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the spouses was not delivered and had already been previously sold to
someone else.
In the hands of one other than a holder in due course, a negotiable
instrument is subject to the same defenses as if it were non-negotiable. A
holder in due course, however, holds the instrument free from any defect
of title of prior parties and from defenses available to prior parties among
themselves, and may enforce payment of the instrument for the full
amount thereof. Since BA Finance is a holder in due course, petitioners
cannot raise the defense of non-delivery of the object and nullity of the
sale against the corporation. The NIL considers every negotiable
instrument prima facie to have been issued for a valuable consideration.
CAN AVELINO AND VMSC BE BOTH HELD LIABLE FOR FRAUDULENT
ACTS COMMITTED AGAINST THE SPOUSES?
Yes. It is a fundamental principle of corporation law that a
corporation is an entity separate and distinct from its stockholders and
from other corporations to which it may be connected. But, this separate
and distinct personality of a corporation is merely a fiction created by law
for convenience and to promote justice. The test in determining the
applicability of piercing the veil of corporate fiction is there must be
control not only of finances but also of police and business, such control
must have been used to commit fraud or wrong and such control and
breach of duty must proximately cause the injury or unjust loss
complained of.
This case meets the foregoing test. VMSC is a family-owned
corporation of which Avelino was president. Avelino committed fraud in
selling the vehicle to petitioners, a vehicle that was previously sold to
Avelinos other cousin, Esmeraldo. Nowhere in the pleadings did Avelino
refute the fact that the vehicle in this case was already previously sold to
Esmeraldo; he merely insisted that he cannot be held liable because he
was not a party to the transaction. Avelino, knowing fully well that the
vehicle was already sold, and with abuse of his relationship with the
spouses, still proceeded with the sale and collected the down payment
from petitioners. Avelino clearly defrauded petitioners. His actions were
the proximate cause of petitioners loss. He cannot now hide behind the
separate corporate personality of VMSC to escape from liability for the
amount adjudged by the trial court in favor of petitioners. Even if we are
to assume arguendo that the obligation was incurred in the name of the
corporation, the petitioner would still be personally liable therefor because
for all legal intents and purposes, he and the corporation are one and the
same. ( SPOUSES PEDRO AND FLORENCI A VI OLAGO Vs. BA FI NANCE
COPRORATI ON ET. AL., G.R. No. 158262, J ul y 21, 2008)
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The first two elements are present here, however there is insufficient
evidence presented in the instant case to show the presence of the third
requisite. All that the evidence shows is that petitioner signed the check
which is drawn against his personal account. There is no showing of when
petitioner issued the check and in what capacity. In the absence of
concrete evidence it cannot just be assumed that petitioner intended to
lend his name to the corporation. Hence, petitioner cannot be considered
as an accommodation party.
Cruiser Bus Lines and Transport Corporation, however, remains liable
for the checks especially since there is no evidence that the debts covered
by the subject checks have been paid. ( CLAUDE P. BAUTI STA Vs. AUTO
PLUS TRADERS, I NCORPORATED and COURT OF APPEALS, G.R. No.
166405, August 6, 2008)
3. Respondents-Spouses Erlando and Norma Rodriguez were clients of
petitioner Philippine National Bank (PNB). The spouses were engaged in
the informal lending business. In line with their business, they had a
discounting arrangement with the Philnabank Employees Savings and Loan
Association (PEMSLA), an association of PNB employees. Naturally,
PEMSLA was likewise a client of PNB. The association maintained current
and savings accounts with petitioner bank.
PEMSLA regularly granted loans to its members. Spouses Rodriguez
would rediscount the postdated checks issued to members whenever the
association was short of funds. As was customary, the spouses would
replace the postdated checks with their own checks issued in the name of
the members.
It was PEMSLAs policy not to approve applications for loans of
members with outstanding debts. To subvert this policy, some PEMSLA
officers devised a scheme to obtain additional loans despite their
outstanding loan accounts. They took out loans in the names of unknowing
members, without the knowledge or consent of the latter. The PEMSLA
checks issued for these loans were then given to the spouses for
rediscounting. The officers carried this out by forging the indorsement of
the named payees in the checks. In return, the spouses issued their
personal checks (Rodriguez checks) in the name of the members and
delivered the checks to an officer of PEMSLA. The PEMSLA checks, on the
other hand, were deposited by the spouses to their account.
Meanwhile, the Rodriguez checks were deposited directly by PEMSLA
to its savings account without any indorsement from the named payees.
This was an irregular procedure made possible through the facilitation of
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Edmundo Palermo, Jr., treasurer of PEMSLA and bank teller in the PNB
Branch. It appears that this became the usual practice for the parties.
For the period November 1998 to February 1999, the spouses issued
sixty nine (69) checks, in the total amount of P2,345,804.00. These were
payable to forty seven (47) individual payees who were all members of
PEMSLA.
Petitioner PNB eventually found out about these fraudulent acts. To
put a stop to this scheme, PNB closed the current account of PEMSLA. As a
result, the PEMSLA checks deposited by the spouses were returned or
dishonored for the reason "Account Closed." The corresponding Rodriguez
checks, however, were deposited as usual to the PEMSLA savings account.
The amounts were duly debited from the Rodriguez account. Thus, because
the PEMSLA checks given as payment were returned, spouses Rodriguez
incurred losses from the rediscounting transactions.
The spouses Rodriguez filed complaints for damages against PEMSLA
and PNB. They sought to recover the value of their checks that were
deposited to the PEMSLA savings account amounting to P2,345,804.00.
The spouses contended that because PNB credited the checks to the
PEMSLA account even without indorsements, PNB violated its contractual
obligation to them as depositors. PNB paid the wrong payees, hence, it
should bear the loss.
The trial court rendered a decision in favor of spouses Rodriguez and
held PNB liable to return the value of the checks.
On appeal, the Court of Appeals reversed and set aside the trial
court's decision. CA explained that the checks were bearer instruments,
thus they do not require indorsement for negotiation; and that spouses
Rodriguez and PEMSLA conspired with each other to accomplish this
money-making scheme. The payees in the checks were "fictitious payees"
because they were not the intended payees at all.
Spouses Rodriguez filed a motion for reconsideration which was
granted by the CA. Then in an Amended Decision, the CA reversed itself
and held PNB liable for the amount of the check and interests to the
spouses. The CA, in its amended decision ruled that the checks were
payable to order. According to the appellate court, PNB failed to present
sufficient proof to defeat the claim of the spouses Rodriguez that they
really intended the checks to be received by the specified payees. Thus,
PNB is liable for the value of the checks which it paid to PEMSLA without
indorsements from the named payees. Hence, this present petition filed by
PNB.
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In this case, the call to petitioner was made two days from delivery,
a reasonable period considering that the goods could not have corroded
instantly overnight such that it could only have sustained the damage
during transit. Moreover, petitioner was able to immediately inspect the
damage while the matter was still fresh. In so doing, the main objective of
the prescribed time period was fulfilled. Thus, there was substantial
compliance with the notice requirement in this case.
CAN PETITIONER BE HELD LIABLE ON THE CLAIM FOR DAMAGES?
Yes. The rule as stated in Article 1735 of the Civil Code is that in
cases where the goods are lost, destroyed or deteriorated, common
carriers are presumed to have been at fault or to have acted negligently,
unless they prove that they observed extraordinary diligence required by
law.
Here, the shipment delivered to the consignee sustained water
damage. The bill of lading issued by petitioner on July 31, 1993 contains
the notation "grounded outside warehouse," suggesting that from July 26
to 31, the goods were kept outside the warehouse. And since evidence
showed that rain fell over Manila during the same period, We can conclude
that this was when the shipment sustained water damage.
To prove the exercise of extraordinary diligence, petitioner must do
more than merely show the possibility that some other party could be
responsible for the damage. It must prove that it used "all reasonable
means to ascertain the nature and characteristic of the goods tendered for
transport and that it exercised due care in handling them.
Petitioner is thus liable for the water damage sustained by the goods
due to its failure to satisfactorily prove that it exercised the extraordinary
diligence required of common carriers. ( ABOI TI Z SHI PPI NG
CORPORATI ON Vs. I NSURANCE COMPANY OF NORTH AMERI CA, G.R.
No. 168402, August 6, 2008)