BIT IC COLLEGE OF LAW

COURSE SYLLABUS

Course Title: Negotiable Instruments

Law Professor: Atty. Raia Angelie A. Tumanda
No. of Units: 3
Semester/SY: 2nd Semester/S.Y. 2019-2020
Pre-requisites: None

COURSE DESCRIPTION AND OBJECTIVES

This three-unit course is a comprehensive study of the laws, jurisprudence, and
legal principles governing negotiable instruments as well as other commercial
documents contained in the The Negotiable Instruments Law (Act No. 2031) and other
allied laws such as the New Central Bank Act (R.A. No. 7653), Code of Commerce, the
New Civil Code, the Warehouse Receipts Law (Act No. 2137), General Bonded
Warehouse Act (Act No. 3893), and the Trust Receipts Law (P.D. No. 115). Updates
on recent and relevant laws are also discussed as well as latest cases decided by the
Supreme Court on the matter.

II.LEARNING OUTCOMES
At the end of the course, the students will have learned the different provisions
relating to negotiable instruments. They are also expected to correctly interpret legal
provisions relating to the same and apply them in answering Bar examination
questions and legal problems.

III.TEACHING METHODOLOGY
The course will employ recitation as the primary method of instruction to develop
the students' power of analysis, reasoning, and facility of expression. There will also
be reporting in class

IV. COURSE REQUIREMENTS AND GRADING SYSTEM

COURSE REQUIREMENTS GRADE BREAKDOWN

Attendance,reporting, quizzes and writing exercise 15%
Recitation 15%
Exam 70%

V. COURSE POLICIES
The following policies will be observed during class:
- No coaching.
- No using gadgets (including laptops, tablets, and mobile phones), or using the
internet.
- Cellphones should be on silent mode.
- Observe dress code.
- Stand when reciting and asking questions.
-Observe order in class.
-A student who violates any of the above rules gets 60% in recitation for the day.
- Three "lates" will be counted as one cut or absence. A student is late when he or
she arrives after the roll call and within 15 minutes from the bell at the start of the
first class. A student who arrives beyond the 15-minute cut off is considered absent.
For other policies, please see the Rules and Regulations on attendance, dress code,
discipline, and plagiarism of the JMC Student Handbook.

VI. COURSE OUTLINE

WEEK 1
Introduction to the Course

Week 2
General Principles
1. History, Governing Laws (Act. 2031, Code of Commerce, New Civil Code)
2. Applicability of the Negotiable Instruments Law
 Kauffiman vs. PNB, 42 Phil 182, September 29, 1921
 GSIS us. CA, 170 SCRA 533, February 23, 1989
3. Concept of Negotiable Instruments
a. Negotiable Instruments defined
b. Functions of Negotiable Instruments
Substitute for Money But Not Legal Tender
 Papa us. Valencia G.R. No. 105188, Jan. 23, 1998
 Cebu International Vs. Ca G.R. No. 123031, October 12, 1999
 Rueda vs. Sandigan Bayan G.R. No. 129064 November 29, 2000
 Barreto us. Ca G.R. No. 132362 June 29, 2001
 Bpi us. Spouses Reynaldo And Victoria Royeca G.R. No. 176664, July 21,2008
 Mitra vs. People And Tarcel G.R. No. 191404 Juhy 5, 2010
 Halley us. Printwell, Inc. G.R. No. 157549, May 30, 2011
Medium of Commercial Transactions
 People vs. Tongko G.R. No. 123567, June 5, 1998
Medium of Credit Transaction/Evidence of Indebtedness
Debt of Drawer:
 Pacheco us. CA G.R. No. 126670 December 2, 1999
 Go Us. Bacaron G.R. No. 159048 October 11, 2005
 Spouses Tan us. Villapaz G.R. No. 160892 November 22, 2005
 Chua Gaw us. Chua G.R. No. 160855 April 16, 2008
c. What is Legal Tender, [Sec. 52, 60, New Central Bank Act; BSP Circular no. 537,
(2006)]
 Tibajia us. CA, 223 SCRA 163
 PAL Us. CA, GR. 49188, Jan. 30, 1990

4. Characteristics of Negotiable Instruments

 Natividad Germpesaw vs. CA, G.R. No. 92244, February 9, 1993
5. Incidents in the Life of Negotiable Instruments
6. Kinds of Negotiable Instruments
a. Negotiable Promissory Notes (Sec, 184, NTL)
i. parties to a negotiable promissory note
ii. kinds of negotiable promissory note
 b. Bills of Exchange (Sec. 126, 185, NIL)
i. parties to a bill of exchange
ii. kinds of bill exchange
7. When Bill Treated as Notes (Sec. 17e, 130, NIL)
8. Bills and Notes Distinguished
9. Negotiable Instruments Compared with other Papers
 Sesbreno vs. CA, G.R. No. 89252, May 24, 1993
10. Some Non-Negotiable Instruments
a. Documents of Title
b. Letters of Credit
c. Certificates of Stock
d. Postal Money Order
 Philippine Education Co. us. Soriano, G.R. No. L-22405, Jure 30, 1971
e. Treasury Warrants
 Metropolitan Bank us. CA, 194 SCRA 169 (1991)

II.Form and Interpretation of Negotiable Instruments

1. How Negotiability is Determined
 Caltex (Philippines) us. CA, 212 SCRA 448, Aug. 10, 1992
2. Effect of Estoppel
 Banco de Oro us. Equitable Banking Corp.; 157 SCRA 188 (1988)
 Phil. Bank of Commerce us. Aruego, 102 SCRA 530, Jan. 31, 1981
3. Requisites of Negotiability (Sec. 1, NIL)
a. must be in writing and signed by the maker or drawer (Sec. 191, NIL)
b. must contain an unconditional promise or order to pay a sum certain in mone
i. promise or order to pay (Sec. 1, NIL)
ii. promise or order must be unconditional
1. resolutory and suspensive condition (Art. 1173, 1181, NCC)
2. period
3. when is promise unconditional (Sec. 3, 29, NIL)
4. sum certain in money (Sec. 2, 5d, 6e, NIL; CB Circular 799, July 1, 2013; Art.
2209, Civil Code; acceleration, insecurity, extension clauses)
 Metropolitan Bank us. CA, 194 SCRA 169, Feb. 18, 1991
 New Sampaguita us. PNB, G.R. No. 148753, July 30, 2004
 BPI us. Spouses Norman & Angelita Yu, G.R. No. 184122 January 20,
C. must be payable on demand or at a fixed or determinable future time (Sec. 7)
 International Corporate Bank us. Gueco (351 SCRA 516)
 Pacheco us. CA 319 SCRA 595 (1999)
d. must be payable to order or bearer (Sec. 8, 9, 184, NIL)
Fictitious Payee Rule
 Ang Tek Lian us. CA, 87 Phil 383, Sept. 25, 1950
 PNB vs. Spouses Rodriguez, G.R. No. 170325, Sept. 26, 2008
e. drawee must be named or indicated with reasonable certainty
Sec. 1e, 130, NIL; Sec. 128, NIL
4. Omissions and Provisions that Do Not Affect Negotiability (Sec. 5, NIL)
 PNB vs. Manila Oil Refining &By-Products Co. 43 Phil. 444 (1922)
5. Interpretation of Instruments (Sec. 10, NIL)
 Traders us. Ca G.R. No. 93397 March 3, 1997
  Firestone vs. Ca G.R. No. 113236 March 5, 2001
 Astro us. Phil Export G.R. No. 136729 September 23, 2003
 Garcia us. Llamas G.R. No. 154127 December 8, 2003
 Transfield us. Luzon Hydro G.R. No. 146717 NOVEMBER 22, 2004

Week 3

Ante-dated & Post-Dated Instruments (Sec. 12, NIL)

When Date May be Inserted (Sec. 13, NIL)
 San Miguel Corp. vs. Puzon, G.R. No. 167567, Sept. 22, 2010

Completion and Delivery

1. Insertion of Date
2. Completion of Blanks (Sec. 14, NIL)
Blondeau Doctrine
3. Incomplete and Undelivered Instruments (Sec. 15, NIL)
 Lim vs. CA, G.R. No. 107898, December 19, 1995
 Dela Victoria vs. Burgos, 245 SCRA 374
 Bank of America us. Philippine Racing Chub. G.R. No. 150228, July 30, 2009
 Ching us. Nicdao, G.R. No. 141181, April 27, 2007
4. Complete but Undelivered Instruments (Sec. 16, NIL)

Week 4

Forgery&Material Alteration
1. Signature (Sec. 19-21, NIL)
2. Effect of Forged Signature (Sec. 23, NIL)
 Westmont Bank vs. Ong, G.R. No. 132250, Jan. 20, 1998
 Ilusorio vs. CA, G.R. No. 139130, Nov. 27, 2002
 BPI vs. Casa de Montessori, G.R. No. 149454, May 28, 2004
 Associated Bank vs. CA, G.R. No. 107382, Jan. 31, 1995
 Allied Bank vs. Lim Sio Wan, G.R. No. 133179, March 27, 2008
 Equitable PCI Bank vs. Ong G.R. No. 156207
 Manila Lighter vs. CA, 182 SCRA 251
 Gempesaw vs. CA G.R. No. 92244, Feb. 9, 1993
 Jai Alai Corp vs. BPI 66 SCRA 29
 Republic Bank vs. Ebrada, 65 SCRA 680
 Metrobank vs. CA G.R. No. 88866, Feb. 18, 1991

Material Alteration (Sec. 125, NIL)

1. Concept
2. Effect of Material Alteration
 Metrobank us. First National City Bank, 118 SCRA 537

Consideration (Sec. 24, NIL)

Effect of Want of Consideration

  Siain Enterprises, Inc. us. Cupertino Realty Corp., G.R. No. 170782, June 22,
2009
 Martinez us. Rodriguez, G.R. No. 1913, September 29, 1905

Accommodation Party

Liability of Accommodation Party (Sec. 29, NIL)

Kinds of Accommodation Party
Rights of Accommodation Party

 Lim us. Saban, G.R. No. 163720, December 16, 2004

 Ang Tiong us. Ting, 22 SCRA 713

Week5
Transfer and Negotiation
1. Issuance/Delivery of Negotiable Instruments (Sec. 15, 16, 191, NIL)
 Dela Victoria vs. Burgos, 245 SCRA 374, June 27, 1995
2. Negotiation Defined (Sec. 30, NIL)
3. Assignment and Negotiation Distinguished; Liability of Assignor (Art. 348, Code of
Commerce)
 Casabuena us. CA, 286 SCRA 594
4 How are Negotiable Instruments and Non-Negotiable Instruments Transferred
Sesbreno us. CA, 222 SCRA 466, May 24, 1993
 Consolidated Plywood us. IFC Leasing, 149 SCRA 448, April 30, 1987
 Traders Royal Bank us. CA, 269 SCRA 16, March 3, 1997
5. How Negotiation Takes Place (Sec. 16, 30, 40, NIL
 Manuel Lim us. CA, 251 SCRA 409, Dec. 19, 1995
 Dela Victoria us. Burgos, 245 SCRA 374, June 27, 1995
 Development Bank of Rizal us. Sima Wei, 217 SCRA 743. March 9, 1993
6. Incomplete Negotiation of Order Instrument (Sec. 49. NIL)
7. Where Indorsement Should be Placed (Sec. 31, NIL)
8. When Person Deemed Indorser (Sec. 63, NIL)
9. Other Rules on Indorsement (Sec. 31, 32, 40-48, 49. NIL)
 Enrique Montinola us. PNB, 68 Phil 178, Feb. 26, 1951
 Ang Tek Lian us. CA, GR L-2516, Sept. 25, 1950
10. Kinds of Indorsement (Sec. 33, NIL)
a. Blank and Special Indorsements (Sec. 34, 35, NIL.)
i. conversion of blank to special indorsement (Sec. 35, NIL)
b. Qualified and General Indorsement (Sec. 38, 65, NIL)
 Metropol (Bacolod) Financing us. Sambok Motors, 120 SCRA 864, Feb. 28, 1983
c. Conditional Indorsement (Sec. 39, NIL)
d. Restrictive Indorsement (Sec. 36, 37, 47, NIL)
 Gempesaw vs. CA, 218 SCRA 628, Feb. 9, 1993
e. Absolute Indorsement
f. Joint Indorsement (Sec. 41, NIL)
g. Irregular Indorsement (Sec. 64, NIL)
11. When Indorsement Necessary (Sec. 30, 184, NIL)
12. Indorsement of Entire Instrument (Sec. 32, NIL)
13. Indorsement of Bearer Instrument (Sec. 40, NIL)
14. Indorsement When Payable to Two or More Persons (Sec. 41, NIL) Sec. 8d, e
15. Indorsememnt in Representative Capacity (Sec. 44, NIL)
16. Presumption on Time, Place of Indorsement (Sec. 45, 46, NIL)
17. Continuation of Negotiable Character (Sec. 47, NIL)
18. Negotiation by Prior Party (Sec. 50, NIL)
19. Striking Out of Indorsement (Sec. 48, NIL)
20. Effect of Transfer Without Indorsement (Sec. 49, NIL)
21. Consideration for Issuance and Subsequent Transfer (Sec. 24, NIL)

Week 6
22. What Constitutes Value (Sec. 25, NIL)
 Bibiano Banas us. CA, 325 SCRA 259, Feb. 10, 2000
23. Effect if Value Previously Given (Sec. 26, NIL)
24. Holder for Value (Sec. 26, 27, NIL)
25. Effect of Want of Consideration (Sec. 28, NIL)
26. Indorsement to Cashier, Sec. 42, NIL
27. When name of payee or indorser wrongly designated, Sec. 43, NIL

Week 7
IV. Holders
1. What is a holder (Sec. 191, NIL)
a. Classes of Holder (Sec. 26, 27, 52, NIL)
b. Rights of Holders (Sec. 51, 88, 119, NIL)
Chan Wan us. Tan Kim, 109 Phil 706, Sept. 3o, 1960
 Atrium Management us. CA, 144 SCAD 390, Feb. 28, 2001
 Marcelo Mesirna us. CA, 145 SCRA 497, Nov. 13, 1986
2. Holders in Due Course (Sec. 52, 53, 54, 55, 56, 88, NIL)
a. instrument complete and regular
b. taken before overdue (Sec. 4, 7,53, 83, 85, NIL)
c. previously dishonored (Sec. 83, 149, NIL)
d. notice of infirmity or defect (Sec. 54, 55, 56,NIL)
e. good faith
 Equitable Banking vs. Special Steel, GR 175350, June 13, 2012
 De Ocampo us. Gatchalian, 3 SCRA 596, Nov. 30, 1961
 Yang vs. CA, No. 138074, Aug. 15, 2003
 Bataan Cigar vs. CA, 230 SCRA 643 (1994)
 Stelco Marketing us. CA, 210 SCRA 51, June 17, 1992
 Go us. Metropolitan Bank, GRNO. 168842, Aug. 11, 2010
f. holder for value (Sec. 24-27, NIL)
3. Presumption of Due Course Holding (Sec. 59, NIL)
4. Rights of Holders in Due Course (Sec. 14, 16, 57, NIL); When Subject to Original
Defenses
(Sec. 58, NIL)
  Salas us. CA, 181 SCRA 296
 State Investment House vs. CA, 175 SCRA 311, July 13, 1989
 Prudencio us. CA, 143 SCRA 7, July 14, 1986
 Stelco Marketing us. CA, GR No. 96160, June 17, 1992
Far East Bank & Trust Co. us. Gold Palace Jewellery, G.R. No. 168274, Aug. 20, 2008
5. Rights of Holders Not in Due Course (Sec. 14, 16, 51, 53, NIL)
6. Accommodation Parties, Sec. 29, NIL)
7. Shelter Rule (Sec. 58, NIL)
 Charles Fossum us. Fernandez Hermanos, 44 Phil 713

Week 8

Parties who are Liable

1. Primary and Secondary Liability Distinguished (Sec. 61, 66, 192, NIL)
2. Payment by Party Secondarily Liable (Sec. 68, 70, 84, 89, 118, 120, 151, 184, NIL)
3. Liability vs. Warranties
4 Liability and/or Warranties of Parties
a. Maker (Sec. 60, NIL)
b. Drawer (Sec. 61, NIL)
i. Relationship with Drawee
ii. Relationship with Collecting Bank
 Jai-Alai us. BPI, 66 SCRA 29, Aug. 6, 1975
c. Acceptor (Sec. 62, 127, 139-141, 143, 165, 189, NIL)
 PNB us. Picornell, 46 Phil 716, Sept. 26, 1922
 PNB us. CA, 25 SCRA 693, Oct. 29, 1968
 Villanueva us. Nite, G.R. No. 148211, July 25, 2006
 Metrobank vs. Cabilzo, G.R. No. 154469, December 6, 2006
 Solidbank us. Spouses Arrieta, G.R. No. 152720, February 17, 2005
 HSBC us. Catalan, G.R. No. 159590, October 18, 2004
d. Indorsers (Sec. 63, 68, NIL)
i. General Indorser (Sec. 66, NIL)
 Ang Tiong vs. Ting, 22 SCRA 713, Feb. 22, 1968
 People us. Maniego, 148 SCRA 30, Feb. 27, 1987
 Tuazan us. Heirs of Ramos, G.R. No. 156262, July 14, 2005
(a) conditions precedent to make unqualified indorser liable
ii. Qualified Indorser (Sec. 65, NIL)
iii. Indorsers of Bearer Instruments (Sec. 40, 65, 67, NIL)
iv. Irregular Indorser (Sec. 64, NIL)
v. Liability of Accommodation Party (Sec. 29, 52, NIL)
 Clark us. Sellner, GR 16477, Nov. 22, 1921
 Crisologo us. CA, 177 SCRA 594, Sept. 15, 1989
 PNB us. Maza, GR 24224, Nov. 3, 1925
 Maulini vs. Serrano, 28 Phil 640, Dec. 16, 1914
vi. Order of Liability (Sec. 68, NIL)
 People us. Maniego
e. Persons Negotiating by Delivery (Sec. 65, NIL)
 Gonzales vs. RCBC, G.R. no. 156294, November 29, 2006
f. Liability of Agent or Broker (Sec. 19-21, 69, NIL)
 Philippine Bank of Commerce us. Aruego
g. Person Who Should Sign (Sec. 18, NIL)
i. Exceptions: Those who do not sign in their own names or whose signatures do
not appear in instrument itself but are still liable
a. trade or assumed name (Sec. 18, NIL)
b. agent/authorized representative (Sec. 19, NIL)
c. incapacitated persons signing through legal guardians
d. forgers of sigmatures (Sec. 23, NIL)
e. those precluded from setting up defense of forgery (Sec. 23, NIL)
f. constructive acceptance (Sec. 137, NIL)
g. allonge
h. negotiating by mere delivery (Sec. 65, NIL)

Week 9
Enforcement of Liability

a. Parties Primarily and Secondarily Liable

i. how to enforce primary liability (Sec. 60, 62 NIL)
b. General Steps in Enforcing Secondary Liability
i. Promissory Notes
a. Presentment for Payment (Sec. 70, NIL)
b. Notice of Dishonor (Sec. 89, NIL)
ii. Bills of Exchange
a. presentment for acceptance, when mandatory (Sec. 143, NIL)
b. if dishonored by non-acceptance
1. notice of dishonor (Sec. 89, 115, 116, NIL)
2. protest (Sec. 159, NIL)
c. if accepted
1. presentment for payment, unless excused/ not required
d. if dishonored upon presentment for payment
1. notice of dishonor
2. protest
e. for acceptor for honor, referee in case of need
1. protest for non-payment (Sec. 165, NIL)
c. Presentment for Payment
i. Concept (Sec.70, NIL)
ii. Requisites for Sufficiency of Payment (Sec. 72, NIL)
iii. Date of Presentment (Sec. 71, NIL)
iv. Rule in Determining Maturity Date (Sec. 85, NIL)
a. fixed date
b. payable on demand
c. payable at a bank (Sec. 75, NIL)
v. Rule in Computing Time (Sec. 86, NIL)
vi. Rule if Payable at a Bank (Sec. 75, 87, 127, 187, NIL)
vii. Place of Presentment (Sec. 70, 73, NIL)
viii. Presentment to Party Primarily Liable (Sec. 60, 62, 74,76,T7,T,L)
d. When Presentment Excused, Not Required (Sec. 79-82)
e. Dishonor by Non-Payment (Sec. 84, NIL)
f. Liability of Person Secondarily Liable When Instrument Dishonored (Sec 24, 36)
Crisologo-Jose us. CA, Sept. 15, 1989
 Salas us. CA, Jan. 22, 1990
 PNB vs. CA, Jan. 22, 1990
 Associated Bank us. CA, Jan. 31, 1996
 Great Eastern vs. Hong Kong Shanghai Bank, Aug. 23, 1922
 Republic us. Ebrada, July 31, 1975
 PNB us. Quimpo, March 14, 1988
 Gempesaw us. CA, Feb. 9, 1993
 PCI Bank us. CA, 350 SCRA 446
Papa us. AU Valencia, 284 SCRA 643
 Far East Realty vs. Cam, 166 SCRA 256 (1988)
 McGuire us Province of Samar, GR L-8155, Oct. 23, 1956
 Asia Banking vs. Javier, GR 19051, April 1923
Gullas vs. PNB, GR 43191, Nov. 13, 1935
Nyco Sales vs. BA Finance, 20o SCRA 637, 1991
 Great Asian Sales vs. CA, GR 105774, April 25, 2002
 Luis Wong us CA, GR 117857, Feb. 2, 2001

Week10
Enforcement of Liability, cont.
g. Presentment for Acceptance
i. How made (Sec. 145, NIL)
ii. When Made (Sec. 143, 144, NIL)
iii. Acceptance; requisites (Sec. 132, NIL)
a. how made (Sec. 132, 133-135, 137, 145, 72,75, NIL)
iv. When deemed accepted (Sec. 137, NIL)
v. Future bills (Sec. 135, NIL)
vi. Time to accept (Sec. 136, 146-147, NIL)
vii. Rule when incomplete bill accepted (Sec. 138, NIL)
viii. Kinds of Acceptance (Sec. 139-142, NIL)
h. When Presentment for Acceptance Excused (Sec. 148, NiL)
i. Dishonor by Non-Acceptance (Sec. 149-151, NIL)
j. Notice of Dishonor (Sec. 89, NIL)
i. when instrument considered dishonored (Sec. 149, N
ii. by whom given (Sec. 90, NIL)
iii. notice by agent (Sec. 91, 92, 94, NIL)
iv. time to give notice (Sec. 102-107, NIL)
v. form of notice (Sec. 95, 96, NIL)
vi. to whom notice given (Sec. 97-101, NIL)
vii. place of notice (Sec. 108, NIL)
viii. when notice not required, excused, or dispensed with (Sec. 109-115, 118,
NIL)
ix. other rules (Sec. 116, 117, NIL)
x. delay in giving notice (Sec. 113, NIL)
k. Protest
i. by whom made (Sec. 154, NIL)
ii. when required (Sec. 152, 161, 167, 170, NIL
iii. when protest need not be made (Sec. 118, NIL)
iv. protest for non-acceptance, non-payment (Sec. 157, NiL)
v. how made (Sec. 153, NIL)
vi. when to made (Sec. 155, NIL)
vii. protest for better security (Sec. 158, NIL)
viii. where made (Sec. 156, NIL)
ix. when protest dispensed with (Sec. 159, NIL)
x. protest where bill lost (Sec. 160, NIL)
I. Notice of Dishonor vs. Protest
m. Acceptance for Honor (Sec. 161-170, NIL)
n. Acceptance for Honor vs. Ordinary Acceptance
o. Payment for Honor (Sec. 173-177, NIL)
p. Acceptance for Honor vs. Payment for Honor
q. Payment by Person Primarily Liable vs Payment for Honor
r. Bills in Sets (Sec. 178-183, NIL)

Week 11
Discharge of Instruments
a. Concept of Discharge
b. How Instrument Discharged (Sec. 119, 120, NIL)
i. payment in due course (Sec. 88, NIL)
1. by the principal debtor (Sec. 119a, NIL)
2. by the accommodated party (Sec. 119b, NIL)
3. payment by person secondarily liable (See Sec. 121, NIL); right of party
who discharges instrument
4. to whom must payment be made
ii. renunciation by holder (Sec. 22, NIL)
iii. intentional cancellation
1. rule in case of unintentional cancellation (Sec. 123, NIL)
iv. any act that discharges simple contracts (Art. 1231, Civil Code)
v. principle debtor becomes holder
c. Discharge of Persons Secondarily Liable (Sec. 120, NIL)
d. Discharge of Prior Party
e. Tender of Payment
f. Release of Principal Debtor
g. Extension of Term
h. Payment for Honor (Sec. 171-177, NIL)
i. Right of Party Who Discharges Instrument (Sec. 121, NIL)
j. Surrender of Instrument upon Discharge
 State Investment House us. CA, GR 101163, Jan. 11, 1993
Week 12
Checks
a. Checks defined (Sec. 185, 186, 189, NIL)
 Banco de Oro Savings us. Equitable Banking Corp., 157 SCRA 188 (1988)
b. Distinguished from Drafts
 RP us. Philippine National Bank, GR L-16106, Dec. 30, 1961
c. Relationship between Drawer, Drawee, and Payee
d. Kinds of Checks
i. cashier's check and manager's check (See BSP Circular 259 series of 2000,
and Circular 291, series of 2001)
ii. certified check (Sec. 187-189, NIL)
 New Pacific Timber vs. Hon. Seneris, Dec. 19, 1980
 PNB us. National City Bank of New York, 63 Phil 711
iii.crossed check (Art. 541, Code of Commerce)
1. kinds of crossed check
2. effects of crossing a check
Associated Bank vs. CA, 208 SCRA 468 (1992)
 Bataan Cigar vs. CA, 230 SCRA 648, March 3, 1994
 Gempesaw vs. CA, 218 SCRA 682, Feb. 3, 1994
 State Investment House vs. CA 1989
iv. memorandum and traveller's check
 People us Nitafan, GR 75954, Oct. 22, 1992
e. Checks and Bills of Exchange Distinguished
f. Relationship between, Payee, Drawer, Drawee
 Spouses Moran us. CA, GR 105836, March 7, 1994
 Gempesaw vs. CA
 Hongkong and Shanghai Bank us. Catalan, Oct. 18, 2004
g. When Required to be Presented for Payment (Sec. 185, NIL)
h. Effect of Death of Drawer
i. Pertinent Philippine Clearing House Corp. rules; RA 7653, New Central Bank Act,
Sec. 102
i. relationship of parties
ii. warranties
iii. 24-hour rule
iv. iron clad rule for cashier's checks
 Mesina vs. IAC
j. Crimes Involving Checks
i. Estafa [Revised Penal Code, Art. 315, (2d)
ii. Batas Pambansa Blg. 22
Bouncing Checks Law
 Domangsang vs. CA, 347 SCRA 75 (2000)
iii. Check Kiting [Art.315 (1b), RPC)
 Ramos vs. CA, 203 SCRA 657

Week 13
LETTERS OFCREDIT AND TRUST RECEIPTS (Trust Receipts Law, General
Bonded Warehouse
Act, Warehouse Receipts Law, Title XIII Code of Commerce)
A. Basic concepts
1. Doctrine of independence
2. Fraud exception principle
3. Doctrine of strict compliance
4. Warehouseman's lien

B. Rights and obligations of parties

1. Entruster/entrustee
2. Applicant/banks/beneficiary

C. Remedies available

VII. REFERENCES AND OTHER MATERIALS

Prescribed Textbooks: The Philippine Negotiable Instruments Law authored by
Hector S. De Leon
Case assignments are provided in the course outline. Additional cases will be
assigned as may be necessary. The list of cases that should be read in the original will
be provided one week before class.

VIII. CONTACT AND OTHER INFORMATION

ATTY. RAIA ANGELIE A. TUMANDA

raiaangelietumanda@gmail.com
09173262946
Public Attorney's Office
Poblacion, Nabunturan
Compostela Valley Province
Consultation schedule: please text/ e-mail to set an appointment