Metropolitan Bank vs.

Court of Appeals

FACTS:

In Golden Savings and Loan Association, Eduardo Gomez opened an account and
deposited over a period of two months 38 treasury warrants with a total value of
P1,755,228.37. The warrants were subsequently indorsed by Gloria Castillo – the
cashier of Golden Savings and deposited to its savings account in the Metrobank
branch in Calapan, Mindoro. It was sent for clearing to the principal office of Metrobank,
which forwarded them to the Bureau of Treasury for special clearing. Before they were
cleared, petitioner decided to allow Golden Savings to withdraw from the proceeds of
the warrants. Gomez was allowed by Golden Savings to make withdrawals from his own
account. Golden Savings was informed by Metrobank that 32 of the warrants had been
dishonored by the Bureau of Treasury and demanded the refund by Golden Savings of
the amount it had previously withdrawn, to make up the deficit in its account.

Golden Savings assumed that they were “genuine and in all respects what they purport
to be,” because Metrobank contends it by indorsing the warrants in general, in
accordance with section 66 of the Negotiable Instruments Law.

ISSUE:
Whether petitioner can hold Golden Savings liable as an indorser of the treasury warrants
based on the predication that the treasury warrants involved in this case are negotiable
instruments.

RULING:
Clearly stamped on the face of the treasury warrants is the word "non-negotiable." It is
also indicated that they are payable from a particular fund, to wit, Fund 501. The
indication of Fund 501 as the source of the payment to be made on the treasury warrants
makes the order or promise to pay "not unconditional" and the warrants themselves non-
negotiable. Petitioner cannot hold Golden Savings liable as an indorser under Section
66 of the NIL for the simple reason that this law is not applicable to the non-negotiable
treasury warrants.
Land Bank of the Philippines v. Perez
Erwin Fuentes
G.R. No. 166884

FACTS
Petitioner Land Bank of the Philippines (LBP) is a government financial institution and the official
depository of the Philippines. Respondents were officers of Asian Construction and Development
Corporation (ACDC), a corporation engaged in the construction business. On several occasions,
respondents executed in favor of Land Bank of the Philippines (LBP) trust receipts to secure the
purchase of construction materials that they will need in their construction projects. When the trust
receipts matured, ACDC failed to return to LBP the proceeds of the construction projects or the
construction materials subject of the trust receipts. After several demands went unheeded, LBP
filed a complaint for Estafa or violation of Art. 315, par. 1(b) of the RPC, in relation to PD 115,
against the respondent officers of ACDC.

ISSUE
WON the disputed transactions is a trust receipt or a loan?

HELD
The fact that LBP had knowingly authorized the delivery of construction materials to a
construction site of two government projects, as well as unspecified construction sites,
repudiates the idea that LBP intended to be the owner of those construction materials. As a
government financial institution, LBP should have been aware that the materials were to be
used for the construction of an immovable property, as well as a property of the public
domain. As an immovable property, the ownership of whatever was constructed with those
materials would presumably belong to the owner of the land, under Article 445 of the Civil
Code.
In contrast with the present situation, it is fundamental in a trust receipt transaction that the person
who advanced payment for the merchandise becomes the absolute owner of said merchandise and
continues as owner until he or she is paid in full, or if the goods had already been sold, the proceeds
should be turned over to him or to her.
WHEREFORE, we DENY the petition and AFFIRM the January 20, 2005 decision of the
Court of Appeals in CA-G.R. SP No. 76588. No costs.