Banking

1. Sps. Silos vs. PNB

In loan agreements, the rate of interest is a principal condition. Thus, any modification thereof
must be naturally agreed upon; otherwise it has no binding effect. PNB, on its own, cannot
modify the interest rate in a loan agreement without violating the mutuality of contracts.

2. Marquez vs Desierto
Before an in camera inspection of bank accounts may be allowed, there must be a pending case
before a court of competent jurisdiction. In this case, there is no pending litigation. It was a
mere Ombudsman investigation

3. Vivas vs. Monetary Board

Bank is subjected to receivership due to insolvency and engaging in unsound banking practices.
It is justified even without a hearing as a measure of protection of public interest. Close now,
hear later.

4. PNB vs. Gancayco

A bank can be compelled to disclose records of account of a depositor:
a. Upon written permission of depositor
b. In cases of impeachment
c. Upon order of competent court in cases of bribery or dereliction of duty
d. Money is subject to litigation

5. China Banking Corporation vs. Ortega

Bank deposits can be garnished for the satisfaction of a judgment. The order of garnishment is
not an inquiry into the deposit and so not violative of the Bank Secrecy Law

6. Balayan Bay Rural Bank, PDIC vs. NLDC

The properties of an insolvent bank are not transferred by operation of law to the statutory
receiver or liquidator but rather these assets are just held in trust to be distributed to its
creditors and depositors

Letter of Credit

7. PNB vs San Miguel

Exclusive dealership agreement. In a letter of credit, there is a definite undertaking by the
issuing bank to pay the beneficiary provided the documents are presented and the conditions of
the credit are complied with. The letter of credit is separate and distinct from the underlying
transaction

Negotiable Instruments Law

8. Kauffman vs. PNB

An order transmitted by defendant bank to its New York branch for the payment of money to
Kauffman representing dividends wherein Kauffman was entitled. NIL cannot be applied since
the instrument which is the receipt is not payable to order or bearer and there was no delivery
9. Tibajia vs. CA
A check, whether manager or ordinary, is not legal tender and payment thereof maybe refused.

10. PAL vs. CA

Payment to satisfy judgment was through a check issued to the sheriff but the sheriff
appropriated it to himself and absconded. The court ruled that there is no valid payment and
PAL shall bear the loss.

11. Sesbreno vs. CA

A non-negotiable instrument may not be negotiated but may be transferred or assigned

12. Caltex vs. CA

A certificate of time deposit is negotiable

13. PBCOM vs. Aruego

The mere signing as an agent without disclosing his principal does not exempt him from
personal liability

14. Metropolitan Bank and Trust vs. CA

Treasury warrants are not negotiable instruments. It is payable from a particular fund thus
making the order or promise to pay “conditional”

15. Traders Royal vs. CA

Central Bank certificate of indebtedness is not a negotiable instrument. It lacked the words of
negotiability

16. Loreto dela Victoria vs. Burgos

Every contract on a negotiable instrument is incomplete and revocable until delivery of the
instrument for the purpose of giving effect thereto

17. Enrique Montinola vs. PNB

The indorsement must be an indorsement of the entire instrument . An indorsement which
purports to transfer to transfer to the indorsee a part only of the amount payable does not
operate as a negotiation of the instrument

18. Allied Banking vs. BPI

Last clear chance-the negligence of the plaintiff does not preclude a recovery for the negligence
of the defendant where it appears that the defendant, by exercising reasonable care and
prudence, might have avoided injurious consequences to the plaintiff, notwithstanding the
plaintiff’s negligence. Respondent bank cleared a post-dated check sent to it without observing
its own verification procedure

19. Natividad vs Gempesaw

As a rule, a drawe bank who has paid a check on which an indorsement has been forged cannot
charge the drawer’s account for the amount of said check except if drawer is guilty of negligence
which causes the bank to honor such check

20. Atrium Management Corporation vs. CA

 Checks involved were crossed checks only for deposit to payee’s account. Atrium is aware of
this. Atrium not a holder in due course

21. Marcelo Mesina vs CA

Stolen cashier’s check. Mesina not a holder in due course; he did not explain how he obtained
the check therefore he head notice of the defect of his title from the start. He cannot demand
bank to enforce such check

22. Cely Yang vs. CA

David is a holder in due course. He is not aware of any stop payment. The crossed checks were
delivered and only deposited by David, the payee named, in his bank account

23. Bataan Cigar and Cigarette Factory vs. CA

SIHI cannot recover. It is not the payee in such crossed checks. Crossing the checks should put
the holder on inquiry and upon him devolves the duty to ascertain the indorser’s title to the
check or the nature of his possession

24. Stelco Marketing Corporation vs. CA

Possession of a negotiable instrument after presentment and dishonor does not make the
possessor a holder for value and in good faith

25. Salas vs. CA

Nullity of contract of sale cannot be a defense when the Promissory note was negotiated in
writing and made payable to the order of Filinvest. Filinvest is a holder in due course.

26. Associated Bank vs. CA

Where the instrument is payable to order at the time of the forgery, the signature of its rightful
holder is essential to transfer title. When the holder’s indorsement is forged, all parties prior to
the forgery may raise the real defense of forgery against all the parties subsequent thereto. An
indorser of an order instrument warrants that the instrument is genuine

27. Papa vs. Valencia

The acceptance of a check implies an undertaking of due diligence in presenting it for payment,
and if from whom it is received sustains loss by want of such diligence, it will be held to operate
as actual payment of the debt or obligation for which it was given

28. Great Asian Sales Center Corp. and Tan Chong vs CA

Notice of dishonor is not required if the drawer has no right to expect or require the bank to
honor the check, or if the drawer has countermanded payment