Sesbreno vs CA (GR 89252, 24 May 1993)

Facts:
Petitioner, Raul Sesbreño made a money market placement in the amount of
P300,000.00 with the Philippine Underwriters Finance Corporation “Philfinance”.
The latter issued a Certificate of Confirmation of Sale “without recourse” from
Delta Motors Corporation Promissory Note, a Certificate of securities indicating
the sale to petitioner, with the notation that the said security was in custodianship
of Pilipinas Bank, and post-dated checks payable with petitioner as payee,
Philfinance as drawer. Petitioner approached private respondent Pilipinas Bank
and handed her a demand letter informing the bank that his placement with
Philfinance had remained unpaid and outstanding, and that he in effect was
asking for the physical delivery of the underlying promissory note. Pilipinas did
not deliver the note, nor any certificate of participation in respect thereof, to
petitioner.

Issue:
Whether or not non-negotiable instruments are transferrable.

Held:
YES. A non-negotiable instrument may, obviously, not be negotiated; but it may
be assigned or transferred, absent an express prohibition against assignment or
transfer written in the face of the instrument. It is important to bear in mind that
the negotiation of a negotiable instrument must be distinguished from the
assignment or transfer of an instrument whether that be negotiable or non-
negotiable. Only an instrument qualifying as a negotiable instrument under the
relevant statute may be negotiated either by indorsement thereof coupled with
delivery, or by delivery alone where the negotiable instrument is in bearer form. A
negotiable instrument may, however, instead of being negotiated, also be
assigned or transferred. The legal consequences of negotiation as distinguished
from assignment of a negotiable instrument are, of course, different.