NEGO CASES SEC.

ROMAN CATHOLIC OF MALOLOS V. IAC

FACTS: Petitioner was the owner of a parcel of land. It then entered into a contract of lease agreement with Robes-Fransisco Realty for the parcel of land. The agreement was that there would be downpayment plus installments with interest. Robes-Fransisco was then in default. Knowing that it was in its payment of the installments, it requested for the restructuring of the installment payments but was denied. It then asked for grace period to pay the same and tendered a check thereafter. Such was refused and the contract was cancelled. HELD: A check whether a managers check or ordinary check is not legal tender and an offer of a check in payment of a debt is not valid tender of payment and may be refused receipt by the obligee or creditor. As this is the case, the subsequent consignation of the check didn't operate to discharge RobesFransisco from its obligation to petitioner.

BPI EXPRESS CARD CORPORATION V. CA

FACTS: Marasigan was the holder of a BPI credit card. Due to his delinquency in payment, immediate demand was given by BPI to pay account. Marasigan issued a postdated check. The check was thereafter kept in custiody by BPI and card was temporarily suspended. And on a relevant date, Marasigan after eating in Caf Adriatico tried to use his card to pay but it was dishonored. HELD: The issuance of the postdated check was not effective payment on the part of Marasigan and thus, the bank was justified in suspending temporarily his use of the credit card. A check is only a substitute for money and not money, and the delivery of such instrument doesn't itself operate as payment.

CALTEX V. CA- Negotiable Instruments

FACTS: Security bank issued Certificates of Time Deposits to Angel dela Cruz. The same were given by Dela Cruz to petitioner 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. SECURITY BANK AND TRUST COMPANY 6778 Ayala Ave., Makati No. 90101 Metro Manila, Philippines SUCAT OFFICEP 4,000.00 CERTIFICATE OF DEPOSIT Rate 16% Date of Maturity FEB. 23, 1984 FEB 22, 1982, 19____ This is to Certify that B E A R E R has deposited in this Bank the sum of PESOS: FOUR THOUSAND ONLY, SECURITY BANK SUCAT OFFICE P4,000 & 00 CTS Pesos, Philippine Currency, repayable to said depositor 731 days. after date, upon presentation and surrender of this certificate, with interest at the rate of 16% per cent per annum. (Sgd. Illegible) (Sgd. Illegible) AUTHORIZED SIGNATURES HELD: CTDs are negotiable instruments. 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. Thus, petitioner's aforesaid witness merely declared that Angel de la Cruz is the depositor "insofar as the bank is concerned," but obviously other parties not privy to the transaction between them would not be in a position to know that the depositor is not the bearer stated in the CTDs. 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 aliunde. 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. The next query is whether petitioner can rightfully recover on the CTDs. This time, the answer is in the negative. The records reveal that Angel de la Cruz, whom petitioner chose not to implead in this suit for reasons of its own, delivered the CTDs amounting to P1,120,000.00 to petitioner without informing respondent bank thereof at any time. Unfortunately for petitioner, although the CTDs are bearer instruments, a valid negotiation thereof for the true purpose and agreement between it and De la Cruz, as ultimately ascertained, requires both delivery and indorsement. For, although petitioner seeks to deflect this fact, the CTDs were in reality delivered to it as a security for De la Cruz' purchases of its fuel products. Any doubt as to whether the CTDs were delivered as payment for the fuel products or as a security has been dissipated and resolved in favor of the latter by petitioner's own authorized and responsible representative himself. In a letter dated November 26, 1982 addressed to respondent Security Bank, J.Q. Aranas, Jr., Caltex Credit Manager, wrote: ". . . These certificates of deposit were negotiated to us by Mr. Angel dela Cruz to guarantee his purchases of fuel products." This admission is conclusive upon petitioner, its protestations notwithstanding. Under the doctrine of estoppel, an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon.

INCIONG V. CA
FACTS: A promissory note was issued by petitioner together with 2 others jointly and severally, to make them liable to PBC. Thereafter was a default on the payment of the note. PBC proceeded against Inciong and in the action filed by the bank, the court decided in its favor. HELD: Where the promissory note expressly states that the three signatures therein are jointly and severally liable, any one or some or all of them may be proceeded against for the entire obligationthe choice is left to the solidary creditor to determine against whom he will enforce collection.

TRADERS ROYAL BANK V. CA

FACTS: Filriters through a Detached Agreement transferred ownership to Philfinance a Central Bank Certificate of Indebtedness. It was only through one of its officers by which the CBCI was conveyed without authorization from the company. Petitioner and Philfinance later entered into a Repurchase agreement, on which petitioner bought the CBCI from Philfinance. The latter agreed to repurchase the CBCI but failed to do so. When the petitioner tried to have it registered in its name in the CB, the latter didn't want to recognize the transfer.

HELD: The CBCI is not a negotiable instrument. The instrument provides for a promise to pay the registered owner Filriters. Very clearly, the instrument was only payable to Filriters. It lacked the words of negotiability which should have served as an expression of the consent that the instrument may be transferred by negotiation. The language of negotiability which characterize a negotiable paper as a credit instrument is its freedom to circulate as a substitute for money. Hence, freedom of negotiability is the touchstone relating to the protection of holders in due course, and the freedom of negotiability is the foundation for the protection, which the law throws around a holder in due course. This freedom in negotiability is totally absent in a certificate of indebtedness as it merely acknowledges to pay a sum of money to a specified person or entity for a period of time. The transfer of the instrument from Philfinance to TRB was merely an assignment, and is not governed by the negotiable instruments law. The pertinent question then iswas the transfer of the CBCI from Filriters to Philfinance and subsequently from Philfinance to TRB, in accord with existing law, so as to entitle TRB to have the CBCI registered in its name with the Central Bank? Clearly shown in the record is the fact that Philfinances title over CBCI is defective since it acquired the instrument from Filriters fictitiously. Although the deed of assignment stated that the transfer was for value received, there was really no consideration involved. What happened was Philfinance merely borrowed CBCI from Filriters, a sister corporation. Thus, for lack of any consideration, the assignment made is a complete nullity. Furthermore, the transfer wasn't in conformity with the regulations set by the CB. Giving more credence to rule that there was no valid transfer or assignment to petitioner.

SESBRENO V. CA
FACTS: Petitioner made a placement with Philfinance. The latter delivered to him documents, some of which was a promissory note from Delta Motors and a post-dated check. The post-dated checks were dishonored. This prompted petitioner to ask for the promissory note from DMC and it was discovered that the note issued by DMC was marked as non-negotiable. As Sesbreno failed to recover his money, he filed case against DMC and Philfinance. HELD: The non-negotiability of the instrument doesnt mean that it is non-assignable or transferable. It may still be assigned or transferred in whole or in part, even without the consent of the promissory note, since consent is not necessary for the validity of the assignment. In assignment, the assignee is merely placed in the position of the assignors and acquires the instrument subject to all the defenses that might have been set up against the original payee.

SERRANO V. CA

FACTS: Serrano bought some jewelry from Ribaya. Due to need of finances, she decided to have the jewelry pawned. She instructed her secretary to do so for her, which the secretary did but absconded after receiving the proceeds. It is to be noted that the pawnshop ticket indicated that the jewelry was redeemable by presentation by the bearer. Afterwards, there was a lead on where the jewelry was pawned. An investigation was done to verify the suspicion. The jewelry was to be sold in a public auction then. The petitioner and police authorities informed the pawnshop owner not to sell the jewelry as she was the rightful owner thereof. Despite of this however, the jewelry was redeemed by a Tomasa de Leon who presented the pawnshop ticket. HELD: Having been informed by the petitioner and the police that jewelry pawned to it was either stolen or involved in an embezzlement of the proceeds of the pledge, pawnbroker became duty bound to hold the things pledged and to give notice to the petitioner and authorities of any effort to redeem them. Such a duty was imposed by Article 21 of the CC. The circumstance that the pawn ticket stated that the pawn was redeemable by the bearer, didnt dissolve this duty. The pawn ticket wasnt a negotiable instrument under the NIL, nor was it a negotiable document of title under Article 1507 of the CC.