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Court of Appeals (GR 9252, 24 May 1993)
Sesbreno vs. CA GR 89252, 24 May 1993 Third Division, Feliciano (J) Facts: On 9 February 1981, Raul Sesbreno made a money market placement in the amount of P300,000 with the Philippine Underwriters Finance Corporation (PhilFinance), with a term of 32 days. PhilFinance issued to Sesbreno the Certificate of Confirmation of Sale of a Delta Motor Corporation Promissory Note (2731), the Certificate of Securities Delivery Receipt indicating the sale of the note with notation that said security was in the custody of Pilipinas Bank, and postdated checks drawn agains t the Insular Bank of Asia and America for P304,533.33 payable on 13 March 1981. The checks were dishonored for having been drawn against insufficient funds. Pilipinas Bank never released the note, nor any instrument related thereto, to Sesbreno; but Sesb reno learned that the security was issued 10 April 1980, maturing on 6 April 1981, has a face value of P2,300,833 .33 with PhilFinance as payee and Delta Motors as maker; and was stamped ³non -negotiable´ on its face. As Sesbreno was unable to collect his investment and interest thereon, he filed an action for damages against Delta Motors and Pilipinas Bank. Issue: Whether non-negotiability of a promissory note prevents its assignment. Held: Only an instrument qualifying as a negotiable instrument under the relevant statute may be negotiated either by indorsement thereof coupled with delivery, or by delivery alone if it is in bearer form. A negotiable instrument, instead of being negotiated, may also be assigned or transferred. The legal consequences of negotiation and assignment of the instrument are different. A negotiable instrument may not be negotiated but may be as signed or transferred, absent an express prohibition against assignment or transfer written in the face of the instrument. herein, there was no prohibition stipulated.
Haystack: Abubakar vs. Auditor General (GR L-1405, 31 July 1948)
Abubakar vs. Auditor General [G.R. No. L-1405. July 31, 1948.] First Division, Bengzon (J): 6 concurring Facts: Treasury Warrant A-2867376 was issued in favor of Placido S. Urbanes on 10 December 1941 for P1,000, but is now in the hands of Benjamin Abubakar. The Auditor refused to authorize the payment of the treasury warrant. Hence, the appeal. The Supreme Court dismissed the petition, with costs. 1. Treasury Warrant issued in favor of a government employee now in custody of a private individual There is no doubt as to the authenticity and date of the treasury warrant; and that it was regularly indorsed by the payee and is now in the custody of Abubakar, a private individual. On the other hand, the warrant was originally made payable to Urbanes i n his capacity as disbursing officer of the Food Administration for "additional cash advance for Food Production Campaign in La Union," and thus it is a treasury warrant issued in favor of a public officer or employee and held in possession by a private individ ual. Such being the case, the Auditor General can hardly be blamed for not authorizing its redemption out of an appropriation specifica lly for "treasury warrants issued . . . in favor of and held in possession by private individuals." (RA 80, Item F - IV-8.) This warrant was not issued in favor of a private individual. It was issued in favor of a government employee. 2. Intent of Legislature as to redemption of a class of warrant Outstanding treasury warrants issued prior to 2 January 1942, amount to more than P4 m illion. The appropriation is only for P1,750,000. Obviously Congress wished to provide for redemption of one class of warrants ² those issued to private individuals ² as distinguished from those issued in favor of government officials. Basis for the discri mination is not lacking. Probably the Government is not so sure that those warrants to officials have all been properly used by the latter during the Japanese occu pation or maybe it wants to conduct further inquiries as to the equities of the present holde rs thereof.
Urbanes on 10 December 1941 for P1. an d is not unconditional and does not fulfill one of the essential requirements of a negotiable instrument.750) and Cash (P135. Held: A treasury warrant is not a negotiable instrument. and does not fulfill one of the essential requirements of a negotiable instrument. Court of Appeals. it being an order for payment out of a ³particular fund´. 4 June 1993) Tibajia vs. Auditor General GR L-1405. Issue: Whether Abubakar is a holder in due course. Court of Appeals (GR 100290. (Section 3 last sentence an d section 1[b] of the Negotiable Instrument s Law. Intermediate Appellate Court). entitled to the rights and privileges of a holder in due course.733. is not legal tender. For one thing. Treasury or government warrants are not negotiable instruments A treasury warrant is not within the scope of the negotiable instruments law. but is now in the hands of Benjamin Abubakar. delivered to the deputy sheriff the total money judgment in the form of Cashier¶s Check (P262.000. 31 July 1948 First Division. the document bearing on its face the words "payable from the appropriation for food a dministration. sanctioning the use of a c heck for the payment of obligations over the objection of the creditor (For tunado vs. however. Padilla (J) Facts: A suit for collection of sum of money was ruled in favor of Eden Tan and against the spouses Norberto Jr." is actually an order for payment out of "a particular fund. The spouses. Court of Appeals (GR 100290. and an offer of a check in payment of a debt is not a valid tender of payment and may be refused receipt by the obligee or creditor (Philippine Airlines vs. CA GR 100290. The motion was denied.3. Therefore. Roman Catholic Bishop of Malolos vs. The Auditor refused to authorize the payment of the treasury warrant. Court of Appeals). and Carmen Tibajia. free from defenses. Abubakar contends he is a holder in good faith and for value and thus. by decision. Tan refused the payment an d insisted upon the garnished funds to satisfy the judgment obli gation. Digest: Tibajia vs. Bengzon (J) Facts: Treasury Warrant A-2867376 was issued in favor of Placide S." and is not unconditional. free from defenses. 4 June 1993 Second Division. whether a manager¶s check or ordinary check. The court is not. Therefore. Digest: Abubakar vs. Held: A check. Haystack: Tibajia vs. The spouses filed a motion to lift the writ of execution on the ground that the judgment debt had already been paid. a holder of a tre asury warrant cannot argue that he is a holder in good faith and for value of a negotiable instrument and thus entitled to the rights and privileges of a holder in due course.70). the holder of a treasury warrant cannot argue that he is a holder in good faith and for value of a negotiable instrument and is entitled to the rights and privileges of a holder in due course. government warrants for the payment of money are not negotiable instruments nor commercial paper. Issue: Whether the spouses have satisfied the judgment obligation after the delivery of the cashier¶s check and cash to the deputy sheriff.) In the United States. 31 July 1948) Abubakar vs. After the decision was made final. Auditor General (GR L-1405. 4 June 1993) . Tan filed a motion for execution and levied upon the garnished funds which were deposited by the spouses with the cashier of the Regional Trial Court of Pasig.
The motion for reconsideration was denied on 27 May 1991. Metro Manila. prohibition and injunction in the Court of Appeals (CA GR SP 24164)." 4. the motion was denied by the trial court on t he ground that payment in cashier's check is not payment in legal tender and that payment w as made by a third party other than the defendant. any obligation which purports to give the obligee the right to require payment in gold or in any particular kind of coin or currency other than Philippine currency or in an amount of money of the Philippines measured thereby. No. were levied upon. as amended. In the meantime. Intermed iate ." 2. and affirmed the appealed decision. Inc.00) and Cas h (P135. any obligation thereafter incurred. the garnished funds wh ich by then were on deposit with the cashier of the RTC Pasig. then in the currency which is legal tender in the Philippines. and if it is not possible to deliver such currency. CA [G. and no such provision shall be contained in. that a check which has been cleared and credited to the account of the creditor shall be equivalent to a delivery to the creditor of cash in an amount equal to the amount credited to his account. provides ³Every provis ion contained in. and of no effect.70).00 in another case. the action derived from the original obligation shall be held in abeyance. A motion for reconsideration was denied on 8 February 1991. vs.750. E very obligation heretofore and hereafter incurred.000. Article 1249 of the Civil Code Article 1249 of the Civil Code provides ³The payment of debts in money shall be made in the currency stipulated. Section 63 of RA 265 (Central Bank Act). Check not a legal tender In the recent cases of Philippine Airlines. vs. Branch 151 of Pasig. the spouses Tibajia filed a petition for certiorari. Court of Appeals and Roman Catholic Bishop of Malolos.733. and Carmen). ordering the Tibajia spouses to pay her an amount in excess of P300. as amended (Central Bank Act) provides ³Checks representing deposit money do not have legal tender power and their acceptance in the payment of debts. The Supreme Court denied the petition. both public and private. as amended Section 63 (Legal character) of RA 265." 3.750. the petition for review. On 15 January 1991. the Tibajia spouses delivered to Deputy Sheriff Eduardo Bolima the total money judgment in the form of Cashier's Check (P262. refused to accept the payment made by the Tibajia spouses and instead insisted that the garnished funds deposited with the cashier of the RTC Pasig be withdrawn to satisfy the judgment obligation.] Second Division. 1993. Tan filed the corresponding motion for execution and thereafter. or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed. The appellate court dismissed the petition on 24 April 1991 holding that payment by cashier's check is not payment in legal tender as required by RA 529. The decision having become final. shall be as it is hereby declared against public policy. the RTC. Metro Manila rendered its decision in Civil Case 54863 in favor of Tan. June 4. had been garnished by him. Inc. with costs against the spouses. On appeal.R. shall be discharged upon payment in any coin or currency which at the time of payment is legal tender for pu blic and private debts. whether or not any such provision as to payment is contained therein or made with respect thereto. 100290. A writ of attachment was issued by the trial court on 17 August 1987 and on 17 September 1987. however. On 14 December 1990. 1. or when through the fault of the creditor they have been impaired. the spouses filed a motion to lift the writ of execution on the ground that the judgment debt had already been paid. null and void. is a t the option of the creditor: Provided. On 29 January 1991. the Deputy Sheriff fi led a return stating that a deposit made by the Tibajia spouses in the RTC Kalookan City in the amount of P442. The delivery of promissory notes payable to order. the Court of Appeals modified the decision by reducing the award of moral and exemplary damages. or made with respect to.00. IAC. Section 1 of RA 529. PAL vs. Thereafter. Tan. On 10 March 1988. Hence. Padilla (J): 3 concurring Facts: Case 54863 was a suit for collection of a sum of money filed by Eden Tan against the Tibajia spouses (Norberto Jr.Tibajia vs. as amended Section 1 of RA 529. CA and Roman Catholic Bishop of Malolos vs. or made with respect to.
an action was brought and a cashier's check for the total amount of P55. is not legal tender. Jose Eduque. and an offer of a check in payment of a debt is not a valid tender of payment and may be refused receipt by the obligee or creditor. Salvacion F. Check as payment cannot be sanctioned over objection of the creditor In the more recent case of Fortunado vs. who refused to accept payment. Japanese military notes were legal tender during Japanese occupation. 6. después de descontar proporcionalmente cualesquiera cantidades por depósito y otros conceptos según los términos de la decición promulgada. Moran (CJ): 5 concurring Facts: On 16 February 1935. Payment of these two loans was guaranteed by mortgage on real property. Dr. Reyes. to issue dee ds for cancellation of the mortgage debts. the circumstances in the Philippine Airlines case ar e quite different from those in the present case for in that case the checks issued by the judgment debtor were made payable to the sheriff. De Eduque. After trial. By reason of such refusal. Fortunado vs. On 6 December 19 43. states that "If the PAL checks in question had not been encashed by Sheriff Reyes.000 deposited in court. No.000. there would be no payment by PAL and. 1950. the Court stressed that the Court is not." The order was issued accordingly and the sum P15.000 upon the ground that. Vda. Ocampo [G. Further. P55.000 out of the P55. And he asked the court to or der "que de la cantidad de P55. Circumstances in PAL case different The spouses erroneously relied on one of the dissenting opinions in the Philippine Airlines case to support their cause. one of the creditors. Ocampo accepted impliedly the consignation of the cashier's check when he himself asked the court that out of the money thus consigned he be paid the amount of the second . with interest at the rate of 5% per annum. and the principal error assi gned by Vda. the first in the amount of P40. April 26. The Supreme Court affirmed the judgment.000 was deposited in court .000. consequently. tendered payment. CA. Court of Appeals. Ocampo (GR L-222. by the decision ³sanctio ning the use of a check for the pay ment of obligations over the objection of the creditor. Doña Escolastica de los Reyes and Don Jose M. of the total amount of the two loans. Jose Eduque secured two loans from Mariano Ocampo de Leon. Ocampo. judgment was rendered against Ocampo compelling him to accept the P55.000. whet her a manager's check or ordinary check. Cashier¶s check a sufficient tender where no objection is made Japanese military notes were legal tender during the Japanese occupation. according to him." Moreover. both payable within the peri od of 20 years. Ocampo. cashier's or personal check. se entregue al demandado la suma de P15. on the contrary. L-222. no discharge or satisfaction of its judgment obligation.Appellate Court. In the mortgage contract it is stipulated that any of the mortgage creditors may receive payment and execute deeds of cancell ation of the mortgage debts. and to pay the expenses of consignation and costs. Em ilio Z. with costs against Ocampo.] Second Division. De Eduque vs.000 deposited in court was delivered to Ocampo. as administratrix of the estate of the deceased Dr.R.000 and the second in the sum of P15. 5. to Jose M. 1. by means of a cashier's check. De Eduque vs. 26 April 1950) Vda. the Court held that "A check. de Eduque is that tender of payment by means of a cashier's check representing Japanese war notes is not valid.000 consignada en este Juzgado. Reliance to a dissenting opinion in the PAL case erroneous. The present appeal concerns the decision of the lower court regarding the first loan of P40.000. whether it be a manager's. in the deed of mortgage corresponding to that l oan it clearly appeared that the loan was payable "durante el término de 20 años. Ocampo accepted the judgment with respect to the second loan of P15. The dissenting opinion does not in any way support the contention that a check is legal tender but." Haystack: Vda.000. who encashed the checks but failed to deliver the proceeds of said encashment to the judgment cred itor." and that the only question remaining between t he parties is the interpretation of the first deed of mortgage regarding the first loan of P40." The rulin g in these cases merely applies the statutory provi sions which lay down the rule that a check is not legal tender and that a creditor may validly refuse payment by check.
through the Chief of the Money Order Division of the Manila Post Office informed the bank of the irregular issuance of the money order. It is a rule that "a cashier's check may constitute a sufficient tender where no objection is made on this g round. 26 April 1950 Second Division.loan of P15. Philippine Education Co. J. both payable within 20 years with interest of 5% per annum." (62 C. For instance. By reason of such refusal. It was deposited by the company with the Bank of America. Held: Japanese military notes were legal tender during the Japanese occupation. 670. . Payment of the loans was guaranteed by mortgage on real property. as administratrix of the estate of Dr. Jose Eduque. who refused payment. vs.000). Ocampo. Dr. Issue: Whether postal money orders are negotiable instruments. with amount s of P40. de Eduque vs. p.. Moran (CJ) Facts: On 16 February 1935. see also 40 Amer. The company moved for reconsideration. offering to pay for them with a private check. postal money orders may be withheld under a variety of circumstances. Ocampo GR L-222. Upon discovery. message was sent to all postmasters and banks involving the unpaid money orders. Ocampo accepted the judgment as to the second loan but appealed as to the first loan.. Issue: Whether there is a tender of payment by means of a cashier¶s check representing war notes. etc. Held: Philippine postal statutes are patterned from those of the United States. Jose Eduque secured two loans from Mariano Ocampo de Leon. judgment was rendered against Ocampo compelling him to accept the amount.000 and P15. as part of its sales receipt. p.000. On 6 December 1943. Vda de Eduque. Dona Escolastica delos Reyes and Don Jose M. some of the restrictions imposed upon money order by postal laws and regulations are inconsistent with the character of negotiable instruments. and Ocampo impliedly accepted the consignation of the cashier¶s check when he asked the court that he be paid the amount of the second loan (P15. 30 June 1971 En Banc. The bank debited the account of the company.000. Dizon (J) Facts: Enrique Montinola sought to purchase from the Manila Post Office 10 money orders (P200 each). which cleared it with the Bureau of Post. Soriano GR L-22405. Salvacion F. Jur. an action was brought and the cashier¶s check was deposited in court. After trial. and which are restricted to not more than one indorsement. The Postmaster. to pay the expenses of consignation. Furthermore. 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 public¶s benefit. One of the money orders was received by the Philippine Education Co. tendered payment by means of a cashier¶s check representing Japanese War notes to Jose M. Ocampo. Montinola was able to leave the building with his check and the 10 money orders without the knowledge of the teller.) Vda. It is a rule that a cashier¶s check may constitute a sufficient tender where no objection is made on this ground. 764.
Subsequently. A creditor cannot oblige the debtor to pay in dollars. Arrieta sent a letter to NARIC. 31 May 1979 First Division. and the most that can be demanded is to pay the said obligation in Philippine currency. the indemnity is expressed in Philippine currency on the basis of the current rate of exchange at the time of payment Arrieta vs. if there is any agreement to pay an obligation in the currency other than Philippine legal tender. As a result of the delay in the opening of the letter of credit by NARIC. 31 January 1964 En Banc. with neither party entitled to recover under the ³in pari delicto´ rule. she was awarded the contract for the same. Held: As pronounced in Eastboard Navigation vs. Herein. On the second motion for reconsideration. and the most that could be demanded is to pay said obligation in Philippine currency to be measured in the prevailing rate of exchange at the time the obligation was incurred. The demand having been rejected.42 payable without interest on or before 31 July 1969. the same is illegal / null and void as contrary to public policy. Paz and Vitaliado Arrieta participated in the public bidding called by NARIC for the supply of 20. Upon failure of the debtors to pay.Ponce vs. however. Arrieta endeavored but failed to restore the cancelled Burmese rice allocation. Ad her bid of $203 per metric ton was the lowest. The trial court rendered judgment in favor of Ponce. the allocation of Arrieta¶s supplier in Rangoon was cancelled and the 5% deposit amounting to an equivalent of P200. even if the loan was given in said currency. a complaint was filed against them for the recovery of the principal sum. Ismael. Such offer was rejected by NARIC. when the contract was executed. the same is null and void as contrary to public policy (RA 529). and the execution of a first mortgage on their properties or the Carmen Planas Memorial Inc. the rate of exchange to be applied is that of 1 July 1952. demanding compensation for the damages caused her in the sum of US$286.868. the appellate court reversed the judgment and opined that the intent of the parties was that the note was payable in US dollars which is illegal. and thus offered Thailand rice instead. The Court of Appeals affirmed the decision of the trial court. Issue: Whether the rate of exchange to be applied in the conversion is that prevailing at the time of breach. or on the promulgation of the decision. Aurora Dino executed a promissory note in favor of Nelia Ponce in the sum of P814. she instituted the case. Held: If there is an agreement to pay an obligation in a currency other than Philippine legal tender. together with Feliza Mendoza and Ma. plus interest and damages. What RA 529 prohibits is the payment of an obligation in dollars. for such will allow a person to enrich himself inequitably at another¶s expense.000 representing unrealized profit. In such case.000 was forfeited. . subject to an interest of 12% per annum if not paid at maturity. It cannot defeat a creditor¶s claim for payment. pursuant to RA 529. Regala (J) Facts: On 19 May 1952. CA GR L-49444. Jesus Afable. Melencio-Herrera (J) Facts: On 3 June 1969. in the event of failure to pay the indebtedness in accordance with the terms. National Rice & Corn Corporation (NARIC) GR L-15645. Issue: Whether an agreement to pay in dollars defeat a creditor¶s claim for payment. and an additional sum equivalent to 10% of total amount due as attorney¶s fees in case it is necessary to bring suit. or at the time the obligation was incurred.000 metric tons of Burmese rice.
and thus the rate of exchange should be that prevailing at the time of payment. i. and P25. Zaldivar (J) Facts: On 17 November 1959. P55. said draft being sent later to Aruego for acceptance. the provision of the statute which requires payment at the prevailing rate of exchange when the obligation was incurred cannot be applied.000 (representing 20% of the amount paid to Luz in the International Research Institute project) and the balance of P30. that paper is considered a bill of exchange. a bill of exchange is an unconditional order in writing addressed by one person to another. The trial court did not err in holding the rate of exchange is that at the time of payment. Held : Under the Negotiable Instruments Law. Velasco & Co. Held: Luz¶ obligation to pay Kalalo the sum of US$28. On 18 May 1962.000 as moral damages.505. . Aruego GR L-25836-37. Kalalo filed a complaint containing 4 causes of action. Philippine Bank of Commerce vs. Issue : Whether the drafts were bills of exchange or mere pieces of evidence of indebtedness. As long as a commercial paper conforms with the definition of a bill of exchange. Luz sent Kalalo a resume of fees due to the latter. RA 529 does not provide for the rate of exchange for the payment of obligation incurred after the enactment of the Act. The view finds support in the ruling of the Court in Engel vs.25 as fees.Kalalo vs.881. attorney¶s fees and litigation expenses). required Aruego to execute a trust receipt in favor of the bank wherein Aruego undertook to hold in trust for the bank the periodicals and to sell the same with the promise to turn over to the bank the proceeds of the sale to answer for the payment of all obligations arising from the draft. On 11 December 1961.08. Fernandez (J) Facts: Jose Aruego publishes a periodical called ³World Current Events.000 as actual damages. Issue: Whether the rate of exchange of dollar to peso are those at the time of the payment of the judgment or at the time when the research institute project became due and demandable. attorney¶s fees and litigation expenses. Kalalo refused to accept the check as full payment of the balance of the fees due him.´ To facilitate payment of the printing.861. the printer (Encal Press and Photo-Engraving) collected the cost of printing by drawing a draft against the bank. The trial court ruled in favor of Kalalo. P17. or after the enactment of RA 529 (16 June 1950). Thus. but not in the determination of whether a commercial paper is a bill of exchange or not. Octavio Kalalo entered into an agreement with Alfredo Luz where he was to render engineering design services for a fee. Luz filed an appeal directly with the Supreme Court raising only questions of law.0000 as consequential and moral damages. On 10 August 1962. As an added security for the payment of the amounts advanced to the printe the bank also r.e. Kalalo sent Luz a statement of account where the balance due for services rendered was P59. $28. For every printing of the periodical.000 accrued on 25 August 1961. The bank instituted an action against Aruego to recover the cost of printing of the latter¶s periodical for the period of 28 August 1950 to 14 March 1951. requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer. and a check for P10. Luz GR L-27782. signed by the person giving it. The nature of acceptance is important only in the determination of the kind of liabilities of the parties involved. 31 July 1970 En Banc. 31 January 1981 First Division. Aruego obtained a credit accommodation from the Philippine Bank of Commerce.
Under the Negotiable Instruments Law. a drawee is primarily liable. The bank instituted an action against Aruego to recover the cost of printing of the latter¶s periodical for the period of 28 August 1950 to 14 March 1951. pursuant to Section 20 of the Negotiable Instruments Law. signed by the person giving it. Aruego GR L-25836-37.Issue : Whether Aruego is an agent of Philippine Education Fou ndation Company when he signed the supposed bills of exchange. acceptor. 31 January 1981 First Division. If Aruego intended to be secondarily liable only. said draft being sent later to Aruego for acceptance. Held : Nowhere in the drafts accepted by Aruego that he disclosed that he was signing as representative of the Philippine Education Foundation Company. the printer (Encal Press and Photo -Engraving) collected the cost of printing by drawing a draft against the bank. Issue : Whether Aruego is primarily liable. Aruego obtained a credit accommodation from the Philippine Bank of Commerce. As long as a commercial paper conforms with the definition of a bill of exchange. he should not have signed as an acceptor / drawee. he became primarily and personally liable for the drafts. Held : An accommodation party is one who has signed the instrument as maker. pursuant to Section 20 of the Negotiable Instruments Law. Philippine Bank of Commerce vs. that paper is considered a bill of exchange. For failure to disclose his principal. a bill of exchange is an unconditional order in writing addressed by one person to another. For failure to disclose his principal. Aruego is personally liable for the drafts he accepted. without receiving value therefor and for the purpose of lending his name to some other person. In doing so. indorser. Aruego is personally liable for the drafts he accepted. Issue : Whether Aruego is an agent of Philippine Education Foundation Company when he signed the supposed bills of exchange. As an added security for the payment of the amounts advanced to the printer. Held : Under the Negotiable Instruments Law. Issue : Whether the drafts were bills of exchange or mere pieces of evidence of indebtedness. the bank also required Aruego to execute a trust receipt in favor of the bank wherein Aruego undertook to hold in trust for the bank the periodicals and to sell the same with the promise to turn over to the bank the proceeds of the sale to answer for the payment of all obligations arising from the draft. Herein. Fernandez (J) Facts: Jose Aruego publishes a periodical called ³World Current Events. drawer. . requiring the person to whom it is addressed to pay on demand or at a fixed or determinable fu ture time a sum certain in money to order or to bearer. but not in the determination of whether a commercial paper is a bill of exchange or not.´ To facilitate payment of the printing. Aruego signed as a drawee / acceptor. Held : Nowhere in the drafts accepted by Aruego that he disclosed that he was signing as representative of the Philippine Education Foundation Company. For every printing of the periodical. Issue : Whether Aruego is primarily liable. The nature of acceptance is important only in the determination of the kind of liabilities of the parties involved.
Held : An accommodation party is one who has signed the instrument as maker. in the currency then prevailing. In doing so. he should not have signed as an acceptor / drawee. belonging to Mabanto until delivered to him. As ordinarily understood. Issue: Whether the amounts should be paid. Acknowledging receipt by Pacita during the Japanese occupation. The claimant objected to the adjustment insisting on full payment in accordance with the notes. and peso-for-peso payment shall be ordered in Philippine currency. Burgos GR 111190. judgment was rendered ordering Mabanto to pay Sesbreno P11. Bengzon (J) Facts: In the proceedings in the intestate of Luther Young and Pacita Young who died in 1954 and 1952. The writ of execution was issued despite Mabant o¶s objection. Held: If the loan was expressly agreed to be payable only after the war. Under the Negotiable Instruments Law. Dela Victoria vs. the Administrator manifested willingness to pay provided adjustment of the sums be made in line with the Ballantyne schedule. acceptor. the debtor undertook to pay ³six months after the war. Herein. Aruego signed as a drawee / acceptor. the salary check of a government officer or employee does not . delivery means the transfer of the pos session of the instrument by the maker or drawer with the intent to transfer title to the payee and recognize him as the holder thereof. Hence. Herein. drawer. and as such are still public funds which could not be subject of garnishment. A notice of garnishment was served upon Loreto de la Victoria as City Fiscal of Mandaue City where Mabanto was then detailed. peso for peso. a drawee is primarily liable.´ peso for peso payment is indicated. If Aruego intended to be secondarily liable only. no reduction could be effected. Bellosillo (J) Facts: Raul Sesbreno filed a complaint for damages against Assistant City Fiscal Bienvenido Mabanto before the RTC of Cebu City. the appeal.000 plus P2. 28 February 1958 En Banc. or became payable after those dates. De la Victoria moved to quash the notice of garnishment claiming that he was not in possession of any money. without receiving value therefor and for the purpose of lending his name to some other person. 27 June 1995 First Division. Pacifica Jimenez presented for payment 4 promissory notes signed by Pacita for different amounts totalling P21. indorser. Held: Under Section 16 of the Negotiable Instruments Law. Bucoy GR L-10221. The court held that the notes should be paid in the currency prevailing after the war. respectively.000 as attorney¶s fees. The Ballantyne Conversion Table does not apply where the monetary obligation. After trial. under the contract. or whether a reduction should be made in accordance with the Ballantyne schedule. etc.000. and thus entitling Jimemez to recover P21. or after liberation. was not payable during the Japanese occupation. Jimenez vs. the trial court ordered its execution upon Sesbreno¶s motion. funds. Herein.000.. every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. he became primarily and personally liable for the drafts. Issue: Whether the checks subject of garnishment belong to Mabanto or whether they still belong to the government. The decision having become final and executory.
he executed a notarized Deed of Assignment of Time Deposit in favor of the bank. a valid negotiation thereof for the true purpose and agreement between it (Caltex) and de la Cruz requires both delivery and indorsement. As a necessary consequence of being public fund. or legal title. through its Sucat branch.000 from the bank. etc. dela Cruz informed the bank that he lost all the CTDs.e. Security Bank and Trust Co.12 million. In 1983. Campos Jr. 10 August 1992 Second Division. CA GR 97753. the CTDs are negotiable instruments (Section 1). must be contractually provided for.belong to him before it is physically delivered to him. there was no negotiation in the sense of a transfer of title. in the event of non-payment of the principal obligation. Contrary to the lower court¶s findings. vs. The documents provided that the amounts deposited shall be repayable to the depositor. Regalado (J) Facts: On various dates. Caltex formally informed the bank of its possession of the CTDs and its decision to preterminate the same. CA GR 93073. 21 December 1992 Second Division. and in turn. Caltex presented for verification the CTDs (which were declared lost by de la Cruz) with the bank. The delivery thereof as security for the fuel purchases at most constitutes Caltex as a holder for value by reason of his lien. Subsequently. Held : Although the CTDs are bearer instruments. i. Negotiability or nonnegotiability of an instrument is determined from the writing. issued 280 certificates of time deposit (CTD) in favor of one Angel dela Cruz who deposited with the bank the aggregate amount of P1. (J) . from the face of the instrument itself. the checks may not be garnished to satisfy the judgment. and not for payment.e. whosoever may be the bearer at the time of presentment. to the CTDs in which situation mere delivery of the bearer CTDs would have sufficed. Thereafter. but which was dismissed. after Caltex failed to furnish copy of the requested documents evidencing the guarantee agreement. Issue : Whether the Certificates of Time Deposit (CTDs) are negotiable instruments. de la Cruz¶ loan matured and the bank set-off and applied the time deposits as payment for the loan. Herein. a negotiation for such purpose cannot be effected by mere delivery of the instrument since the terms thereof and the subsequent disposition of such security. The bank rejected Caltex¶ claim and demand. i. as the CTDs were delivered to it as security for dela Cruz¶ purchases of its fuel products. they did not belong to him and still had the character of public funds. Accordingly. and thus executed an affidavit of loss to facilitate the issuance of the replacement CTDs. Republic Planters Bank vs. Held : The CTDs in question meet the requirements of the law for negotiability. Inasmuch as said checks had not yet been delivered to Mabanto. Issue : Whether the CTDs¶ negotiation require delivery only. Anger de la Cruz delivered the CTDs to Caltex in connection with his purchase of fuel products from the latter. Caltex filed the complaint. (SEBTC). Caltex (Philippines) Inc. De la Cruz was able to obtain a loan of P875. The amounts are to be repayable to the bearer of the documents.
Issue: Whether the corporate treasurer is liable for the amounts in the promissory notes. . and cannot escape liability arising therefrom. y As the promissory notes are stereotype ones issued by the bank in printed form with blank spaces filled up as per agreed terms of the loan. Three years after. Inasmuch as the instrument contained the words ³I promise to pay´ and is signed by two or more persons. Worldwide Garment Manufacturing changed its name to Pinch Manufacturing Corp. Section 14 of the Negotiable Instruments Law. Canlas alleged he was not liable personally for the corporate acts that he performed.Facts: Republic Planters Bank issued 9 promissory notes signed by Shozo Yam aguchi (President) and Fermin Canlas (Treasurer) of Worldwide Garment Manufacturing Inc. and that the notes were still blank when he signed them. therefore. leaving the debtors to do nothing but read the terms and conditions therein and to sign as makers or co-makers. Held: Canlas is a co-maker of the promissory notes. Yamaguchi and Canlas were authorized by the corporation to apply for credit facilities with the bank in form of export advances and letters of credit or trust receipts accommodations. under the law. said persons are deemed to be jointly and severall liable thereon. the bank filed an action to recover the sums of money covered by the promissory notes. does not apply. following customary procedures. Canlas is solidarily liable with the corporation for the amount of the 9 promissory notes.
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