 Metrobank informed Golden Savings that 32 of the warrants had
14. MBTC v CA
GR NO. 88866
FEBRUARY 18, 1991
Topic: UNCONDITIONAL PROMISE OR ORDER TO PAY
Petitioners: METROPOLITAN BANK & TRUST COMPANY
Respondents: COURT OF APPEALS, GOLDEN SAVINGS & LOAN ASSOCIATION, INC.,
LUCIA CASTILLO, MAGNO CASTILLO and GLORIA CASTILLO
Ponente: CRUZ, J.
RECIT-READY: Gomez deposited 38 treasury warrants with Golden
Savings which were indorsed by cashier Castillo. Castillo deposited
the same to Metrobank. She went to inquire with Metrobank
several times. Since nakulitan na si Metrobank, it allowed Golden
Savings to withdraw the proceeds although they were not yet
cleared by the Bureau of Treasury. When the Bureau finally
dishonored the warrants, Metrobank demanded a refund from
Golden Savings, which the latter rejected so Metrobank sued
Golden Savings
DOCTRINE: An instrument to be negotiable instrument must contain an
unconditional promise or orders to pay a sum certain in money.
FACTS:
 A certain Eduardo Gomez opened an account with Golden Savings
and deposited over a period of two months 38 treasury warrants
with a total value of P1,755,228.37.
o Six of these were directly payable to Gomez while the
others appeared to have been indorsed by their respective
payees, followed by Gomez as second indorser.
 All these warrants were subsequently indorsed by Gloria Castillo as
Cashier of Golden Savings and deposited to her savings account in
the Metrobank-Calapan. She went to the branch several times to
ask whether the warrant had been cleared. She was told to wait.
Meanwhile, Gomez was not allowed to withdraw from his account.
 Later, however, "exasperated" over Gloria's repeated inquiries,
Metrobank finally allowed Golden Savings to withdraw from the
proceeds of the warrants. In turn, Golden Savings allowed Gomez
to make withdrawals from his own account.
been dishonored by the Bureau of Treasury and demand the refund
from Golden Savings. The demand was rejected. Metrobank then
sued Golden Savings.
 RTC dismissed the complaint. CA affirmed. Hence, this petition.
ISSUE:
Whether or not treasury warrants are negotiable instruments - NO
Was there a legal basis for the rescission of the sale of the 3 parcels of
land? YES! And granting arguendo that NHA has legal basis to rescind, does
the petitioner have the right to claim for damages? NO!
RULING:
 The treasury warrants are not negotiable instruments.
 Clearly stamped on their face is the word: "non negotiable."
 It is indicated that they are payable from a particular fund, to wit,
Fund 501. An instrument to be negotiable instrument must contain
an unconditional promise or orders to pay a sum certain in money.
 SEC. 3. When promise is unconditional. — An unqualified order or
promise to pay is unconditional within the meaning of this Act
though coupled with — (a) An indication of a particular fund out of
which reimbursement is to be made or a particular account to be
debited with the amount; or(b) A statement of the transaction
which gives rise to the instrument. But an order or promise to pay
out of a particular fund is not unconditional.
 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 conditional” and the warrants themselves non-negotiable.
There should be no question that the exception on Section 3 of NIL
is applicable in the case at bar.
 Metrobank cannot contend that by indorsing the warrants in
general, Golden Savings assumed that they were "genuine and in
all respects what they purport to be," in accordance with Section
66 of the Negotiable Instruments Law. The simple reason is that
this law is not applicable to the non-negotiable treasury warrants.
 SC dismissed the petition.