Traders Royal Bank v CA

Facts:
In November 1979 a detached assignment was entered into by Filriters and Philfinance, where
Certificates of Indebtedness (CBCIs) D890 to D896 were transferred from Philriters to Philfinance, in the
total amount of P3.5 million. Via a Repurchase Agreement, CBCI D891, worth P500,000 was transferred
to Traders. Philfinance thereafter failed to repurchase the CBCIs due to dishonored checks. Traders then
sought to have the CBCI transferred in its name, but the Central Bank refused. As stated at the back of
the CBCI No transfer is valid unless made by the registered owner or its authorized representative in
writing.

Held:
It was Alfredo Banaria who signed the Deed of Assignment, and he was not duly authorized to do so. He
was also not duly authorized by Filriters in writing. The CBCI is also not negotiable, because it lacks the
words of negotiability: does not state that it is payable to bearer or to the order of a specified person.
The CBCI is part of the reserved investments required by the Insurance Code, and thus cannot be
withdrawn.