G.R. No.

97753 August 10, 1992

CALTEX (PHILIPPINES), INC., petitioner,

vs.
COURT OF APPEALS and SECURITY BANK AND TRUST COMPANY,
respondents.

FACTS: Security bank issued Certificates of Time Deposits to Angel dela

Cruz. The same were given by Dela Cruz to Caltex in connection to his
purchase of fuel products of the latter. On a later date, Dela Cruz
approached the bank manager, communicated the loss of the certificates
and requested for a reissuance. Upon compliance with some formal
requirements, he was issued replacements. Thereafter, he secured a loan
from the bank where he assigned the certificates as security. Here comes
the petitioner, averred that the certificates were not actually lost but were
given as security for payment for fuel purchases. The bank demanded
some proof of the agreement but the petitioner failed to comply. The loan
matured and the time deposits were terminated and then applied to the
payment of the loan. Petitioner demands the payment of the certificates but
to no avail.

ISSUE: WON the certificates of time deposits are negotiable instruments?

RULING: Yes, The Court held that the CTDs are negotiable instruments.
The CTDs in question undoubtedly meet the requirements of the law for
negotiability.

The Negotiable Instruments Law provides, an instrument to be negotiable

must conform to certain requirements, hence,
It must be in writing and signed by the maker or drawer;
Must contain an unconditional promise or order to pay a sum certain in
money;
Must be payable on demand, or at a fixed or determinable future time;
Must be payable to order or to bearer; and
Where the instrument is addressed to a drawee, he must be named or
otherwise indicated therein with reasonable certainty.
The documents provide that the amounts deposited shall be repayable to
the depositor. And who, according to the document, is the depositor? It is
the “bearer.” The documents do not say that the depositor is Angel de la
Cruz and that the amounts deposited are repayable specifically to him.
Rather, the amounts are to be repayable to the bearer of the documents or,
for that matter, whosoever may be the bearer at the time of presentment.
If it was really the intention of respondent bank to pay the amount to Angel
de la Cruz only, it could have with facility so expressed that fact in clear
and categorical terms in the documents, instead of having the word
“BEARER” stamped on the space provided for the name of the depositor in
each CTD. On the wordings of the documents, therefore, the amounts
deposited are repayable to whoever may be the bearer thereof. Hence, the
situation would require any party dealing with the CTDs to go behind the
plain import of what is written thereon to unravel the agreement of the
parties thereto through facts aligned. This need for resort to extrinsic
evidence is what is sought to be avoided by the Negotiable Instruments
Law and calls for the application of the elementary rule that the
interpretation of obscure words or stipulations in a contract shall not favor
the party who caused the obscurity.
G.R. No. 76788 January 22, 1990

JUANITA SALAS, petitioner,

vs.
HON. COURT OF APPEALS and FIRST FINANCE & LEASING
CORPORATION, respondents.

FACTS: Petitioner bought a motor vehicle from the Violago Motor Sales
Corporation evidenced by a promissory note. The note was subsequently
endorsed to Filinvest Finance & Leasing Corporation which financed the
purchase. Petitioner defaulted in her installments because VMS delivered a
different vehicle to her. Due to her failure to pay Filinvest filed a collection
suit. The trial court ordered petitioner to pay the defendant. They both
appealed the decision to the Court of Appeals. In her appeal, she did not
implead VMS as a party to the case because she already sued VMS for
“breach of contract with damages” in another case.
The Court of Appeals modified the decision and ordered the petitioner to
pay the defendant sum of P54,908.30 at 14% per annum. Her motion for
reconsideration was denied.

ISSUE: WON he promissory note is a negotiable instrument

RULING: Yes. A careful study of the questioned promissory note shows

that it is a negotiable instrument, having complied with the requisites under
the law as follows: [a] it is in writing and signed by the maker Juanita Salas;
[b] it contains an unconditional promise to pay the amount of P58,138.20;
[c] it is payable at a fixed or determinable future time which is "P1,614.95
monthly for 36 months due and payable on the 21st day of each month
starting March 21, 1980 thru and inclusive of Feb. 21, 1983;" [d] it is
payable to Violago Motor Sales Corporation, or order and as such, [e] the
drawee is named or indicated with certainty.
It was negotiated by indorsement in writing on the instrument itself payable
to the Order of Filinvest Finance and Leasing Corporation and it is an
indorsement of the entire instrument.
G.R. No. 113236 March 5, 2001

FIRESTONE TIRE & RUBBER COMPANY OF THE PHILIPPINES,

petitioner,
vs.
COURT OF APPEALS and LUZON DEVELOPMENT BANK, respondents.

FACTS: Forjas-Arca Enterprise Company is maintaining a special savings

account with Luzon Development Bank, the latter authorized and allowed
withdrawals of funds though the medium of special withdrawal slips. These
are supplied by Fojas-Arca. Fojas-Arca purchased on credit with
FirestoneTire & Rubber Company, in payment Fojas-Arca delivered a 6
special withdrawal slips. In turn, these were deposited by the Firsestone to
its bank account in Citibank. With this, relying on such confidence and
belief Firestone extended to Fojas-Arca other purchase on credit of its
products but several withdrawal slips were dishonored and not paid. As a
consequence, Citibank debited the plaintiff’s account representing the
aggregate amount of the two dishonored special withdrawal slips. Fojas-
Arca averred that the pecuniary losses it suffered are a caused by and
directly attributes to defendant’s gross negligence as a result Fojas-Arca
filed a complaint.

ISSUE: WON the Withdrawal slips are negotiable instrument

RULING: NO, No. Withdrawal slips in question were non-negotiable

instrument. Hence, the rules governing the giving immediate notice of
dishonor of negotiable instrument do not apply. The essence of
negotiability which characterizes a negotiable paper as a credit instrument
lies in its freedom to circulate freely as a substitute for money. The
withdrawal slips in question lacked this character.