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G.R. No.

74917 January 20, 1988

*92+, respondents.
It appears that some time in March, April, May and August 1983, plaintiff
through its Visa Card epartment, dre! si" crossed Manager#s chec$
%&"hi'its (A( to ()(, and herein referred to as Chec$s* having an aggregate
amount of )orty )ive +housand ,ine -undred and &ighty +!o . /30111
%234,98/./3* 2esos and paya'le to certain mem'er esta'lishments of Visa
Card. 5u'se6uently, the Chec$s !ere deposited !ith the defendant to the
credit of its depositor, a certain Aida +rencio.
)ollo!ing normal procedures, and after stamping at the 'ac$ of the Chec$s
the usual endorsements. All prior and0or lac$ of endorsement guaranteed the
defendant sent the chec$s for clearing through the 2hilippine Clearing -ouse
Corporation %2C-C*. Accordingly, plaintiff paid the Chec$s7 its clearing
account !as de'ited for the value of the Chec$s and defendant#s clearing
account !as credited for the same amount,
+hereafter, plaintiff discovered that the endorsements appearing at the 'ac$
of the Chec$s and purporting to 'e that of the payees !ere forged and0or
unauthori8ed or other!ise 'elong to persons other than the payees.
2ursuant to the 2C-C Clearing 9ules and 9egulations, plaintiff presented
the Chec$s directly to the defendant for the purpose of claiming
reim'ursement from the latter. -o!ever, defendant refused to accept such
direct presentation and to reim'urse the plaintiff for the value of the Chec$s7
hence, this case.
In its Complaint, plaintiff prays for :udgment to re6uire the defendant to pay
the plaintiff the sum of 234,98/./3 !ith interest at the rate of 1/; per annum
from the date of the complaint plus attorney#s fees in the amount of
211,111.11 as !ell as the cost of the suit.
In accordance !ith 5ection 38 of the Clearing -ouse 9ules and 9egulations,
the dispute !as presented for Ar'itration7 and Atty. Ceasar <ueru'in !as
designated as the Ar'itrator.
After an e"haustive investigation and hearing the Ar'iter rendered a decision
in favor of the plaintiff and against the defendant ordering the 2C-C to de'it
the clearing account of the defendant, and to credit the clearing account of
the plaintiff of the amount of 234,98/./3 !ith interest at the rate of 1/; per
annum from date of the complaint and Attorney#s fee in the amount of
24,111.11. ,o pronouncement as to cost !as made.
In a motion for reconsideration filed 'y the petitioner, the =oard of irectors of the 2C-C
affirmed the decision of the said Ar'iter in this !ise>
In vie! of all the foregoing, the decision of the Ar'iter is confirmed7 and the
2hilippine Clearing -ouse Corporation is here'y ordered to de'it the clearing
account of the defendant and credit the clearing account of plaintiff the
amount of )orty )ive +housand ,ine -undred &ighty +!o . /30111
%234,98/./3* 2esos !ith interest at the rate of 1/; per annum from date of
the complaint, and the Attorney#s fee in the amount of )ive +housand
%24,111.11* 2esos.
?ere the su':ect chec$s non@negotia'le and if not, does it fall under the am'it of the po!er
of the 2C-CA
Vie!ing these provisions the conclusion is clear that the 2C-C 9ules and 9egulations
should not 'e interpreted to 'e applica'le only to chec$s !hich are negotia'le instruments
'ut also to non@negotia'le instruments and that the 2C-C has :urisdiction over this case
even as the chec$s su':ect of this litigation are admittedly non@negotia'le.
G.R. No. 977,- Au.u/0 10, 1992
CA#TE) *$%I#I$$INES+, INC., petitioner,
CO"RT O& A$$EA#S an1 SEC"RIT( BAN AND TR"ST COM$AN(, respondents.
Bito, Lozada, Ortega & Castillo for petitioners.
Nepomuceno, Hofilea & Guingona for private.
1. En various dates, defendant, a commercial 'an$ing institution, through its
5ucat =ranch issued /81 certificates of time deposit %C+s* in favor of one
Angel dela Cru8 !ho deposited !ith herein defendant the aggregate amount
of 21,1/1,111.11, as follo!s> %Foint 2artial 5tipulation of )acts and 5tatement
of Issues, Eriginal 9ecords, p. /1G7 efendant#s &"hi'its 1 to /81*7
ates !erial Nos. "uantit# $mount
// )e'. 8/ 91111 to 911/1 /1 281,111
/H )e'. 8/ G3H1/ to G3H91 91 3H1,111
/ Mar. 8/ G3G11 to G3G31 31 1H1,111
3 Mar. 8/ 911/G to 9113H /1 81,111
4 Mar. 8/ G3G9G to 93811 3 1H,111
4 Mar. 8/ 899H4 to 8998H // 88,111
4 Mar. 8/ G113G to 91141 3 1H,111
8 Mar. 8/ 91111 to 911/1 /1 81,111
9 Mar. 8/ 911/3 to 91141 /8 11/,111
9 Mar. 8/ 89991 to 91111 11 31,111
9 Mar. 8/ 91/41 to 91/G/ // 88,111
+otal /81 21,1/1,111
/. Angel dela Cru8 delivered the said certificates of time %C+s* to herein
plaintiff in connection !ith his purchased of fuel products from the latter
%Eriginal 9ecord, p. /18*.
3. 5ometime in March 198/, Angel dela Cru8 informed Mr. +imoteo +iangco,
the 5ucat =ranch Manger, that he lost all the certificates of time deposit in
dispute. Mr. +iangco advised said depositor to e"ecute and su'mit a
notari8ed Affidavit of Coss, as re6uired 'y defendant 'an$#s procedure, if he
desired replacement of said lost C+s %+5,, )e'ruary 9, 198G, pp. 38@41*.
3. En March 18, 198/, Angel dela Cru8 e"ecuted and delivered to defendant
'an$ the re6uired Affidavit of Coss %efendant#s &"hi'it /81*. En the 'asis of
said affidavit of loss, /81 replacement C+s !ere issued in favor of said
depositor %efendant#s &"hi'its /8/@4H1*.
4. En March /4, 198/, Angel dela Cru8 negotiated and o'tained a loan from
defendant 'an$ in the amount of &ight -undred 5eventy )ive +housand
2esos %28G4,111.11*. En the same date, said depositor e"ecuted a notari8ed
eed of Assignment of +ime eposit %&"hi'it 4H/* !hich stated, among
others, that he %de la Cru8* surrenders to defendant 'an$ (full control of the
indicated time deposits from and after date( of the assignment and further
authori8es said 'an$ to pre@terminate, set@off and (apply the said time
deposits to the payment of !hatever amount or amounts may 'e due( on the
loan upon its maturity %+5,, )e'ruary 9, 198G, pp. H1@H/*.
H. 5ometime in ,ovem'er, 198/, Mr. Aranas, Credit Manager of plaintiff
Calte" %2hils.* Inc., !ent to the defendant 'an$#s 5ucat 'ranch and presented
for verification the C+s declared lost 'y Angel dela Cru8 alleging that the
same !ere delivered to herein plaintiff (as security for purchases made !ith
Calte" 2hilippines, Inc.( 'y said depositor %+5,, )e'ruary 9, 198G, pp. 43@
G. En ,ovem'er /H, 198/, defendant received a letter %efendant#s &"hi'it
4H3* from herein plaintiff formally informing it of its possession of the C+s in
6uestion and of its decision to pre@terminate the same.
8. En ecem'er 8, 198/, plaintiff !as re6uested 'y herein defendant to
furnish the former (a copy of the document evidencing the guarantee
agreement !ith Mr. Angel dela Cru8( as !ell as (the details of Mr. Angel dela
Cru8( o'ligation against !hich plaintiff proposed to apply the time deposits
%efendant#s &"hi'it 4H3*.
9. ,o copy of the re6uested documents !as furnished herein defendant.
11. Accordingly, defendant 'an$ re:ected the plaintiff#s demand and claim for
payment of the value of the C+s in a letter dated )e'ruary G, 1983
%efendant#s &"hi'it 4HH*.
11. In April 1983, the loan of Angel dela Cru8 !ith the defendant 'an$
matured and fell due and on August 4, 1983, the latter set@off and applied the
time deposits in 6uestion to the payment of the matured loan %+5,, )e'ruary
9, 198G, pp. 131@131*.
1/. In vie! of the foregoing, plaintiff filed the instant complaint, praying that
defendant 'an$ 'e ordered to pay it the aggregate value of the certificates of
time deposit of 21,1/1,111.11 plus accrued interest and compounded
interest therein at 1H; per annum, moral and e"emplary damages as !ell as
attorney#s fees.
%1* that the su':ect certificates of deposit are non@negotia'le despite 'eing clearly negotia'le
?e disagree !ith these findings and conclusions, and here'y hold that the C+s in 6uestion
are negotia'le instruments. 5ection 1 Act ,o. /131, other!ise $no!n as the ,egotia'le
Instruments Ca!, enumerates the re6uisites for an instrument to 'ecome negotia'le, viz>
%a* It must 'e in !riting and signed 'y the ma$er or dra!er7
%'* Must contain an unconditional promise or order to pay a sum certain in
%c* Must 'e paya'le on demand, or at a fi"ed or determina'le future time7
%d* Must 'e paya'le to order or to 'earer7 and
%e* ?here the instrument is addressed to a dra!ee, he must 'e named or
other!ise indicated therein !ith reasona'le certainty.
+he C+s in 6uestion undou'tedly meet the re6uirements of the la! for negotia'ility. +he
parties# 'one of contention is !ith regard to re6uisite %d* set forth a'ove. It is noted that Mr.
+imoteo 2. +iangco, 5ecurity =an$#s =ranch Manager !ay 'ac$ in 198/, testified in open
court that the depositor reffered to in the C+s is no other than Mr. Angel de la Cru8.
""" """ """
Atty. Calida>
6 In other !ords Mr. ?itness, you are saying that per 'oo$s
of the 'an$, the depositor referred %sic* in these certificates
states that it !as Angel dela Cru8A
a Kes, your -onor, and !e have the record to sho! that Angel
dela Cru8 !as the one !ho cause %sic* the amount.
Atty. Calida>
6 And no other person or entity or company, Mr. ?itnessA
a ,one, your -onor.
""" """ """
Atty. Calida>
6 Mr. ?itness, !ho is the depositor identified in all of these
certificates of time deposit insofar as the 'an$ is concernedA
a Angel dela Cru8 is the depositor. 8
""" """ """
En this score, the accepted rule is that the negotia'ility or non@negotia'ility of an instrument
is determined from the !riting, that is, from the face of the instrument itself.
In the
construction of a 'ill or note, the intention of the parties is to control, if it can 'e legally
?hile the !riting may 'e read in the light of surrounding circumstances in order to
more perfectly understand the intent and meaning of the parties, yet as they have constituted the
!riting to 'e the only out!ard and visi'le e"pression of their meaning, no other !ords are to 'e
added to it or su'stituted in its stead. +he duty of the court in such case is to ascertain, not !hat
the parties may have secretly intended as contradistinguished from !hat their !ords e"press, 'ut
!hat is the meaning of the !ords they have used. ?hat the parties meant must 'e determined 'y
!hat they said.
Contrary to !hat respondent court held, the C+s are negotia'le instruments. +he
documents provide that the amounts deposited shall 'e repaya'le to the depositor. And !ho,
according to the document, is the depositorA It is the ('earer.( +he documents do not say
that the depositor is Angel de la Cru8 and that the amounts deposited are repaya'le
specifically to him. 9ather, the amounts are to 'e repaya'le to the 'earer of the documents
or, for that matter, !hosoever may 'e the 'earer at the time of presentment.
If it !as really the intention of respondent 'an$ to pay the amount to Angel de la Cru8 only, it
could have !ith facility so e"pressed that fact in clear and categorical terms in the
documents, instead of having the !ord (=&A9&9( stamped on the space provided for the
name of the depositor in each C+. En the !ordings of the documents, therefore, the
amounts deposited are repaya'le to !hoever may 'e the 'earer thereof. +hus, petitioner#s
aforesaid !itness merely declared that Angel de la Cru8 is the depositor (insofar as the 'an$
is concerned,( 'ut o'viously other parties not privy to the transaction 'et!een them !ould
not 'e in a position to $no! that the depositor is not the 'earer stated in the C+s. -ence,
the situation !ould re6uire any party dealing !ith the C+s to go 'ehind the plain import of
!hat is !ritten thereon to unravel the agreement of the parties thereto through
facts aliunde. +his need for resort to e"trinsic evidence is !hat is sought to 'e avoided 'y the
,egotia'le Instruments Ca! and calls for the application of the elementary rule that the
interpretation of o'scure !ords or stipulations in a contract shall not favor the party !ho
caused the o'scurity.
G.R. No. 744,1 May 2,, 1988
CO., respondents.
%illiam &. 'eto for petitioner.
(elaez, $driano & Gregorio for respondents.