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MONTINOLA, plaintiff-appellant,
THE PHILIPPINE NATIONAL BANK, ET AL., defendants-appellees.
In August, 1947, Enrique P. Montinola filed a complaint in te !ourt of "irst Instance of Manila against te Pilippine #ational
$an% and te Provincial &reasurer of Misamis 'riental to collect te sum of P1((,(((, te amount of !ec% #o. 1)*+ issued on
Ma, +, 194+ -, te Provincial &reasurer of Misamis 'riental to Mariano .. /amos and supposedl, indorsed to Montinola. After
earing, te court rendered a decision dismissing te complaint 0it costs against plaintiff-appellant. Montinola as appealed
from tat decision directl, to tis !ourt inasmuc as te amount in controvers, e1ceeds P2(,(((.
In April and Ma,, 194+, 3-aldo 4. 5a,a 0as te Provincial &reasurer of Misamis 'riental. As suc Provincial &reasurer e
0as ex officio agent of te Pilippine #ational $an% -ranc in te province.
Mariano .. /amos 0or%ed under im as assistant agent. In April of tat ,ear 194+, te currenc, -eing used in Misamis 'riental
and 5anao 0ic ad not ,et -een occupied -, te 6apanese invading forces, 0as te emergenc, currenc, 0ic ad -een
issued since 6anuar,, 194+ -, te Mindanao Emergenc, !urrenc, $oard -, autorit, of te late President 7ue8on.
A-out April +9, 194+, tru te recommendation of Provincial &reasurer 5a,a, his assistant agent M. V. Ramos as in!"#te!
into the Unite! $tates A%me! &o%#es in the &a% East 'U$A&&E( as !is)"%sing o**i#e% o* an a%m+ !i,ision.
As suc dis-ursing officer, M. .. /amos 0ent to te neig-oring Province 5anao to -%o#"%e a #ash a!,an#e in the
amo"nt o* P.//,/// *o% the "se o* the U$A&&E in 0aga+an !e Misamis.
Pedro Encarnacion, Provincial &reasurer of 5anao did not ave tat amount in cas. $o, he ga,e Ramos P1//,///
in eme%gen#+ notes an! a #he#2 *o% P3//,///.
/amos 0ent to te office of Provincial &reasurer 5a,a at Misamis 'riental to en#ash the #he#2 *o% P3//,///. 5a,a
did not ave enoug cas to cover te cec% so e gave /amos P4((,((( in emergenc, notes and a cec% #o. 1)*+
for P1((,((( dra0n on P#$. According to 5a,a e ad previousl, deposited P2((,((( emergenc, notes in te P#$
-ranc in !e-u and e e1pected to ave te cec% issued -, im cased in !e-u against said deposit.
/amos ad no opportunit, to cas te cec% -ecause in te evening of te same da, te cec% 0as issued to im,
te 6apanese forces entered te capital of Misamis 'riental, and te 3:A""E forces to 0ic e 0as attaced
surrendered. /amos 0as made a prisoner of 0ar until "e-ruar, 1+, 194), after 0ic, e 0as released and e
resumed is status as a civilian.
A-out te last da,s of 1944 or te first da,s of 6anuar,, 1942, M. V. Ramos a44ege!4+ in!o%se! this #he#2 No. 51.6 to
En%i7"e P. Montino4a.
M'#&I#'5A;s version< sometime in 6une, 1944, Ramos, nee!ing mone+ ith hi#h to )"+ *oo!st"**s an!
me!i#ine, o**e%e! to se44 him the #he#28 to )e s"%e that it as gen"ine an! negotia)4e, Montinola, accompanied
-, is agents and -, /amos imself, 0ent to see President !armona of te P#$ in Manila a-out said cec%=
tat after e1amining it President !armona told im tat it 0as negotia-le -ut tat e sould not let te 6apanese catc
im 0it it -ecause possession of te same 0ould indicate tat e 0as still 0aiting for te return of te Americans to
te Pilippines=
e and /amos *ina44+ ag%ee! to the sa4e o* the #he#2 *o% P.3/,/// 9a-anese mi4ita%+ notes, -a+a)4e in
insta44ments8 that o* this amo"nt, P:3/,/// as -ai! to Ramos in 9a-anese mi4ita%+ notes in *i,e insta44ments,
and te -alance of P4((,((( 0as -ai! in 2in!, name4+, *o"% )ott4es o* s"4-hatia so4e, ea#h )ott4e #ontaining
1,((( ta-lets, and eac ta-let valued at P1((=
upon pa,ment of te full price, M. V. Ramos !"4+ in!o%se! the #he#2 to him. &is indorsement 0ic no0 appears
on te -ac% of te document is descri-ed in detail -, trial court as follo0s<
&e 0oods, >pa, to te order of> ? in ru--er stamp and in violet color are placed a-out one inc from te top.
&is is follo0ed -, te 0ords >Enrique P. Montinola> in t,pe0riting 0ic is appro1imatel, 2@* an inc -elo0 te
stamped 0ords >pa, to te order of>.
$elo0 >Enrique P. Montinola>, in t,pe0riting are 0ords and figures also in t,pe0riting, >217 Isa-el :treet> and
a-out A@* of an inc terefrom, the e!ges o* the #he#2 a--ea% to ha,e )een )"%ne!, )"t the%e a%e o%!s
stam-e! a--a%ent4+ in %"))e% stam- hi#h, a##o%!ing to Montino4a, a%e a *a#simi4e o* the signat"%e o*
Ramos. &ere is a signature 0ic apparentl, reads >M. .. /amos> also in green in% -ut made in and0riting.>
te name of M. .. /amos is and printed in green in%, under te signature. According to Montinola, e as%ed
/amos to and print it -ecause /amos; signature 0as not clear.
/amos< te agreement -et0een imself and Montinola regarding te transfer of te cec% 0as tat he as se44ing on4+
P1/,/// o* the #he#2 and for tis reason, at te -ac% of te document e 0rote in longand te follo0ing<
Pa, to te order of Enrique P. Montinola P1/,/// on4+. &e -alance to -e deposited in te P#$ to te credit of M. ..
/amos furter said tat in e;#hange *o% this assignment o* P1/,/// Montino4a o"4! -a+ him P</,/// in
9a-anese mi4ita%+ notes )"t that Montino4a ga,e him on4+ to #he#2s o* P6/,/// an! P63,///, leaving a -alance
"n-ai! o* P:3,///.
e 0as corro-orated -, Att,. :imeon /amos 6r. 0o told te court tat te agreement -et0een /amos and Montinola
0as tat te M'#&I#'5A, for te sale to im of P)(,((( of te cec%, 0as to pa, /amos P9(,((( in 6apanese
militar, notes= tat 0en te first cec% for P+(,((( 0as issued -, Montinola, e B:imeonC prepared a document
evidencing said pa,ment of P+(,(((= tat 0en te second cec% for P+2,((( 0as issued -, Montinola, e B:imeonC
prepared anoter document 0it t0o copies, one for Montinola and te oter for /amos, -ot signed -, Montinola and
M. .. /amos, evidencing said pa,ment, 0it te understanding tat te -alance of P42,((( 0ould -e paid in a fe0
&e indorsement or 0riting !es#%i)e! )+ M. V. Ramos hi#h ha! )een %itten )+ him at the )a#2 o* the #he#2,
!oes not no a--ea% at the )a#2 o* sai! #he#2.
Dat appears tereon is te indosement testified to -, Montinola.
Den Montinola filed is complaint in 1947 e stated terein tat te cec% ad -een lost, and so in lieu tereof e filed a
supposed potostic cop,.
Eo0ever, at te trial, e presented te cec% itself and ad its face mar%ed E1i-it A and te -ac% tereof E1i-it A-1.
B"t the #he#2 is )a!4+ m"ti4ate!, )ott4e!, to%n an! -a%t4+ )"%ne!, an! its #on!ition #an )est )e a--%e#iate! )+ seeing it.
loo%ing at te face of te cec% BE1i-it AC 0e see tat the 4e*t thi%! -o%tion o* the -a-e% has )een #"t o**
-e%-en!i#"4a%4+ an! se,e%e! *%om the %emaining 6=1 -o%tion8
a triangular portion of te upper rigt and corner of said remaining +@)portion as -een similarl, cut off and severed,
and to %eep and attac tis triangular portion and te rectangular A@) portion to te rest of te document, the enti%e
#he#2 is -aste! on )oth si!es ith #e44o-hane8
the e!ges o* the se,e%e! -o%tions as e44 as o* the %emaining ma>o% -o%tion, he%e #"t )ea% t%a#es o* )"%ning
an! sea%ing=
the%e is a )ig )4ot ith in!e4i)4e in2 a)o"t the %ight mi!!4e -o%tion, 0ic seems to ave penetrated to te -ac% of
te cec% BE1i-it A-1C, hi#h )a#2 )ea%s a 4a%ge% smea% %ight "n!e% the )4ot, -ut not -lac% and sarp as te -lot
finall,, all tis tearing, -urning, -lotting and smearing and pasting of te cec% renders it difficult if not impossi-le to
read some of te 0ords and figures on te cec%.
In e1planation of te mutilation of te cec% Montinola told te court tat several monts after indorsing and delivering
te cec% to im, /amos demanded te return of te cec% to im, treatening Montinola 0it -odil, arm, even deat
-, imself or is guerrilla forces if e did not return said cec%, and tat in order to Fustif, te non-deliver, of te
document and to discourage /amos from getting it -ac%, e BMontinolaC ad to resort to te mutilation of te
As to 0at 0as reall, 0ritten at te -ac% of te cec% hi#h Montino4a #4aims to )e a *"44 in!o%sement o* the
#he#2, 0e agree 0it trial court tat the o%igina4 %iting o* Ramos on the )a#2 o* the #he#2 as to the e**e#t that
he as assigning on4+ P1/,/// o* the ,a4"e o* the !o#"ment an! that he as inst%"#ting the )an2 to !e-osit to
his #%e!it the )a4an#e.
&is 0riting 0as in some m,sterious 0a, o-literated, and in its place 0as placed te present indorsement
appearing tereon.
:aid present indorsement occupies a good portion of te -ac% of te cec%. As to o0 said present indorsement
came to -e 0ritten, te circumstances surrounding its preparation, te supposed participation of M. .. /amos in it
and te 0riting originall, appearing on te reverse side of te cec%, E1i-it A< &e a44ege!4+ in!o%sement: ?Pa+
to the o%!e% o* En%i7"e P. Montino4a the amo"nt o* P1/,/// on4+. &e -alance to -e deposited to te credit of
M. .. /amos>, signed -, M. .. /amos-according to te latter-does not no0 appear at te -ac% of te cec%. A
different indorsement, as aforesaid, no0 appears.
Ead Montinola reall, paid in full te sum of P*2(,((( in 6apanese Militar, #otes as consideration for te cec%G
&e follo0ing o-servations are in point<
'-viousl, !ortado ad no recollection as to o0 suc mar%s ever 0ere stamped at te -ac% of te cec%. Ee stated
tat /amos t,pe0rote tese 0ords outside of te premises of Montinola, tat is, a near-, ouse. Montinola, on te
oter and, testified tat /amos t,pe0rote te 0ords >Enrique P. Montinola 217 Isa-el :treet>, in is o0n ouse.
:pea%ing of te ru--er stamp used at te -ac% of te cec% and 0ic produced te 0ords >pa, to te order of>,
!ortado stated tat 0en e B!ortadoC, Atadero, Montinola and /amos returned in group to te ouse of Montinola,
te ru--er stamp 0as alread, in te ouse of Montinola, and it 0as on te ta-le of te upper floor of te ouse,
togeter 0it te stamp pad used to stamp te same. Montinola, on te oter and, testified tat /amos carried in is
poc%et te said ru--er stamp as 0ell as te in% pad, and stamped it in is ouse.
&e unusuall, -ig space occupied -, te indorsement on te -ac% of te cec% and te discrepancies in te versions
of Montinola and is 0itness !ortado Fust noted, create dou-ts as to 0eter or not reall, /amos made te
indorsement as it no0 appears at te -ac% of E1i-it A. 'ne ting difficult to understand is 0, /amos sould go into
te la-orious tas% of placing te ru--er stamp >Pa, to te order of> and after0ards move to te t,pe0riter and 0rite te
0ords >Enrique P. Montinola> >and >217 Isa-el :treet>, and finall, sign is name too far -elo0 te main indorsement.
BcC Anoter circumstances 0ic )ea%s hea,i4+ "-on the #4aim o* -4ainti** Montino4a that he a#7"i%e! the *"44
,a4"e o* the #he#2 an! -ai! the *"44 #onsi!e%ation the%e*o% is the -%esent #on!ition o* sai! #he#2. It is no0 so
unclean and discolored= it is pasted in cellopane, -ottled 0it in% on -ot sides torn tree parts, and 0it portions
tereof -urned-all done -, plaintiff, te alleged o0ner tereof.
&e acts done -, te ver, plaintiff on a document so important and valua-le to im, and 0ic according to
im involves his life savings, appro1imate intentional cancellation. &e onl, reason advanced -, plaintiff as to 0, tore
cec%, -urned te torn edges and -ottled out te registration at te -ac%, is found in te follo0ing< &at /amos came
to is ouse, armed 0it a revolver, treatened is life and demanded from im te return of te cec%= tat 0en e
informed /amos tat e did not ave it in te ouse, -ut in some deposit outside tereof and tat /amos promised to
return te ne1t da,= tat te same nigt e tore te cec% into tree parts, -urned te sides 0it a parrafin candle to
so0 traces of -urning= and tat upon te return of /amos te ne1t da, e so0ed te t0o parts of te cec%, te
triangle on te rigt upper part and te torn piece on te left part, and upon seeing te condition tereof /amos did not
-oter to get te cec% -ac%. Ee also said tat e placed te -lots in indeli-le in% to prevent /amos ? if e 0ould -e
forced to surrender te middle part of te cec% ? from seeing tat it 0as registered in te Heneral Auditing 'ffice.
< D, sould Montinola -e afraid of /amosG Montinola claims tat /amos 0ent tere a-out April, 1942, tat is, during
li-eration. If e -elieved e 0as standing -, is rigts, e could ave ver, 0ell sougt police protection or transferred
to some place 0ere /amos could not -oter im. And ten, reall, /amos did not ave an,ting more to do 0it tis
cec% for te reason tat Montinola ad o-tained in full te amount tereof, tere could not -e an, reason 0, /amos
sould ave treatened Montinola as stated -, te latter. 3nder te circumstances, te most logical conclusion is tat
/amos 0anted te cec% at all costs -ecause Montinola did not acquire te cec% to suc an e1tent tat it -orders on
intentional cancellation tereof Bsee :ections 119-1+) #egotia-le Instruments 5a0C tere is room to -elieve tat
Montinola did not ave so muc investments in tat cec% as to adopted an >0at do I careG> attitude.
And tere is te circumstance of te alleged loss of te cec%. At te time of te filing of te complaint te cec% 0as
allegedl, lost, so muc so tat a potostatic cop, tereof 0as merel, attaced to te complaint Bsee paragrap 7 of
te complaintC. Iet, during te trial te original cec% E1i-it A 0as produced in court.
$ut a comparison -et0een te potostatic cop, and te original cec% reveals discrepancies -et0een te t0o. &e
condition of te cec% as it 0as produced is suc tat it 0as partiall, -urned, partiall, -lotted, -adl, mutilated,
discolored and pasted 0it cellopane. Dat is 0orse is tat Montinola;s e1cuse as to o0 it 0as lost, tat it 0as
mi1ed up 0it ouseold effects is not plausi-le, considering te fact tat it involves is life savings, and tat -efore
te alleged loss, e too% e1treme pains and precautions to save te cec% from te possi-le ravages of te 0ar, ad it
potograped, registered said cec% 0it te Heneral Auditing 'ffice and e %ne0 tat /amos, since li-eration, 0as
ot after te possession of tat cec%.
BdC It seems tat Montinola 0as not so s"%e as to hat he ha! testi*ie! to in %e*e%en#e to the #onsi!e%ation he
-ai! *o% the #he#2. In #o"%t he testi*ie! that he -ai! P:3/,/// in #ash *%om 9"ne to @e#em)e% 5<::, an!
P://,/// o%th o* s"4-hatiaAo4e in 9an"a%+ 5<:3 to #om-4ete the a44ege! #onsi!e%ation o* P.3/,///. Bhen
Montino4a testi*ie! tis 0a, in court, o-viousl, e overloo%ed a letter e 0rote to te provincial treasurer of !aga,an,
'riental Misamis, dated Ma, 1, 1947, E1i-it ) te record. In tat letter E1i-it ), Montinola told Provincial &reasurer
Eli8alde of Misamis 'riental tat >/amos endorsed it Breferring to cec%C to me for goods in kind, medicine, etc.,
received by him for the use of the guerrillas." In said letter Exhibit 3, Montinola did not mention the cash that he paid
for the check.
"rom te foregoing te court concludes tat plaintiff Montinola came into te possession of te cec% in question a-out
te end of 4ecem-er 1944 -, reason of te fact tat M. .. /amos sold to im P)(,((( of te face value tereof in
consideration of te sum of P9(,((( 6apanese mone,, of 0ic onl, one-alf or P42,((( B in 6apanese mone,C 0as
actuall, paid -, said plaintiff to /amos. B/. on A., pp. )1-))= $rief of Appellee, pp. 14-+(.C
At te -eginning of tis decision, 0e stated tat as Provincial &reasurer of Misamis 'riental, 3-aldo 4. 5a,a 0as ex
officio agent of te Pilippine #ational $an% -ranc in tat province. 'n te face of te cec% BE1. AC 0e no0 find te 0ords in
parentesis >Agent, Pil. #ational $an%> "n!e% the signat"%e o* La+a, -"%-o%te!4+ shoing that he iss"e! the #he#2 as
agent o* the Phi4i--ine Nationa4 Ban2. It this is t%"e, then the )an2 is not on4+ !%aee )"t a4so a !%ae% o* the #he#2,
an! Montino4a e,i!ent4+ is t%+ing to ho4! the Phi4i--ine Nationa4 Ban2 4ia)4e in that #a-a#it+ o* !%ae%, )e#a"se as
!%aee a4one, inasm"#h as the )an2 has not +et a##e-te! o% #e%ti*ie! the #he#2, it ma+ +et a,oi! -a+ment.
5a,a, testif,ing in court, stated tat e issued te cec% onl, as Provincial &reasurer, and tat te 0ords in parentesis >Agent,
Pil. #ational $an%> no0 appearing under is signature did not appear on te cec% 0en e issued te same. In tis e 0as
corro-orated -, te pa,ee M. .. /amos 0o equall, assured te court tat 0en e received te cec% and ten delivered it to
Montinola, tose 0ords did not appear under te signature of 3-aldo 4. 5a,a. De again quote 0it approval te pertinent
portion of te trial court;s decision<
&e question is reduced to 0eter or not te 0ords, >Agent, Pil. #ational $an%> 0ere added after 5a,a ad issued
te cec%. In a straigtfor0ard manner and 0itout vacillation 5a,a positivel, testified tat te cec% E1i-it A 0as
issued -, im in is capacit, as Provincial &reasurer of Misamis 'riental and tat te 0ords >Agent, Pil. #ational
$an%> 0ic no0 appear on te cec% E1i-it A 0ere not t,pe0ritten -elo0 is signature 0en e signed te said
cec% and delivered te same to /amos. 5a,a assured te court tat tere could not -e an, mista%e as to tis. "or,
according to 5a,a, 0en e issued cec% in is capacit, as agent of te Misamis 'riental agenc, of te Pilippine
#ational $an% te said cec% must -e countersigned -, te casier of te said agenc, ? not -, te provincial auditor.
Ee also testified tat te said cec% 0as issued -, im in is capacit, as provincial treasurer of Misamis 'riental and
tat is 0, te same 0as countersigned -, Provincial Auditor "lores. &e Provincial Auditor at tat time ad no
connection in an, capacit, 0it te Misamis 'riental agenc, of te Pilippine #ational $an%. Plaintiff Montinola on te
oter and testified tat 0en e received te cec% E1i-it A it alread, -ore te 0ords >Agent, Pil. #ational $an%>
-elo0 te signature of 5a,a and te printed 0ords >Provincial &reasurer>.
After considering te testimon, of te one and te oter, te court finds tat te preponderance of te evidence
supports 5a,a;s testimon,. In te first place, is testimon, 0as corro-orated -, te pa,ee M. .. /amos. $ut 0at
renders more pro-a-le te testimon, of 5a,a and /amos is te fact tat te mone, for 0ic te cec% 0as issued
0as e1pressl, for te use of te 3:A""E of 0ic /amos 0as ten dis-ursing officer, so muc so tat upon te
deliver, of te P4((,((( in emergenc, notes and te P1((,((( cec% to /amos, 5a,a credited is depositor,
accounts as provincial treasurer 0it te corresponding credit entr,. In te normal course of events te cec% could not
ave -een issued -, te -an%, and tis is -orne -, te fact tat te signature of 5a,a 0as countersigned -, te
provincial auditor, not te -an% casier. And ten, too tere is te circumstance tat tis cec% 0as issued -, te
provincial treasurer of 5anao to /amos 0o requisitioned te said funds in is capacit, as dis-ursing officer of te
3:A""E. &e cec%, E1i-it A is not 0at 0e ma, term in -usiness parlance, >certified cec%> or >casier;s cec%.>
$esides, at te time te cec% 0as issued, 5a,a alread, %ne0 tat !e-u and Manila 0ere alread, occupied. Ee could
not ave terefore issued te cec%-as a -an% emplo,ee-pa,a-le at te central office of te Pilippine #ational $an%.
3pon the *o%egoing #i%#"mstan#es the #o"%t #on#4"!es that the o%!s ?Agent, Phi4. Nationa4 Ban2C )e4o the
signat"%e o* U)a4!o @. La+a an! the -%inte! o%!s ?P%o,in#ia4 T%eas"%e%? e%e a!!e! in the #he#2 a*te% the
same as iss"e! )+ the P%o,in#ia4 T%eas"%e% o* Misamis O%ienta4.
"rom all te foregoing, 0e ma, safel, conclude as 0e do tat te 0ords >Agent, Pil. #ational $an%> no0 appearing on te face
of te cec% BE1. AC 0ere added or placed in te instrument after it 0as issued -, Provincial &reasurer 5a,a to M. .. /amos.
&ere is no reason %no0n to us 0, Provincial &reasurer 5a,a sould issue te cec% BE1. AC as agent of te Pilippine
#ational $an%. :aid cec% for P1((,((( 0as issued to complete te pa,ment of te oter cec% for P2((,((( issued -, te
Provincial &reasurer of 5anao to /amos, as part of te advance funds for te 3:A""E in !aga,an de Misamis. &e -alance of
P4((,((( in cas 0as paid to /amos -, 5a,a from te funds, not of te -an% -ut of te Provincial &reasur,. :aid 3:A""E 0ere
-eing financed not -, te $an% -ut -, te Hovernment and, presuma-l,, one of te reasons for te issuance of te emergenc,
notes in Mindanao 0as for tis purpose. As alread, stated, according to Provincial &reasurer 5a,a, upon receiving a relativel,
considera-le amount of tese emergenc, notes for is office, e deposited P2((,((( of said currenc, in te Pilippine #ational
$an% -ranc in !e-u, and tat in issuing te cec% BE1. AC, e e1pected to ave it cased at said !e-u -an% -ranc against
is deposit of P2((,(((.
&e logical conclusion, terefore, is tat te cec% 0as issued -, 5a,a onl, as Provincial &reasurer and as an official of te
Hovernment 0ic 0as under o-ligation to provide te 3:A""E 0it advance funds, and not -, te Pilippine #ational $an%
0ic as no suc o-ligation. &e ver, Anne1 !, made part of plaintiff;s complaint, and later i ntroduced in evidence for im as
E1i-it E states tat 5a,a issued te cec% >in is capacit, as Provincial &reasurer of Misamis 'riental>, o-viousl,, not as agent
of te $an%.
#o0, did M. .. /amos add or place tose 0ords -elo0 te signature of 5a,a -efore transferring te cec% to MontinolaG 5et us
-ear in mind tat /amos -efore is induction into te 3:A""E ad -een 0or%ing as assistant of &reasurer 5a,a as ex-
officio agent of te Misamis 'riental -ranc of te Pilippine #ational $an%. #aturall,, /amos must ave %no0n te procedure
follo0ed tere as to te issuance of cec%s, namel,, tat 0en a cec% is issued -, te Provincial &reasurer as suc, it is
countersigned -, te Provincial Auditor as 0as done on te cec% BE1i-it AC, -ut tat if te Provincial &reasurer issues a cec%
as agent of te Pilippine #ational $an%, te cec% is countersigned not -, te Provincial Auditor 0o as noting to do 0it te
-an%, -ut -, te -an% casier, 0ic 0as not done in tis case. It is not li%el,, terefore, tat /amos ad made te insertion of
te 0ords >Agent, Pil. #ational $an%> after e received te cec%, -ecause e sould ave reali8ed tat follo0ing te practice
alread, descri-ed, te cec% aving -een issued -, 5a,a as Provincial &reasurer, and not as agent of te -an%, and since te
cec% -ears te countersignature not of te $an% casier of te Provincial Auditor, te addition of te 0ords >Agent, Pil.
#ational $an%> could not cange te status and responsi-ilit, of te -an%. It is the%e*o%e mo%e 4ogi#a4 to )e4ie,e an! to *in!
that the a!!ition o* those o%!s as ma!e a*te% the #he#2 ha! )een t%ans*e%%e! )+ Ramos to Montino4a. Moreover, tere
are oter facts and circumstances involved in te case 0ic support tis vie0. /eferring to te mimeograped record on
appeal filed -, te plaintiff-appellant, 0e find tat in t%ans#%i)ing an! #o-+ing the #he#2, -a%ti#"4a%4+ the *a#e o* it 'E;hi)it
A( in the #om-4aint, the o%!s ?Agent, Phi4. Nationa4 Ban2? no a--ea%ing on the *a#e o* the #he#2 "n!e% the signat"%e
o* the P%o,in#ia4 T%eas"%e%, is missing. Un4ess the -4ainti** in ma2ing this #o-+ o% t%ans#%i-tion in the #om-4aint
#ommitte! a se%io"s omission hi#h is !e#isi,e as *a% as the )an2 is #on#e%ne!, the in*e%en#e is, that at the time the
#om-4aint as *i4e!, sai! -h%ase !i! not a--ea% on the *a#e o* the #he#2. That -%o)a)4+ as the %eason h+ the )an2 in
its motion to dismiss dated :eptem-er +, 1947, contended tat if te cec% in question ad -een issued -, te provincial
treasurer in is capacit, as agent of te Pilippine #ational $an%, said treasurer 0ould ave placed -elo0 is signature te
0ords >Agent of te Pilippine #ational $an%>. &e plaintiff -ecause of te alleged loss of te cec%, allegedl, attaced to te
complaint a potostatic cop, of said cec% and mar%ed it as Anne1 A. $ut in transcri-ing and cop,ing said Anne1 A in is
complaint, te prase >Agent, Pil. #ational $an%> does not appear under te signature of te provincial treasurer. De tried to
verif, tis discrepanc, -, going over te original records of te !ourt of "irst Instance so as to compare te cop, of Anne1 A in
te complaint, 0it te original Anne1 A, te potostatic cop,, -ut said original Anne1 A appears to -e missing from te record.
Eo0 it disappeared is not e1plained. 'f course, no0 0e ave in te list of e1i-it a potostatic cop, mar%ed Anne1 A and E1i-it
$, -ut according to te manifestation of counsel for te plaintiff dated 'cto-er 12, 194*, said potostatic cop, no0 mar%ed
Anne1 A and E1i-it $ 0as su-mitted on 'cto-er 12, 194*, in compliance 0it te ver-al order of te trial court. It is terefore
evident tat te Anne1 A no0 availa-le is not te same original Anne1 A attaced to te complaint in 1947.
&ere is one oter circumstance, important and 0ort noting. If Anne1 A also mar%ed E1i-it $ is te potostatic cop, of te
original cec% #o. 1)*+ particularl, te face tereof BE1i-it AC, ten said potostatic cop, sould -e a faitful and accurate
reproduction of te cec%, particularl, of te prase >Agent, Pil. #ational $an%> no0 appearing under te signature of te
Provincial &reasurer on te face of te original cec% BE1i-it AC. $ut a minute e1amination of and comparison -et0een Anne1
A, te potostatic cop, also mar%ed E1i-it $ and te face of te cec%, E1i-it A, especiall, 0it te aid of a andlens, so0
nota-le differences and discrepancies. "or instance, on E1i-it A, te letter A of te 0ord >Agent> is to0ard te rigt of te tail of
te -eginning letter of te signature of 3-aldo 4. 5a,a= tis same letter >A> o0ever in E1i-it $ is directl, under said tail.
&e letter >#> of te 0ord >#ational> on E1i-it A is underneat te space -et0een >Provincial> and >&reasurer>= -ut te same
letter >#> is directl, under te letter >I> of te 0ord >Provincial> in E1i-it $.
&e first letter >a> of te 0ord >#ational> is under >&> of te 0ord >&reasurer> in E1i-it A= -ut te same letter >a> in E1i-it >$> is
Fust -elo0 te space -et0een te 0ords >Provincial> and >&reasurer>.
&e letter >%> of te 0ord >$an%> in E1i-it A is after te green perpendicular -order line near te lo0er rigt and corner of te
edge of te cec% BE1. AC= tis same letter >%> o0ever, on E1i-it $ is on te ver, -order line itself or even -efore said -order
&e closing parentesis >C> on E1i-it A is a little far from te perpendicular green -order line and appears to -e dou-le instead
of one single line= tis same >C> on E1i-it $ appears in a single line and is relativel, nearer to te -order line.
&ere are oter nota-le discrepancies -et0een te cec% Anne1 A and te potostatic cop,, E1i-it $, as regards te relative
position of te prase >Agent, Pil. #ational $an%>, 0it te title Provincial &reasurer, giving ground to te dou-t tat E1i-it $ is
a potostatic cop, of te cec% BE1i-it AC.
De ten ave te follo0ing facts. E;hi)it A as iss"e! )+ La+a in his #a-a#it+ as P%o,in#ia4 T%eas"%e% o* Misamis
O%ienta4 as !%ae% on the Phi4i--ine Nationa4 Ban2 as !%aee. Ramos so4! P1/,/// o* the #he#2 to En%i7"e P.
Montino4a *o% P</,/// 9a-anese mi4ita%+ notes, o* hi#h on4+ P:3,/// as -ai! )+ Montino4a. The %iting ma!e )+
Ramos at the )a#2 o* the #he#2 as an inst%"#tion to the )an2 to -a+ P1/,/// to Montino4a an! to !e-osit the )a4an#e
to his 'Ramos( #%e!it. This %iting as o)4ite%ate! an! in its -4a#e e no ha,e the s"--ose! in!o%sement a--ea%ing
on the )a#2 o* the #he#2 BE1. A-1C.
At te time of te transfer of tis cec% BE1. AC to Montinola a-out te last da,s of 4ecem-er, 1944, or te first da,s of 6anuar,,
1942, te cec% 0ic, -eing a negotia-le instrument, 0as pa,a-le on demand, 0as long overdue -, a-out + J ,ears. It ma,
terefore -e considered, even ten, a stale cec%. 'f course, Montinola claims tat a-out 6une, 1944 0en /amos supposedl,
approaced im for te purpose of negotiating te cec%, e BMontinolaC consulted President !armona of te Pilippine
#ational $an% 0o assured im tat te cec% 0as good and negotia-le. Eo0ever, President !armona on te 0itness stand
flatl, denied Montinola;s claim and assured te court tat te first time tat e sa0 Montinola 0as after te Pilippine #ational
$an%, of 0ic e 0as President, reope ne!, a*te% 4i)e%ation, a%o"n! A"g"st o% $e-tem)e%, 5<:3, an! that hen shon the
#he#2 he to4! Montino4a that it as sta4e. M. V. Ramos a4so to4! the #o"%t that it is not t%"e that he e,e% ent ith
Montino4a to see P%esi!ent 0a%mona a-out te cec% in 1944.
!A# M'#&I#'5A !5AIM I# &EE !EE!KG #'.
The inse%tion o* the o%!s ?Agent, Phi4. Nationa4 Ban2? hi#h #on,e%ts the )an2 *%om a me%e !%aee to a !%ae% an!
the%e*o%e #hanges its 4ia)i4it+, #onstit"tes a mate%ia4 a4te%ation of te instrument 0itout te consent of te parties lia-le
tereon, and so discarges te instrument. B:ection 1+4 of te #egotia-le Instruments 5a0C.
&e cec% 0as not legall, negotiated 0itin te meaning of te #egotia-le Instruments 5a0. :ection )+ of te same la0
provides tat >te indorsement must -e an indorsement of te entire instrument. An indorsement 0ic purports to transfer to
te indorsee a part onl, of te amount pa,a-le, . . . Bas in tis caseC does not operate as a negotiation of te instrument.>
Montinola ma, terefore not -e regarded as an indorsee. At most e ma, -e regarded as a mere assignee of te P)(,((( sold
to im -, /amos, in 0ic case, as suc assignee, e is su-Fect to all defenses availa-le to te dra0er Provincial &reasurer of
Misamis 'riental and against /amos.
#eiter can Montinola -e considered as a older in due course -ecause section 2+ of said la0 defines a older in due course as
a older 0o as ta%en te instrument under certain conditions, one of 0ic is tat e -ecame te older -efore it 0as
overdue. Den Montinola received te cec%, it 0as long overdue. And, Montinola is not even a older -ecause section 191 of
te same la0 defines older as te pa,ee or indorsee of a -ill or note and Montinola is not a pa,ee. #eiter is e an indorsee
for as alread, stated, at most e can -e considered onl, as assignee. #eiter could it -e said tat e too% it in good fait. As
alread, stated, e as not paid te full amount of P9(,((( for 0ic /amos sold im P)(,((( of te value of te cec%.
In te second place, Montinola speculated on te cec% and too% a cance on its -eing paid after te 0ar. Montinola must ave
%no0n tat at te time te cec% 0as issued in Ma,, 194+, te mone, circulating in Mindanao and te .isa,as 0as onl, te
emergenc, notes and tat te cec% 0as intended to -e pa,a-le in tat currenc,. Also, e sould ave %no0n tat a cec% for
suc a large amount of P1((,((( #o"4! not ha,e )een iss"e! to Ramos in his -%i,ate #a-a#it+ )"t %athe% in his #a-a#it+
as !is)"%sing o**i#e% o* the U$A&&E, an! that at the time that Ramos so4! a -a%t o* the #he#2 to him, Ramos as no
4onge% #onne#te! ith the U$A&&E -ut alread, a civilian 0o needed te mone, onl, for imself and is famil,.
As alread, stated, as a mere assignee Montinola is su-Fect to all te defenses availa-le against assignor /amos. And, /amos
ad e retained te cec% ma, not no0 collect its value -ecause it ad -een issued to im as dis-ursing officer . As o-served -,
te trial court, te cec% 0as issued to M. .. /amos not as a person -ut M. .. /amos as te dis-ursing officer of te 3:A""E.
&erefore, e ad no rigt to indorse it personall, to plaintiff. It 0as negotiated in -reac of trust, ence e transferred noting to
te plaintiff.
In vie0 of all te foregoing, finding no reversi-le error in te decision appealed from, te same is ere-, affirmed 0it costs.
In te pra,er for relief contained at te end of te -rief for te Pilippine #ational $an% dated :eptem-er +7, 1949, 0e find tis
It is also respectfull, pra,ed tat tis Eonora-le !ourt refer te cec%, E1i-it A, to te !it, "iscal;s 'ffice for
appropriate criminal action against te plaintiff-appellant if te facts so 0arrant.
:u-sequentl,, in a petition signed -, plaintiff-appellant Enrique P. Montinola dated "e-ruar, +7, 192(, e as%ed tis !ourt to
allo0 im to 0itdra0 te original cec% BE1. AC for im to %eep, e1pressing is 0illingness to su-mit it to te court 0enever
needed for e1amination and verification. &e -an% on Marc +, 192( opposed te said petition on te ground tat inasmuc as
te appellant;s cause of action in tis case is -ased on te said cec%, it is a-solutel, necessar, for te court to e1amine te
original in order to see te actual alterations supposedl, made tereon, and tat sould tis !ourt grant te pra,er contained in
te -an%;s -rief tat te cec% -e later referred to te cit, fiscal for appropriate action, said cec% ma, no longer -e availa-le if
te appellant is allo0ed to 0itdra0 said document. In vie0 of said opposition tis !ourt resolution of Marc 9, 192(, denied
said petition for 0itdra0al.
Acting upon te petition contained in te -an%;s -rief alread, mentioned, once te decision -ecomes final, let te !ler% of !ourt
transmit to te cit, fiscal te cec% BE1. AC togeter 0it all pertinent papers and documents in tis case, for an, action e ma,
deem proper in te premises.