DEVELOPMENT BANK OF RIZAL V.

SIMA WEI
219 SCRA 736

FACTS:

Sima Wei executed a promissory note in consideration of a loan secured from petitioner
bank. She was able to pay partially for the loan but failed to pay for the balance. She then
issued two checks to pay the unpaid balance but for some unexplainable reason, the checks
were not received by the bank but ended up in the hands of someone else. The bank
instituted actions against Sima Wei and other people. The trial court dismissed the case
and the CA affirmed this decision.

HELD:

A negotiable instrument, of which a check is, is not only a written evidence of a contract right
but is also a species of property. Just as a deed to a piece of land must be delivered in order to
convey title to the grantee, so must a negotiable instrument be delivered to the payee in
order to evidence its existence as a binding contract. Section 16 provides that every
contract on a negotiable instrument is incomplete and revocable until delivery of the instrument
for the purpose of giving effect thereto. Thus,
the payee of the negotiable instrument acquires no interest with respect thereto until its
delivery to him. Delivery of an instrument from the drawer to the payee, there can be no liability
on the instrument. Moreover, such delivery must be intended to give effect to the instrument.