFR SAID NOTF AS HO-DFRTHFRFO? IN D+F CO+RSF.

On ul& 1@# 16>8# the Intermed!ate Aellate Court !ssued the challened dec!s!on a!rm!n in toto thedec!s!on o the tr!al court. The ert!nent ort!ons o the dec!s!on are as ollo's

;;; ;;; ;;;

?rom the e$!dence resented %& the art!es on the !ssue o 'arrant Ee are o the cons!dered o!n!onthat as!de rom the act that no ro$!s!on o 'arrant& aears or !s ro$!ded !n the Deed o Sale o thetractors and e$en adm!tt!n that !n a contract o sale unless a contrar& !ntent!on aears# there !s an

!ml!ed 'arrant the deense o %reach o 'arrant ! there !s an as !n th!s case# does not l!e !n a$oro the aellants and aa!nst the la!nt!*aellee 'ho !s the ass!nee o the rom!ssor& note and aholder o the same !n due course. Earrant& l!es !n th!s case onl& %et'een Industr!al roducts"ar0 other'!se


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either case. (Fmhas!s sul!ed)

et!t!oner# ha$!n un!laterall& and e;traud!c!all& resc!nded !ts contract '!th the seller*ass!nor#necessar!l& can no loner sue the seller*ass!nor e;cet %& 'a& o countercla!m ! the seller*ass!norsues !t %ecause o the resc!ss!on.

In the case o the +n!$ers!t& o the hilippines v. De los -n!eles (:8 SCRA 105) 'e held

In other 'ords# the art& 'ho deems the contract $!olated ma& cons!der !t resol$ed or resc!nded# andact accord!nl without previous court action, ut it proceeds at its own ris'. ?or !t !s onl& the !nal

udment o the corresond!n court that '!ll conclus!$el& and !nall& settle 'hether the act!on ta


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Th!s %e!n so# there 'as no need or the et!t!oner to !ml!ed the seller*ass!nor 'hen !t 'as sued %&the resondent*ass!nee %ecause the et!t!oners deenses al& to %oth or e!ther o e!ther othem.-ctually, the records show that even the respondent itself ad"itted to ein! a "ere assi!nee ofthe pro"issory note in $uestion, to wit%

ATTM. A-ACA

D!d 'e et !t r!ht rom the counsel that 'hat !s %e!n ass!ned !s the Deed o Sale '!th Chattel

"ortae '!th the rom!ssor& note 'h!ch !s as test!!ed to %& the '!tness 'as !ndorsed (Counsel orla!nt! nodd!n h!s head.) Then 'e ha$e no urther quest!ons on cross#

CO+RT

Mou con!rm h!s man!estat!on Mou are nodd!n &our head Do &ou con!rm that

ATTM. I-AGAN

The Deed o Sale cannot %e ass!ned. A deed o sale !s a transact!on %et'een t'o ersonsB 'hat !sass!ned are r!hts# the r!hts o the mortaee 'ere ass!ned to the I?C -eas!n J AccetanceCororat!on.

CO+RT

He uts !t !n a s!mle 'a& as one*deed o sale and chattel mortae 'ere ass!nedB . . . &ou 'ant toma


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resondent aellate court erred !n hold!n the rom!ssor& note !n quest!on to %e neot!a%le. Such arul!n does not onl& $!olate the la' and al!ca%le ur!srudence# %ut 'ould result !n unust enr!chmenton the art o %oth the ass!ner* ass!nor and resondent ass!nee at the e;ense o the et!t!oner*cororat!on 'h!ch r!htull& resc!nded an !nequ!ta%le contract. Ee note# ho'e$er# that s!nce the seller*ass!nor has not %een !mleaded here!n# there !s no o%stacle or the resondent to !le a c!$!l Su!t andl!t!ate !ts cla!ms aa!nst the seller* ass!nor !n the rather unl!7# are here%& ANN+--FD and SFT ASIDF. Thecomla!nt aa!nst the et!t!oner %eore the tr!al court !s DIS"ISSFD.

SO ORDFRFD.

CONSOLIDATED PLYWOOD V. IFC

149 SCRA 448

FACTS:

Petitioner bought from Atlantic Gulf and Pacific Company, through its sister company Industrial Products

Marketing, two used tractors. Petitioner was issued a sales invoice for the two used tractors. At the

same time, the deed of sale with chattel mortgage with promissory note was issued.

Simultaneously, the seller assigned the deed of sale with chattel mortgage and promissory note to respondent.

The used tractors were then delivered but barely 14 days after, the tractors broke down. The seller sent

mechanics but the tractors were not repaired accordingly as they were no

longer serviceable. Petitioner would delay the payments on the promissory notes until the seller completes its

obligation under the warranty.

Thereafter, a collection suit was filed against petitioner for the payment of the promissory note.

HELD:

It is patent that the seller is liable for the breach in warranty against the petitioner. This liability as a general

rule extends to the corporation to whom it assigned its rights and interests unless the assignee is a holder in

due course of the promissory note in question, assuming the note is negotiable, in which case, the

latters rights are based on a negotiable instrument and assuming further that the petitioners defense

may not prevail against it.

The promissory note in question is not a negotiable instrument. The promissory note in question lacks

the so-called words of negotiability. And as such, it follows that the respondent can never be a holder in due

course but remains merely an assignee of the note in question. Thus, the petitioner may raise against

the respondents all defenses available to it against the seller.


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Reu%l!c o the h!l!!nesSU#RE*E C!UR""an!la

SFCOND DIVISION

G.R. No. 9--97 *ar -, 1997

"RA(ERS R!A$ BAN6, et!t!oner#$s.C!UR" !F A##EA$S, F'$R'"ERS GUARAN" ASSURANCE C!R#!RA"'!N a%& CEN"RA$ BAN6 o e#'$'##'NES, resondents.

"!RRES, JR., J.:

Assa!led !n th!s et!t!on or Re$!e' on Certiorari !s the Dec!s!on o the resondent Court o Aeals

dated anuar& 56# 1660# 1 a!rm!n the null!t& o the transer o Central 2an< Cert!!cate o

Inde%tedness (C2CI) No. D>61# 2 '!th a ace $alue o 800#000.00# rom the h!l!!ne +nder'r!ters

?!nance Cororat!on (h!l!nance) to the et!t!oner Traders Ro&al 2an< (TR2)# under a ReurchaseAreement - dated ?e%ruar& =# 16>1# and a Detached Ass!nment 4 dated Ar!l 5@# 16>1.

Doc:*1@677 !n the Re!onal Tr!al Court o "an!la# 2ranch :5# the act!on 'as

or!!nall& !led as a et!t!on or :anda"us 5 under Rule 78 o the Rules o Court# to comel theCentral 2an< o the h!l!!nes to re!ster the transer o the su%ect C2CI to et!t!oner Traders Ro&al2an< (TR2).

In the sa!d et!t!on# TR2 stated that

:. On No$em%er 5@# 16@6# ?!lr!ters Guarant& Assurance Cororat!on (?!lr!ters) e;ecuted a KDetachedAss!nmentK . . .# 'here%& ?!lr!ters# as re!stered o'ner# sold# transerred# ass!ned and del!$ered untoh!l!!ne +nder'r!ters ?!nance Cororat!on (h!l!nance) all !ts r!hts and t!tle to Central 2an61 to the ?!lr!ters Guarant& Assurance Cororat!onB

(c) Order!n the la!nt! Traders Ro&al 2an< to a& resondent ?!lr!ters Guarant& Assurance Cor.The sum o 10#000 as attorne&s eesB and

(d) to a& the costs.

SO ORDFRFD. 9

The et!t!oner assa!led the dec!s!on o the tr!al court !n the Court o Aeals 10# %ut the!r aealsl!61. +nder a deed oass!nment dated No$em%er 5@# 16@1# ?!lr!ters transerred C2CI No. D>61 to h!l!!ne +nder'r!ters?!nance Cororat!on (h!l!nance). Su%sequentl h!l!nance transerred C2CI No. D>61# 'h!ch 'asst!ll re!stered !n the name o ?!lr!ters# to aellant Traders Ro&al 2an< (TR2). The transer 'as madeunder a reurchase areement dated ?e%ruar& =# 16>1# rant!n h!l!nance the r!ht to reurchasethe !nstrument on or %eore Ar!l 5@# 16>1. Ehen h!l!nance a!led to %u& %ac< the note on matur!t&date# !t e;ecuted a deed o ass!nment# dated Ar!l 5@# 16>1# con$e&!n to aellant TR2 all !ts r!htand the t!tle to C2CI No. D>61.

Armed '!th the deed o ass!nment# TR2 then souht the transer and re!strat!on o C2CI No. D>61!n !ts name %eore the Secur!t& and Ser$!c!n Deartment o the Central 2an< (C2). Central 2an61. ?a!l!n

to et a a$ora%le udment. TR2 no' comes to th!s Court on aeal. 11

In the aellate court# et!t!oner arued that the su%ect C2CI 'as a neot!a%le !nstrument# and ha$!nacqu!red the sa!d cert!!cate rom h!l!nance as a holder !n due course# !ts ossess!on o the same !sthus ree ro an& deect o t!tle o r!or art!es and rom an& deense a$a!la%le to r!or art!es amonthemsel$es# and !t ma& thus# enorce a&ment o the !nstrument or the ull amount thereo aa!nst all

art!es l!a%le thereon. 12

In !nor!n sa!d arument# the aellate court that the C2CI !s not a neot!a%le !nstrument# s!nce the!nstrument clearl& stated that !t 'as a&a%le to ?!lr!ters# the re!stered o'ner# 'hose name 'as!nscr!%ed thereon# and that the cert!!cate lac0# %etter


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%ehal o ?!lr!ters# d!d not ha$e the necessar& 'r!tten author!at!on rom the 2oard o D!rectors o?!lr!ters to act or the latter. ?or lac< o such author!t the ass!nment d!d not thereore %!nd ?!lr!tersand $!olated as the same t!me Central 2an< C!rcular No. @76 'h!ch has the orce and eect o a la'#result!n !n the null!t& o the transer (eole $. Pue o -a 6= h!l. 7=0B :" h!l!!nes# Inc. $s.Comm!ss!oner o Internal Re$enue# 178 SCRA @@>).

In sum# h!l!nance acqu!red no t!tle or r!hts under C2CI No. D>61 'h!ch !t could ass!n or transer toTraders Ro&al 2an< and 'h!ch the latter can re!ster '!th the Central 2an


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'r!t!n# that !s# rom the ace o the !nstrument !tsel. In the construct!on o a %!ll or note# the !ntent!on othe art!es !s to control# ! !t can %e leall& ascerta!ned. Eh!le the 'r!t!n ma& %e read !n the l!ht osurround!n c!rcumstance !n order to more erectl& understand the !ntent and mean!n o the art!es#&et as the& ha$e const!tuted the 'r!t!n to %e the onl& out'ard and $!s!%le e;ress!on o the!r mean!n#no other 'ords are to %e added to !t or su%st!tuted !n !ts stead. The dut& o the court !n such case !s toascerta!n# not 'hat the art!es ma& ha$e secretl& !ntended as contrad!st!nu!shed rom 'hat the!r'ords e;ress# %ut 'hat !s the mean!n o the 'ords the& ha$e used. Ehat the art!es meant must %e

determ!ned %& 'hat the& sa!d.Thus# the transer o the !nstrument rom h!l!nance to TR2 'as merel& an ass!nment# and !s noto$erned %& the neot!a%le !nstruments la'. The ert!nent quest!on then !s# 'as the transer o theC2CI rom ?!lr!ters to h!l!nance and su%sequentl& rom h!l!nance to TR2# !n accord '!th e;!st!nla'# so as to ent!tle TR2 to ha$e the C2CI re!stered !n !ts name '!th the Central 2an61 !s deect!$e s!nce !tacqu!red the !nstrument rom ?!lr!ters !ct!t!ousl&. Althouh the deed o ass!nment stated that thetranser 'as or K$alue rece!$edK# there 'as reall& no cons!derat!on !n$ol$ed. Ehat haened 'ash!l!nance merel& %orro'ed C2CI No. D>61 rom ?!lr!ters# a s!ster cororat!on. Thus# or lac< o an&cons!derat!on# the ass!nment made !s a comlete null!t&.

Ehat !s more# Ee !nd that the transer made %& ?!lr!ters to h!l!nance d!d not conorm to Central2an< C!rcular No. @76# ser!es o 16>0# other'!se


19/62

?!lr!ters. 17

Ee d!saree '!th et!t!oner.

et!t!oner cannot ut u the e;cuse o !erc!n the $e!l o cororate ent!t as th!s merel& an equ!ta%leremed and ma& %e a'arded onl& !n cases 'hen the cororate !ct!on !s used to deeat u%l!ccon$en!ence# ust!& 'ron# rotect raud or deend cr!me or 'here a cororat!on !s a mere alter eo or

%us!ness condu!t o a erson.

18

e!erc!n the $e!l o cororate ent!t& requ!res the court to see throuh the rotect!$e shroud 'h!che;emts !ts stoc61 conta!n a ro$!s!on on !ts TRANS?FR. Thus

TRANS?FR. Th!s Cert!!cate shall ass %& del!$er& unless !t !s re!stered !n the o'ners name at an&o!ce o the 2an< or an& aenc& dul& author!ed %& the 2an


20/62

to $er!& o !nqu!re as to the t!tle h!l!nance to d!sose to the C2CI.

"oreo$er# C2CI No. D>61 !s o$erned %& C2 C!rcular No. @76# ser!es o 1660 21# 61 !n the ace$alue o 8000#000.00 su%ect o th!s case

A Mes# s!r.

P Eh& do &ou 1 and th!s C2CI No. >61 'as amon the C2CIs that 'ere ound to %e m!ss!n.

P -et me ta1. D!d &ou ha$e the


21/62

Consequentl the t!tle o ?!lr!ters o$er the su%ect cert!!cate o !nde%tedness must %e uheld o$er thecla!med !nterest o Traders Ro&al 2an


22/62

of no force and effect7

#$ilfinance acquired no title or rig$ts under C%CI w$ic$ it could assign or transfer

to raders and w$ic$ it can register wit$ t$e Central %an&

instrument is payable only to Filriters, t$e registered owner

I!!3@:


23/62

$e fact t$at Filfinance owns ma?ority s$ares in Filriters is not by itself a ground to

disregard t$e independent corporate status of Filriters7

raders &new t$at #$ilfinance is not registered owner of t$e C%CI7

$e fact t$at a nonEowner was disposing of t$e registered C%CI owned by anot$er

entity was a good reason for petitioner to erify of inquire as to t$e title #$ilfinanceto dispose to t$e C%CI7

Nemo potest nisi quod de jure potest no man can do anyt$ing e0cept w$at $e can do

lawfully7


24/62


?IRST DIVISION

G.R. No. 107898 (ee>ber 19, 1995

*ANUE$ $'* a%& R!S'"A $'*, et!t!oners#$s.C!UR" !F A##EA$S a%& #E!#$E !F "E #'$'##'NES, resondents.

BE$$!S'$$!, J.:

"AN+F- -I" and ROSITA -I"# souses# 'ere chared %eore the Re!onal Tr!al Court o "ala%on '!th estaaon three (:) counts under Art. :18# ar. 5 (d)# o The ;evised enal Code# doc: the -!ms ordered another 78 !eces o m!ld steel lates 'orth 7:#=88.00 rom -INTON 'h!ch'ere del!$ered at the!r lace o %us!ness on the same da&. The& !ssued as a&ment SO-ID2AN Chec< No.

05@766 !n the amount o 7:#=88.00 ostdated 50 Auust 16>:. 2

The -!m souses also ordered 5#700 KK url!ns 'orth 5=1#>00.00 'h!ch 'ere del!$ered to them on $ar!ousdates# to '!t 18 and 55 Ar!l 16>:B 11# 1=# 50# 5:# 58# 5> and :0 "a& 16>:B and# 5 and 6 une 16>:. To a& orthe del!$er!es# the& !ssued se$en SO-ID2AN chec


25/62

deos!ted '!th the R!al Commerc!al 2an

%an< leder sho'!n a %alance o 78#@85.@8. Also# he cla!med that he ordered SO-ID2AN to sto a&ment%ecause the sul!es del!$ered %& -INTON 'ere not !n accordance '!th the sec!!cat!ons !n the urchaseorders.

Ros!ta -!m 'as not resented to test!& %ecause her statements 'ould onl& %e corro%orat!$e.

On the %as!s o the e$!dence thus resented the tr!al court held %oth accused u!lt& o estaa and $!olat!on o 2..2l. 55 !n !ts dec!s!on dated 58 anuar& 16>6. In Cr!m. Case No. 1767*"N the& 'ere sentenced to an!ndeterm!nate enalt& o s!; (7) &ears and one (1) da& oprision "ayor as m!n!mum to t'el$e (15) &ears and one(1) da& o reclusion te"poral as ma;!mum lus one (1) &ear or each add!t!onal 10#000.00 '!th all theaccessor& enalt!es ro$!ded or %& la'# and to a& the costs. The& 'ere also ordered to !ndemn!& -INTON !nthe amount o 5=1#>00.00. S!m!larl& sentences 'ere !mosed !n Cr!m. Cases Nos. 176@*"N and 176>*"Ne;cet as to the !ndemn!t!es a'arded# 'h!ch 'ere 7:#=88.00 and 81#>00.00# resect!$el&.

In Cr!m. Case No. 1766*"N the tr!al court sentenced %oth accused to a stra!ht enalt& o one (1) &ear

!mr!sonment '!th all the accessor& enalt!es ro$!ded or %& la' and to a& the costs. In add!t!on# the& 'ereordered to !ndemn!& -INTON !n the amount o 5@#600.00. Aa!n# s!m!lar sentences 'ere !mosed !n Cr!m.Cases Nos. 1@00*"N to 1@08*"N e;cet or the !ndemn!t!es a'arded# 'h!ch 'ere :5#880.00# 5@#600.00#

5@#600.00# 7:#=88.00# 81#>00.00 and :@#500.00 resect!$el&. 15

On aeal# the accused assa!led the dec!s!on as the& !muted error to the tr!al court as ollo's (a) the re!onalTr!al Court o mala%on had no ur!sd!ct!on o$er the cases %ecause the oenses chared ere comm!tted outs!de!ts terr!tor&B (%) the& could not %e held l!a%le or estaa %ecause the se$en (@) chec


26/62

!ts ur!sd!ct!on 'hen !t tr!ed the case and rendered udment thereon.

The et!t!on has no mer!t. Sect!on 1# ar. 1# o 2.. 2l. 55 un!shes K3a4n& erson 'ho ma8 Rules onCr!m!nal rocedure# sec!!call& ro$!des

Sec. 1=. lace where action is to e instituted. Q (a) In all cr!m!nal rosecut!ons the act!on shall %e !nst!tuted andtr!ed !n the court o the mun!c!al!t& or ro$!nce 'here!n the oense 'as comm!tted or an&one o the essent!al!nred!ents thereo too< lace.

I all the acts mater!al and essent!al to the cr!me and requ!s!te o !ts consummat!on occurred !n one mun!c!al!t&

or terr!tor the court there!n has the sole ur!sd!ct!on to tr& the case. 2- There are certa!n cr!mes !n 'h!ch someacts mater!al and essent!al to the cr!mes and requ!s!te to the!r consummat!on occur !n one mun!c!al!t& orterr!tor& and some !n another# !n 'h!ch e$ent# the court o e!ther has ur!sd!ct!on to tr& the cases# !t %e!n

understood that the !rst court ta

+nder Sec. 161 o the Neot!a%le Instruments -a' the term K!ssueK means the !rst del!$er& o the !nstrumentcomlete !n orm to a erson 'ho ta


27/62

"odesto Mam%aos rece!t o the %ad chec

uon the Re!onal Tr!al Court o "ala%on. -1

Ee thereore susta!n l!


28/62

EHFRF?ORF# the dec!s!on o the Court o Aeals dated 1> Setem%er 1665 a!rm!n the con$!ct!on oet!t!oners "anuel -!m and Ros!ta -!m Q

In CA*G.R. CR No. 0@5@@ (RTC Cr!m. Case No. 1766*"N)B CA*G.R. CR No. 0@5@> (RTC Cr!m. Case No. 1@00*"N)B CA*G.R. CR No. 0@5@6 (RTC Cr!m. Case No. 1@01*"N)B CA*G.R. CR No. 0@5>0 (RTC Cr!m. Case No.1@05*"N)B CA*G.R. CR No. 0@5>1 (RTC Cr!m. Case No. 1@0:*"N)B CA*G.R. CA No. 0@5>5 (RTC Cr!m. CaseNo. 1@0=*"N)B and CA*G.R. CR No. 0@5>: (RTC Cr!m Case No. 1@08*"N)# the Court !nds the accused*aellants

"AN+F- -I" and ROSITA -I" u!lt& %e&ond reasona%le dou%t o $!olat!on o 2atas am%ansa 2!lan 55 andare here%& sentenced to suer a STRAIGHT FNA-TM O? ONF (1) MFAR I"RISON"FNT !n each case#toether '!th all the accessor& enalt!es ro$!ded %& la'# and to a& the costs.

In CA*G.R. CR No. 0@5@@ (RTC Cr!m. Case No. 1766*"N)# %oth accused*aellants are here%& ordered to!ndemn!& the oended art& !n the sum o 5@#600.00.

In CA*G.R. CR No. 0@5@> (RTC Cr!m. Case No. 1@00*"N) %oth accused*aellants are here%& ordered to!ndemn!& the oended art& !n the sum o :5#880.00.

In CA*G.R. CR No. 0@5@> (RTC Cr!m. Case No. 1@01*"N) %oth accused*aellants are here%& ordered to!ndemn!& the oended art& !n the sum o 5@#600.00.

In CA*G.R. CR No. 0@5>0 (RTC Cr!m. Case No. 1@05*"N) %oth accused*aellants are here%& ordered to!ndemn!& the oended art& !n the sum o 5@#600.00.

In CA*G.R. CR No. 0@5>1 (RTC Cr!m. Case No. 1@0:*"N) %oth accused are here%& ordered to !ndemn!& theoended art& !n the sum o 7:#=88.00.

In CA*G.R CR No. 0@5>5 (RTC Cr!m. Case No. 1@0=*"N) %oth accused*aellants are here%& ordered to!ndemn!& the oended art& !n the sum o 81#>00.00# and

In CA*G.R. CR No. 0@5>: (RTC Cr!m. Case No. 1@08*"N) %oth accused*aellants are here%& ordered to

!ndemn!& the oended art& !n the sum o :@#500.00 --

as 'ell as !ts resolut!on o 7 No$em%er 1665 den&!n recons!derat!on thereo# !s A??IR"FD. Costs aa!nstet!t!oners.

SO ORDFRFD.

adilla, Davide, @r., =apunan and 4er"osisi"a, @r., @@., concur.

MANUEL LIM V. CA

251 SCRA 408

FACTS:Spouses Lim were charged with estafa and violations of BP22 for allegedly purchasing goods from Linton

Commercial Corporation and issuing checks as payment thereof. The checks when presented to the

bank were dishonored for insufficiency of funds or the payment for the checks has been stopped.


29/62


30/62


?IRST DIVISION

G.R. No. 111190 Ju%e 27, 1995

$!RE"! (. (E $A 'C"!R'A, a: C/y F/:a o *a%&aue C/y a%& /% /: er:o%a aa/y a:

?ar%/:ee,et!t!oner#$s.!N. J!SE #. BURG!S, #re:/&/%? Ju&?e, R"C, Br. @'', Cebu C/y, a%& RAU$ .SESBRE!, resondents.

BE$$!S'$$!, J.:

RA+- H. SFS2RFO !led a comla!nt or damaes aa!nst Ass!stant C!t& ?!scals 2!en$en!do N."a%anto# r.# and Dar!o D. Rama# r.# %eore the Re!onal Tr!al Court o Ce%u C!t&. Ater tr!al udment'as rendered order!n the deendants to a& 11#000.00 to the la!nt!# r!$ate resondent here!n.

The dec!s!on ha$!n %ecome !nal and e;ecutor on mot!on o the latter# the tr!al court ordered !tse;ecut!on. Th!s order 'as quest!oned %& the deendants %eore the Court o Aeals. Ho'e$er# on 18anuar& 1665 a 'r!t o e;ecut!on 'as !ssued.

On = ?e%ruar& 1665 a not!ce o arn!shment 'as ser$ed on et!t!oner -oreto D. de la V!ctor!a as C!t&?!scal o "andaue C!t& 'here deendant "a%anto# r.# 'as then deta!led. The not!ce d!rectedet!t!oner not to d!s%urse# transer# release or con$e& to an& other erson e;cet to the deut& sher!concerned the salar& chec

On 6 "arch 166: the tr!al court den!ed %oth mot!ons and ordered et!t!oner to !mmed!atel& coml&'!th !ts order o = No$em%er 1665. - It o!ned that the chec


31/62

E!th reard to the contemt chare# the tr!al court 'as not morall& con$!nced o et!t!oners u!lt. ?or#'h!le h!s e;lanat!on suered rom rocedural !n!rm!t!es ne$ertheless he too< a!ns !n enl!hten!nthe court %& send!n a 'r!tten e;lanat!on dated 55 ul& 1665 request!n or the l!t!n o the not!ce oarn!shment on the round that the not!ce should ha$e %een sent to the ?!nance O!cer o theDeartment o ust!ce. et!t!oner !ns!sts that he had no author!t& to sereate a ort!on o the salar& o"a%anto# r. The e;lanat!on ho'e$er 'as not su%m!tted to the tr!al court or act!on s!nce the

stenorah!c reorter a!led to attach !t to the record. 4

On 50 Ar!l 166: the mot!on or recons!derat!on 'as den!ed. The tr!al court e;la!ned that !t 'as notthe dut& o the arn!shee to !nqu!re or ude or h!msel 'hether the !ssuance o the order o e;ecut!on#'r!t o e;ecut!on and not!ce o arn!shment 'as ust!!ed. H!s onl& dut& 'as to turn o$er the arn!shed

chec


32/62

As a necessar& consequence o %e!n u%l!c und# the chec


33/62

Sesbreno filed a case against Mabanto Jr. among other people wherein the court decided in favor of the

plaintiff, ordering the defendants to pay former a definite amount of cash. The decision had become

final and executory and a writ of execution was issued. This was questioned in the CA by the defendants.

In the meanwhile, a notice of garnishment was issued to petitioner who was then the City Fiscal. She

was asked to withhold any check or whatnot in favor of Mabanto Jr. The CA then dismissed the

defendants petition and the garnishment was commenced only to find out that petitioner didn't follow

instructions of sheriff. She is now being held liable.

HELD:

Garnishment is considered as the species of attachment for reaching credits belonging to the judgment

debtor owing to him from a stranger in litigation. Emphasis is laid on the phrase belonging to the judgment

debtor since it is the focal point of resolving the issues raised.

As Assistant City Fiscal, the source of Mabantos salary is public funds. Under Section 16 of the NIL,every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the

purpose of giving effect thereto. As ordinarily understood, delivery means the transfer of the possession of

the instrument by the maker or drawer with intent to transfer title to the payee and recognize him as the

holder thereof.

The petitioner is the custodian of the checks. Inasmuch as said checks were in the custody of the

petitioner and not yet delivered to Mabanto, they didn't belong to him and still had the character of public

funds. The salary check of a government officer or employee doesn't belong to him

before it has been physically delivered to him. Until that time the check belongs to the government.

Accordingly, before there is actual delivery of the check, the payee has no power over it, he cannot assign it

without the consent of the government.

*If public funds would be allowed to be garnished, then basic services of the government may be

hampered.


34/62


35/62


SFCOND DIVISION

G.R. No. 85419 *ar 9, 199-

(EE$!#*EN" BAN6 !F R'3A$, la!nt!*et!t!oner#$s.S'*A E' a%&or $EE 6'AN UA", *AR CENG U, SA*S!N "UNG, AS'AN 'N(US"R'A$ #$AS"'CC!R#!RA"'!N a%& #R!(UCERS BAN6 !F "E #'$'##'NES, deendants*resondents.

>n!son & -ssociates for petitioner.

4enry -. ;eyes & -ssociates for 6a"so Tun! & -sian #ndustrial lastic Corporation.

Eduardo ?. Castelo for 6i"a ei.

:onsod, Ta"ar!o & -ssociates for roducers :B and

(5) To enorce a&ment o t'o chec

errors o the Court o Aeals 1

(1) THF CO+RT O? AFA-S FRRFD IN HO-DING THAT THF -AINTI??*FTITIONFR HAS NOCA+SF O? ACTION AGAINST DF?FNDANTS*RFSONDFNTS HFRFIN.

(5) THF CO+RT O? AFA-S FRRFD IN HO-DING THAT SFCTION 1:# R+-F : O? THF RFVISFDR+-FS O? CO+RT ON A-TFRNATIVF DF?FNDANTS IS NOT A-ICA2-F TO HFRFINDF?FNDANTS*RFSONDFNTS.

The antecedent acts o th!s case are as ollo's

In cons!derat!on or a loan e;tended %& et!t!oner 2an< to resondent S!ma Ee!# the latter e;ecutedand del!$ered to the ormer a rom!ssor& note# ena!n to a& the et!t!oner 2an< or order theamount o 1#>50#000.00 on or %eore une 5=# 16>: '!th !nterest at :5Lper annu". S!ma Ee! madeart!al a&ments on the note# lea$!n a %alance o 1#0:5#=80.05. On No$em%er 1># 16>:# S!ma Ee!!ssued t'o crossed chec


36/62

a&ee or to an& o !ts author!ed reresentat!$es. ?or reasons not sho'n# these chec=6:8# 'ere not del!$ered to the a&ee# the et!t!oner here!n. E!thout thedel!$er& o sa!d chec


37/62

a&ment o an o%l!at!on does not const!tute a&ment unless the& are cashed or the!r $alue !s

!ma!red throuh the ault o the cred!tor. None o these e;cet!ons 'ere alleed %& resondentS!ma Ee!.

Thereore# unless resondent S!ma Ee! ro$es that she has %een rel!e$ed rom l!a%!l!t& on therom!ssor& note %& some other cause# et!t!oner 2an< has a r!ht o act!on aa!nst her or the %alancedue thereon.

Ho'e$er# !nsoar as the other resondents are concerned# et!t!oner 2an< has no r!$!t& '!th them.S!nce et!t!oner 2an< ne$er rece!$ed the chec


38/62

HELD:

A negotiable instrument, of which a check is, is not only a written evidence of a contract right but is also a

species of property. Just as a deed to a piece of land must be delivered in order to convey title to the grantee,

so must a negotiable instrument be delivered to the payee in order to evidence its existence as a

binding contract. Section 16 provides that every contract on a negotiable instrument is incomplete and

revocable until delivery of the instrument for the purpose of giving effect thereto. Thus,the payee of the negotiable instrument acquires no interest with respect thereto until its delivery to him.

Delivery of an instrument from the drawer to the payee, there can be no liability on the instrument. Moreover,

such delivery must be intended to give effect to the instrument.


FN 2ANC

G.R. No. $)281 February 2, 1951

ENR'DUE #. *!N"'N!$A, la!nt!*aellant#$s."E #'$'##'NE NA"'!NA$ BAN6, E" A$., deendants*aellees.

Aui(ano, ;osete and Lucena for appellant.6econd -ssistant Corporate Counsel 4ilarion 7. @arencio for appellee hilippine 5ational


39/62

!nasmuch as the amount !n contro$ers& e;ceeds 80#000.

There !s no d!sute as to the ollo'!n acts. In Ar!l and "a 16=5# +%aldo D. -a&a 'as the ro$!nc!alTreasurer o "!sam!s Or!ental. As such ro$!nc!al Treasurer he 'as ex officio aent o the h!l!!ne Nat!onal2an< %ranch !n the ro$!nce. "ar!ano V. Ramos 'or

The endorsement no' aear!n at the %ac< o the chec< ( see F;h!%!t A*1) ma& %e descr!%ed as ollo's The'oods# Ka& to the order oK Q !n ru%%er stam and !n $!olet color are laced a%out one !nch rom the to. Th!s !sollo'ed %& the 'ords KFnr!que . "ont!nolaK !n t&e'r!t!n 'h!ch !s aro;!matel& 89> an !nch %elo' thestamed 'ords Ka& to the order oK. 2elo' KFnr!que . "ont!nolaK# !n t&e'r!t!n are 'ords and !ures also !nt&e'r!t!n# K81@ Isa%el StreetK and a%out U9> o an !nch thererom# the edes o the chec< aear to ha$e %een%urned# %ut there are 'ords stamed aarentl& !n ru%%er stam 'h!ch# accord!n to "ont!nola# are a acs!m!leo the s!nature o Ramos. There !s a s!nature 'h!ch aarentl& reads K". V. RamosK also !n reen !n< %utmade !n hand'r!t!n.K

To the a%o$e descr!t!on 'e ma& add that the name o ". V. Ramos !s hand r!nted !n reen !n


40/62

aanese m!l!tar& notes %ut that "ont!nola a$e h!m onl& t'o chec

In e;lanat!on o the mut!lat!on o the chec< "ont!nola told the court that se$eral months ater !ndors!n anddel!$er!n the chec< to h!m# Ramos demanded the return o the chec< to h!m# threaten!n "ont!nola '!th %od!l&harm# e$en death %& h!msel or h!s uerr!lla orces ! he d!d not return sa!d chec


41/62

order oK# Cortado stated that 'hen he (Cortado)# Atadero# "ont!nola and Ramos returned !n rou to the houseo "ont!nola# the ru%%er stam 'as alread& !n the house o "ont!nola# and !t 'as on the ta%le o the uer looro the house# toether '!th the stam ad used to stam the same. "ont!nola# on the other hand# test!!ed thatRamos carr!ed !n h!s oc


42/62

a%out the end o Decem%er 16== %& reason o the act that ". V. Ramos sold to h!m :0#000 o the ace $aluethereo !n cons!derat!on o the sum o 60#000 aanese mone o 'h!ch onl& one*hal or =8#000 (!n aanesemone&) 'as actuall& a!d %& sa!d la!nt! to Ramos. (R. on A.# . :1*::B 2r!e o Aellee# . 1=*50.)

At the %e!nn!n o th!s dec!s!on# 'e stated that as ro$!nc!al Treasurer o "!sam!s Or!ental# +%aldo D. -a&a'asex officio aent o the h!l!!ne Nat!onal 2an< %ranch !n that ro$!nce. On the ace o the chec< (F;h. A) 'eno' !nd the 'ords !n arenthes!s KAent# h!l. Nat!onal 2an


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o sa!d currenc& !n the h!l!!ne Nat!onal 2an< %ranch !n Ce%u# and that !n !ssu!n the chec< (F;h. A)# hee;ected to ha$e !t cashed at sa!d Ce%u %an< %ranch aa!nst h!s deos!t o 800#000.

The lo!cal conclus!on# thereore# !s that the chec< 'as !ssued %& -a&a onl& as ro$!nc!al Treasurer and as ano!c!al o the Go$ernment 'h!ch 'as under o%l!at!on to ro$!de the +SA??F '!th ad$ance unds# and not %&the h!l!!ne Nat!onal 2an< 'h!ch has no such o%l!at!on. The $er& Anne; C# made art o la!nt!s comla!nt#and later !ntroduced !n e$!dence or h!m as F;h!%!t F states that -a&a !ssued the chec< K!n h!s caac!t& asro$!nc!al Treasurer o "!sam!s Or!entalK# o%$!ousl not as aent o the 2an


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!tsel or e$en %eore sa!d %order l!ne.

The clos!n arenthes!s K)K on F;h!%!t A !s a l!ttle ar rom the erend!cular reen %order l!ne and aears to %edou%le !nstead o one s!nle l!neB th!s same K)K on F;h!%!t 2 aears !n a s!nle l!ne and !s relat!$el& nearer to the%order l!ne.

There are other nota%le d!screanc!es %et'een the chec< Anne; A and the hotostat!c co F;h!%!t 2# asreards the relat!$e os!t!on o the hrase KAent# h!l. Nat!onal 2an


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In the ra&er or rel!e conta!ned at the end o the %r!e or the h!l!!ne Nat!onal 2an< dated Setem%er 5@#16=6# 'e !nd th!s ra&er

It !s also resectull& ra&ed that th!s Honora%le Court reer the chec


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Currency %oard by aut$ority of t$e late #resident Hue9on7

April *D, -.*: t$ru t$e recommendation of #roincial reasurer Laya, $is assistant agent

87 7 Ramos was inducted into t$e 3nited !tates Armed Forces in t$e Far @ast (3!AFF@) asdisbursing officer of an army diision7

April 65, -.*: 87 7 Ramos,disbursing officer, went to #roince Lanao to procure a cas$

adance in t$e amount of #;55= for t$e use of t$e 3!AFF@

#edro @ncarnacion, #roincial reasurer of Lanao did not $ae t$at amount in cas$

so $e gae Ramos #655,555 in emergency notes and a c$ec& for #455,555

Ramos $ad no opportunity to cas$ t$e c$ec& because in t$e eening, t$e Gapanese

forces entered t$e capital

8ay *, -.*: Ramos went to t$e office of #roincial reasurer Laya at 8isamis riental to

encas$ t$e c$ec& for #455,555 w$ic$ $e $ad receied from t$e #roincial reasurer of

Lanao7 Laya did not $ae enoug$ cas$ to coer t$e c$ec& so $e gae Ramos #55,555 inemergency notes and a c$ec& No7 -6;* for #-55,555 drawn on t$e #$ilippine National

%an&7 According to Laya $e $ad preiously deposited #455,555 emergency notes int$e #$ilippine National %an&branc$ in Cebu and $e e0pected to $ae t$e c$ec& issued by

$im cas$ed in Cebu against said deposit7

Gune -5, -.*: t$e 3!AFF@ forces to w$ic$ $e was attac$ed surrendered7

Ramos was made a prisoner of war until February -*, -.6

2ecember, -.: 87 7 Ramos allegedly indorsed t$e c$ec& to @nrique #7 8ontinola7

August, -.+: @nrique #7 8ontinola filed a complaint to collect t$e sum of #-55,555, t$e

amount of C$ec& issued by t$e #roincial reasurer of 8isamis riental to 8ariano 7

Ramos and supposedly indorsed to 8ontinola

court: dismissed

I!!3@:

-7


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SFCOND DIVISION

G.R. No. $)-941 February 28, 198-

*E"R!#!$


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(%) Order!n same deendant to a& to la!nt! the sum equ!$alent to 58L o 18#6:6.00 lus !nterestthereon unt!l ull& a!dB and

(c) To a& the cost o su!t.

Not sat!s!ed '!th the dec!s!on# the resent aeal 'as !nst!tuted# aellant Sam%o< ra!s!n a loneass!nment o error as ollo's

The tr!al court erred !n not d!sm!ss!n the comla!nt %& !nd!n deendant aellant Sam%o< "otorsComan& as ass!nor and a qual!!ed !ndorsee o the su%ect rom!ssor& note and !n not hold!n !t asonl& secondar!l& l!a%le thereo.

Aellant Sam%o< arues that %& add!n the 'ords K'!th recourseK !n the !ndorsement o the note# !t%ecomes a qual!!ed !ndorser that %e!n a qual!!ed !ndorser# !t does not 'arrant that ! sa!d note !sd!shonored %& the ma


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Metropol (Bacolod) Financing & Investment Corp. v. Sambok

Motors, 19!

Facts"

2r7 Gaier illaruel e0ecuted a promissory note in faor of Ng !ambo& !ons 8otorsCo7, Ltd7, n

t$e same date, !ambo& 8otors, a sister company of Ng !ambo& !ons 8otorsCo7, Ltd7, and undert$e same management as t$e former, negotiated and indorsed t$e note in faor of plaintiff

8etropol Financing K Inestment Corporation wit$ t$e following indorsement: 1#ay to t$e order of8etropol %acolod Financing K Inestment Corporation wit$ recourse7 Notice of 2emandJ 2is$onorJ

#rotestJ and #resentment are $ereby waied7

8etropol formally presented t$e promissory note for payment to t$e ma&er7

2r7 illaruel failed to pay t$e promissory note as demanded, $ence 8etropol notified !ambo& oft$e fact t$at t$e same $as been dis$onored and demanded payment7 !ambo& failed to pay, so

8etropol filed a complaint for collection of a sum of money7 !ambo& did not deny its liability butcontended t$at it could not be obliged to pay until after its coEdefendant 2r7 illaruel, $as been

declared insolent7

Iss#e"

$et$er !ambo& 8otors Company, by adding t$e words 1wit$ recourse1 in t$e indorsement of t$enote, becomes a qualified indorserJ t$at being a qualified indorser, it does not warrant t$at if said

note is dis$onored by t$e ma&er on presentment, it will pay t$e amount to t$e $older7

$#ling"

No7 A qualified indorsement constitutes t$e indorser a mere assignor of t$e title to t$e instrument7

It may be made by adding to t$e indorser>s signature t$e words 1wit$out recourse1 or any wordsof similar import7 !uc$ an indorsement reliees t$e indorser of t$e general obligation to pay if t$e

instrument is dis$onored but not of t$e liability arising from warranties on t$e instrument asproided in !ection D4 of t$e Negotiable Instruments Law7 Boweer, appellant !ambo& indorsed

t$e note 1wit$ recourse1 and een waied t$e notice of demand, dis$onor, protest andpresentment71Recourse1 means resort to a person w$o is secondarily liable after t$e default of t$e

person w$o is primarily liable7 Appellant, by indorsing t$e note 1wit$ recourse1 does not ma&eitself a qualified indorser but a general indorser w$o is secondarily liable, because by suc$

indorsement, it agreed t$at if 2r7 illaruel fails to pay t$e note, plaintiffEappellee can go after said

appellant7 $e effect of suc$ indorsement is t$at t$e note was indorsed wit$out qualification7 Aperson w$o indorses wit$out qualification engages t$at on due presentment, t$e note s$all be

accepted or paid, or bot$ as t$e case may be, and t$at if it be dis$onored, $e will pay t$e amount

t$ereof to t$e $older7 Appellant !ambo&>s intention of indorsing t$e note wit$out qualification ismade een more apparent by t$e fact t$at t$e notice of demand, dis$onor, protest and


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presentment were all waied7 $e words added by said appellant do not limit $is liability, but

rat$er confirm $is obligation as a general indorser7 Appellant !ambo& is not only secondarily liablebecause after an instrument is dis$onored by nonEpayment, t$e person secondarily liable t$ereon

ceases to be suc$ and becomes a principal debtor7 Bis liability becomes t$e same as t$at of

t$e original obligor7 Consequently, t$e $older need not een proceed against t$e ma&er beforesuing t$e indorser7


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SFCOND DIVISION

G.R. No. 92244 February 9, 199-

NA"''(A( GE*#ESA, et!t!oner#$s."E !N!RAB$E C!UR" !F A##EA$S a%& #'$'##'NE BAN6 !F C!**UN'CA"'!NS, resondents.

L.


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THF A"O+NT O? 1#50>#707.>6 EITH -FGA- INTFRFST.

?rom the records# the rele$ant acts are as ollo's

et!t!oner Nat!$!dad O. Gemesa' (et!t!oner) o'ns and oerates our rocer& stores located at R!alA$enue F;tens!on and at Second A$enue# Caloocan C!t&. Amon these rocer!es are D.G. Shoers"art and D.G. Ehole Sale "art. et!t!oner ma!nta!ns a chec*1 '!ththe Caloocan C!t& 2ranch o the resondent dra'ee 2an) &ears. Ater the %oo

o%l!at!on 'as onl& 1#7@5.=@ (F;h. 2)B (=) !n Chec< No. 750=80 dated "a& 10# 16>= !n a$or onot%err& or 11#7@@.10 (F;h. A*:1) her actual o%l!at!on 'as onl& 7@@.10 (F;hs. C and C*1)B (8) !nChec< No. 781>75 dated Auust 6# 16>= !n a$or o "al!nta F;chane "art or 11#[email protected] (F;h. A*75)# her o%l!at!on 'as onl& 1#[email protected] (F;h. D*5)B (7) !n Chec< No. 781>7: dated Auust 11# 16>= !na$or o Grocers Internat!onal ?ood Cor. !n the amount o 11#::8.70 (F;h. A*77)# her o%l!at!on 'asonl& 1#::8.70 (F;h. F and F*1)B (@) !n Chec< No. 8>6016 dated "arch 1@# 16>= !n a$or o Soh&roducts !n the amount o 11#7=>.00 (F;h. A*@>)# her o%l!at!on 'as onl& 7=>.00 (F;h. G)B (>) !nChec< No. 8>605> dated "arch 10# 16>= or the amount o 11#850.00 !n a$or o the Ma


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As a matter o ract!cal s!n!!cance# ro%lems ar!s!n rom ored !ndorsements o chec5)chec

As a rule# a dra'ee %an< 'ho has a!d a chec< on 'h!ch an !ndorsement has %een ored cannotchare the dra'ers account or the amount o sa!d chec


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o orer!es as !n the case at %ar.

The nel!ence o a deos!tor 'h!ch '!ll re$ent reco$er& o an unauthor!ed a&ment !s %ased ona!lure o the deos!tor to act as a rudent %us!nessman 'ould under the c!rcumstances. In the case at%ar# the et!t!oner rel!ed !ml!c!tl& uon the honest& and lo&alt& o her %ooet!t!oner e;am!ned her records more careull art!cularl& the !n$o!ce rece!ts# cancelled chec5)chec


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dra'ers nel!ence. S!nce the dra'er 'as not nel!ent# the dra'ee 'as dut&*%ound to restore to thedra'ers account the amount theretoore a!d under the chec< '!th a ored a&ees !ndorsement%ecause the dra'ee d!d not a& as ordered %& the dra'er.

et!t!oner arues that resondent dra'ee 2an< should not ha$e honored the chec

(a) roh!%!ts urther neot!at!on o the !nstrumentB or

;;; ;;; ;;;

In th!s

QThose 'ho !n the erormance o the!r o%l!at!ons are u!lt& o raud# nel!ence or dela and those'ho !n an& manner contra$ene the tenor thereo# are l!a%le or damaes.

There !s no quest!on that there !s a contractual relat!on %et'een et!t!oner as deos!tor (o%l!ee) andthe resondent dra'ee %an< as the o%l!or. In the erormance o !ts o%l!at!on# the dra'ee %an< !s%ound %& !ts !nternal %an


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'ere not actuall& u!lt& o raud or nel!ence.

?urthermore# the act that the resondent dra'ee 2an< d!d not d!sco$er the !rreular!t& '!th resect tothe accetance o chec


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G!%&!'a( )'. CA

GR 92244, 9 February 1993

FACTS:

Natividad Gempesaw issued cec!s, prepared by er b""!!eeper, a t"ta# "$ %2 cec!s i& $av"r "$ severa# supp#ies'("st "$ te cec!s $"r am"u&ts i& e)cess "$ actua# "b#i*ati"&s as s"w& i& teir c"rresp"&di&* i&v"ices' +t was"y a$ter te #apse "$ m"re ta& 2 years did se disc"vered te $raudu#e&t ma&ipu#ati"&s "$ er b""!!eeper' +t

was a#s" #ear&ed tat te i&d"rseme&ts "$ te payee were $"r*ed, a&d te cec!s were br"u*t t" te cie$acc"u&ta&t "$ i#ippi&e -a&! "$ C"mmerce .te /rawee -a&!, -ue&dia -ra&c0 w" dep"sited tem i& teacc"u&ts "$ A#$red" R"mer" a&d -e&it" am' Gempesaw made dema&d up"& te ba&! t" credit te am"u&tcar*ed due te cec!s' Te ba&! re$used' e&ce, te prese&t acti"&'

+SS:

5" sa## bear te #"ss resu#ti&* $r"m te $"r*ed i&d"rseme&ts'

/:

As a ru#e, a drawee ba&! w" as paid a cec! "& wic a& i&d"rseme&t as bee& $"r*ed ca&&"t car*e tedrawer6s acc"u&t $"r te am"u&t "$ said cec!' A& e)cepti"& t" te ru#e is were te drawer is *ui#ty "$ suc&e*#i*e&ce wic causes te ba&! t" "&"r suc cec!s' Gempesaw did &"t e)ercise prude&ce i& ta!i&* steps tata care$u# a&d prude&t busi&essma& w"u#d ta!e i& circumsta&ces t" disc"ver discrepa&cies i& er acc"u&t' er&e*#i*e&ce was te pr")imate cause "$ er #"ss, a&d u&der Secti"& 23 "$ te Ne*"tiab#e +&strume&ts aw, isprec#uded $r"m usi&* $"r*ery as a de$e&se'

7& te "ter a&d, te ba&!i&* ru#e ba&&i&* accepta&ce "$ cec!s $"r dep"sit "r cas payme&t wit m"re ta&"&e i&d"rseme&t uess c#eared by s"me ba&! "$$icia#s d"es &"t i&va#idate te i&strume&t8 &eiter d"es iti&va#idate te &e*"tiati"& "r tra&s$er "$ said cec!s' Te "y !i&d "$ i&d"rseme&t wic st"ps te $urter&e*"tiati"& "$ a& i&strume&t is a restrictive i&d"rseme&t wic pr"ibits te $urter &e*"tiati"& tere"$,pursua&t t" Secti"& 3 "$ te Ne*"tiab#e +&strume&ts aw'

+& #i*t "$ a&y case &"t pr"vided $"r i& te Act tat is t" be *"ver&ed by te pr"visi"&s "$ e)isti&* #e*is#ati"&,pursua&t t" Secti"& 19 "$ te Ne*"tiab#e +&strume&ts aw, te ba&! may be e#d #iab#e $"r dama*es i&acc"rda&ce wit Artic#e 11; "$ te Civi# C"de' Te drawee ba&!, i& its $ai#ure t" disc"ver te $raud c"mmitted byits emp#"yee a&d i& c"&trave&ti"& ba&!i&* ru#es i& a##"wi&* a cie$ acc"u&ta&t t" dep"sit te cec!s beari&*sec"&d i&d"rseme&ts, was ad

Negotiable Instrument Cases June 30, 2013

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