Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-!"# $eb%ua%& "' #()#
ENR*+UE P. MONT*NOLA' plaintiff-appellant'
,s.
T-E P-*L*PP*NE NAT*ONAL BAN.' ET AL.' /efen/ants-appellees.
+ui0ano' Rosete an/ Lucena fo% appellant.
Secon/ Assistant Co%po%ate Counsel -ila%ion U. 1a%encio fo% appellee Philippine National
Ban2.
Office of the Solicito% Gene%al $eli3 Bautista An4elo an/ Solicito% Au4usto M. Luciano
fo% appellee P%o,incial T%easu%e% of Misa5is O%iental.
MONTEMA6OR' 1.7
*n Au4ust' #(89' En%i:ue P. Montinola file/ a co5plaint in the Cou%t of $i%st *nstance of
Manila a4ainst the Philippine National Ban2 an/ the P%o,incial T%easu%e% of Misa5is
O%iental to collect the su5 of P#;;';;;' the a5ount of Chec2 No. #<! issue/ on Ma& '
#(8 b& the P%o,incial T%easu%e% of Misa5is O%iental to Ma%iano =. Ra5os an/
suppose/l& in/o%se/ to Montinola. Afte% hea%in4' the cou%t %en/e%e/ a /ecision /is5issin4
the co5plaint >ith costs a4ainst plaintiff-appellant. Montinola has appeale/ f%o5 that
/ecision /i%ectl& to this Cou%t inas5uch as the a5ount in cont%o,e%s& e3cee/s P);';;;.
The%e is no /ispute as to the follo>in4 facts. *n Ap%il an/ Ma&' #(8' Ubal/o ?. La&a
>as the P%o,incial T%easu%e% of Misa5is O%iental. As such P%o,incial T%easu%e% he >as e3
officio a4ent of the Philippine National Ban2 b%anch in the p%o,ince. Ma%iano =. Ra5os
>o%2e/ un/e% hi5 as assistant a4ent in the ban2 b%anch afo%e5entione/. *n Ap%il of that
&ea% #(8' the cu%%enc& bein4 use/ in Min/anao' pa%ticula%l& Misa5is O%iental an/
Lanao >hich ha/ not &et been occupie/ b& the 1apanese in,a/in4 fo%ces' >as the
e5e%4enc& cu%%enc& >hich ha/ been issue/ since 1anua%&' #(8 b& the Min/anao
E5e%4enc& Cu%%enc& Boa%/ b& autho%it& of the late P%esi/ent +ue@on.
About Ap%il "' #(8' th%u the %eco55en/ation of P%o,incial T%easu%e% La&a' his
assistant a4ent M. =. Ra5os >as in/ucte/ into the Unite/ States A%5e/ $o%ces in the $a%
East AUSA$$EB as /isbu%sin4 office% of an a%5& /i,ision. As such /isbu%sin4 office%' M.
=. Ra5os on Ap%il <;' #(8' >ent to the nei4hbo%in4 P%o,ince Lanao to p%ocu%e a cash
a/,ance in the a5ount of P!;;';;; fo% the use of the USA$$E in Ca4a&an /e Misa5is.
Pe/%o Enca%nacion' P%o,incial T%easu%e% of Lanao /i/ not ha,e that a5ount in cash. So'
he 4a,e Ra5os P<;;';;; in e5e%4enc& notes an/ a chec2 fo% P);;';;;. On Ma& ' #(8
Ra5os >ent to the office of P%o,incial T%easu%e% La&a at Misa5is O%iental to encash the
chec2 fo% P);;';;; >hich he ha/ %ecei,e/ f%o5 the P%o,incial T%easu%e% of Lanao. La&a
/i/ not ha,e enou4h cash to co,e% the chec2 so he 4a,e Ra5os P8;;';;; in e5e%4enc&
notes an/ a chec2 No. #<! fo% P#;;';;; /%a>n on the Philippine National Ban2.
Acco%/in4 to La&a he ha/ p%e,iousl& /eposite/ P);;';;; e5e%4enc& notes in the
Philippine National Ban2 b%anch in Cebu an/ he e3pecte/ to ha,e the chec2 issue/ b&
hi5 cashe/ in Cebu a4ainst sai/ /eposit.
Ra5os ha/ no oppo%tunit& to cash the chec2 because in the e,enin4 of the sa5e /a& the
chec2 >as issue/ to hi5' the 1apanese fo%ces ente%e/ the capital of Misa5is O%iental' an/
on 1une #;' #(8' the USA$$E fo%ces to >hich he >as attache/ su%%en/e%e/. Ra5os >as
5a/e a p%isone% of >a% until $eb%ua%& #' #(8<' afte% >hich' he >as %elease/ an/ he
%esu5e/ his status as a ci,ilian.
About the last /a&s of ?ece5be%' #(88 o% the fi%st /a&s of 1anua%&' #(8)' M. =. Ra5os
alle4e/l& in/o%se/ this chec2 No. #<! to En%i:ue P. Montinola. The ci%cu5stances an/
con/itions un/e% >hich the ne4otiation o% t%ansfe% >as 5a/e a%e in cont%o,e%s&.
Acco%/in4 to MontinolaCs ,e%sion' so5eti5e in 1une' #(88' Ra5os' nee/in4 5one& >ith
>hich to bu& foo/stuffs an/ 5e/icine' offe%e/ to sell hi5 the chec2D to be su%e that it >as
4enuine an/ ne4otiable' Montinola' acco5panie/ b& his a4ents an/ b& Ra5os hi5self'
>ent to see P%esi/ent Ca%5ona of the Philippine National Ban2 in Manila about sai/
chec2D that afte% e3a5inin4 it P%esi/ent Ca%5ona tol/ hi5 that it >as ne4otiable but that
he shoul/ not let the 1apanese catch hi5 >ith it because possession of the sa5e >oul/
in/icate that he >as still >aitin4 fo% the %etu%n of the A5e%icans to the PhilippinesD that he
an/ Ra5os finall& a4%ee/ to the sale of the chec2 fo% P!);';;; 1apanese 5ilita%& notes'
pa&able in install5entsD that of this a5ount' P8);';;; >as pai/ to Ra5os in 1apanese
5ilita%& notes in fi,e install5ents' an/ the balance of P8;;';;; >as pai/ in 2in/' na5el&'
fou% bottles of sulphatia sole' each bottle containin4 #';;; tablets' an/ each tablet ,alue/
at P#;;D that upon pa&5ent of the full p%ice' M. =. Ra5os /ul& in/o%se/ the chec2 to
hi5. This in/o%se5ent >hich no> appea%s on the bac2 of the /ocu5ent is /esc%ibe/ in
/etail b& t%ial cou%t as follo>s7
The en/o%se5ent no> appea%in4 at the bac2 of the chec2 Asee E3hibit A-#B 5a& be
/esc%ibe/ as follo>s7 The >oo/s' Epa& to the o%/e% ofE F in %ubbe% sta5p an/ in ,iolet
colo% a%e place/ about one inch f%o5 the top. This is follo>e/ b& the >o%/s EEn%i:ue P.
MontinolaE in t&pe>%itin4 >hich is app%o3i5atel& )G! an inch belo> the sta5pe/ >o%/s
Epa& to the o%/e% ofE. Belo> EEn%i:ue P. MontinolaE' in t&pe>%itin4 a%e >o%/s an/ fi4u%es
also in t&pe>%itin4' E)#9 *sabel St%eetE an/ about HG! of an inch the%ef%o5' the e/4es of
the chec2 appea% to ha,e been bu%ne/' but the%e a%e >o%/s sta5pe/ appa%entl& in %ubbe%
sta5p >hich' acco%/in4 to Montinola' a%e a facsi5ile of the si4natu%e of Ra5os. The%e is
a si4natu%e >hich appa%entl& %ea/s EM. =. Ra5osE also in 4%een in2 but 5a/e in
han/>%itin4.E
To the abo,e /esc%iption >e 5a& a// that the na5e of M. =. Ra5os is han/ p%inte/ in
4%een in2' un/e% the si4natu%e. Acco%/in4 to Montinola' he as2e/ Ra5os to han/ p%int it
because Ra5osC si4natu%e >as not clea%.
Ra5os in his tu%n tol/ the cou%t that the a4%ee5ent bet>een hi5self an/ Montinola
%e4a%/in4 the t%ansfe% of the chec2 >as that he >as sellin4 onl& P<;';;; of the chec2 an/
fo% this %eason' at the bac2 of the /ocu5ent he >%ote in lon4han/ the follo>in47
Pa& to the o%/e% of En%i:ue P. Montinola P<;';;; onl&. The balance to be /eposite/ in the
Philippine National Ban2 to the c%e/it of M. =. Ra5os.
Ra5os fu%the% sai/ that in e3chan4e fo% this assi4n5ent of P<;';;; Montinola >oul/ pa&
hi5 P(;';;; in 1apanese 5ilita%& notes but that Montinola 4a,e hi5 onl& t>o chec2s of
P;';;; an/ P)';;;' lea,in4 a balance unpai/ of P8)';;;. *n this he >as co%%obo%ate/
b& Att&. Si5eon Ra5os 1%. >ho tol/ the cou%t that the a4%ee5ent bet>een Ra5os an/
Montinola >as that the latte%' fo% the sale to hi5 of P<;';;; of the chec2' >as to pa&
Ra5os P(;';;; in 1apanese 5ilita%& notesD that >hen the fi%st chec2 fo% P;';;; >as
issue/ b& Montinola' he ASi5eonB p%epa%e/ a /ocu5ent e,i/encin4 sai/ pa&5ent of
P;';;;D that >hen the secon/ chec2 fo% P)';;; >as issue/ b& Montinola' he ASi5eonB
p%epa%e/ anothe% /ocu5ent >ith t>o copies' one fo% Montinola an/ the othe% fo% Ra5os'
both si4ne/ b& Montinola an/ M. =. Ra5os' e,i/encin4 sai/ pa&5ent' >ith the
un/e%stan/in4 that the balance of P8)';;; >oul/ be pai/ in a fe> /a&s.
The in/o%se5ent o% >%itin4 /esc%ibe/ b& M. =. Ra5os >hich ha/ been >%itten b& hi5 at
the bac2 of the chec2' E3hibit A' /oes not no> appea% at the bac2 of sai/ chec2. Ihat
appea%s the%eon is the in/ose5ent testifie/ to b& Montinola an/ /esc%ibe/ b& the t%ial
cou%t as %ep%o/uce/ abo,e. Befo%e 4oin4 into a /iscussion of the 5e%its of the ,e%sion
4i,en b& Ra5os an/ Montinola as to the in/o%se5ent o% >%itin4 at the bac2 of the chec2'
it is >ell to 4i,e a fu%the% /esc%iption of it as >e shall late%.
Ihen Montinola file/ his co5plaint in #(89 he state/ the%ein that the chec2 ha/ been
lost' an/ so in lieu the%eof he file/ a suppose/ photostic cop&. -o>e,e%' at the t%ial' he
p%esente/ the chec2 itself an/ ha/ its face 5a%2e/ E3hibit A an/ the bac2 the%eof E3hibit
A-#. But the chec2 is ba/l& 5utilate/' bottle/' to%n an/ pa%tl& bu%ne/' an/ its con/ition
can best be app%eciate/ b& seein4 it. Rou4hl&' it 5a& be state/ that loo2in4 at the face of
the chec2 AE3hibit AB >e see that the left thi%/ po%tion of the pape% has been cut off
pe%pen/icula%l& an/ se,e%e/ f%o5 the %e5ainin4 G< po%tionD a t%ian4ula% po%tion of the
uppe% %i4ht han/ co%ne% of sai/ %e5ainin4 G< po%tion has been si5ila%l& cut off an/
se,e%e/' an/ to 2eep an/ attach this t%ian4ula% po%tion an/ the %ectan4ula% HG< po%tion to
the %est of the /ocu5ent' the enti%e chec2 is paste/ on both si/es >ith cellophaneD the
e/4es of the se,e%e/ po%tions as >ell as of the %e5ainin4 5a0o% po%tion' >he%e cut bea%
t%aces of bu%nin4 an/ sea%in4D the%e is a bi4 blot >ith in/elible in2 about the %i4ht 5i//le
po%tion' >hich see5s to ha,e penet%ate/ to the bac2 of the chec2 AE3hibit A-#B' >hich
bac2 bea%s a la%4e% s5ea% %i4ht un/e% the blot' but not blac2 an/ sha%p as the blot itselfD
finall&' all this tea%in4' bu%nin4' blottin4 an/ s5ea%in4 an/ pastin4 of the chec2 %en/e%s it
/ifficult if not i5possible to %ea/ so5e of the >o%/s an/ fi4u%es on the chec2.
*n e3planation of the 5utilation of the chec2 Montinola tol/ the cou%t that se,e%al 5onths
afte% in/o%sin4 an/ /eli,e%in4 the chec2 to hi5' Ra5os /e5an/e/ the %etu%n of the chec2
to hi5' th%eatenin4 Montinola >ith bo/il& ha%5' e,en /eath b& hi5self o% his 4ue%%illa
fo%ces if he /i/ not %etu%n sai/ chec2' an/ that in o%/e% to 0ustif& the non-/eli,e%& of the
/ocu5ent an/ to /iscou%a4e Ra5os f%o5 4ettin4 it bac2' he AMontinolaB ha/ to %eso%t to
the 5utilation of the /ocu5ent.
As to >hat >as %eall& >%itten at the bac2 of the chec2 >hich Montinola clai5s to be a full
in/o%se5ent of the chec2' >e a4%ee >ith t%ial cou%t that the o%i4inal >%itin4 of Ra5os on
the bac2 of the chec2 >as to the effect that he >as assi4nin4 onl& P<;';;; of the ,alue of
the /ocu5ent an/ that he >as inst%uctin4 the ban2 to /eposit to his c%e/it the balance.
This >%itin4 >as in so5e 5&ste%ious >a& oblite%ate/' an/ in its place >as place/ the
p%esent in/o%se5ent appea%in4 the%eon. Sai/ p%esent in/o%se5ent occupies a 4oo/ po%tion
of the bac2 of the chec2. *t has al%ea/& been /esc%ibe/ in /etail. As to ho> sai/ p%esent
in/o%se5ent ca5e to be >%itten' the ci%cu5stances su%%oun/in4 its p%epa%ation' the
suppose/ pa%ticipation of M. =. Ra5os in it an/ the >%itin4 o%i4inall& appea%in4 on the
%e,e%se si/e of the chec2' E3hibit A-#' >e :uote >ith app%o,al >hat the t%ial cou%t
p%esi/e/ o,e% b& 1u/4e Con%a/o =. Sanche@' in its >ell-p%epa%e/ /ecision' sa&s on these
points7
The alle4e/l& in/o%se5ent7 EPa& to the o%/e% of En%i:ue P. Montinola the a5ount of
P<;';;; onl&. The balance to be /eposite/ to the c%e/it of M. =. Ra5osE' si4ne/ b& M. =.
Ra5os-acco%/in4 to the latte%-/oes not no> appea% at the bac2 of the chec2. A /iffe%ent
in/o%se5ent' as afo%esai/' no> appea%s.
-a/ Montinola %eall& pai/ in full the su5 of P!);';;; in 1apanese Milita%& Notes as
consi/e%ation fo% the chec2J The follo>in4 obse%,ations a%e in point7
AaB Acco%/in4 to plaintiffCs >itness G%e4o%io A. Co%ta/o' the o,al line in ,iolet' enclosin4
EP.E of the >o%/s EEn%i:ue P. MontinolaE an/ the line in the fo%5 of cane han/le c%ossin4
the >o%/ Est%eetE in the >o%/s an/ fi4u%es E)#9 *sabel St%eetE in the en/o%se5ent E3hibit
A-# EunusualE to hi5' an/ that as fa% as he coul/ %e5e5be% this >%itin4 /i/ not appea% on
the inst%u5ent an/ he ha/ no 2no>le/4e as to ho> it happene/ to be the%e. Ob,iousl&
Co%ta/o ha/ no %ecollection as to ho> such 5a%2s e,e% >e%e sta5pe/ at the bac2 of the
chec2.
AbB A4ain Co%ta/o' spea2in4 of the en/o%se5ent as it no> appea%s at the bac2 of the
chec2 AE3h. A-#B state/ that Ra5os t&pe>%ote these >o%/s outsi/e of the p%e5ises of
Montinola' that is' a nea%b& house. Montinola' on the othe% han/' testifie/ that Ra5os
t&pe>%ote the >o%/s EEn%i:ue P. Montinola )#9 *sabel St%eetE' in his o>n house.
Spea2in4 of the %ubbe% sta5p use/ at the bac2 of the chec2 an/ >hich p%o/uce/ the
>o%/s Epa& to the o%/e% ofE' Co%ta/o state/ that >hen he ACo%ta/oB' Ata/e%o' Montinola
an/ Ra5os %etu%ne/ in 4%oup to the house of Montinola' the %ubbe% sta5p >as al%ea/& in
the house of Montinola' an/ it >as on the table of the uppe% floo% of the house' to4ethe%
>ith the sta5p pa/ use/ to sta5p the sa5e. Montinola' on the othe% han/' testifie/ that
Ra5os ca%%ie/ in his poc2et the sai/ %ubbe% sta5p as >ell as the in2 pa/' an/ sta5pe/ it
in his house.
The unusuall& bi4 space occupie/ b& the in/o%se5ent on the bac2 of the chec2 an/ the
/isc%epancies in the ,e%sions of Montinola an/ his >itness Co%ta/o 0ust note/' c%eate
/oubts as to >hethe% o% not %eall& Ra5os 5a/e the in/o%se5ent as it no> appea%s at the
bac2 of E3hibit A. One thin4 /ifficult to un/e%stan/ is >h& Ra5os shoul/ 4o into the
labo%ious tas2 of placin4 the %ubbe% sta5p EPa& to the o%/e% ofE an/ afte%>a%/s 5o,e to
the t&pe>%ite% an/ >%ite the >o%/s EEn%i:ue P. MontinolaE Ean/ E)#9 *sabel St%eetE' an/
finall& si4n his na5e too fa% belo> the 5ain in/o%se5ent.
AcB Anothe% ci%cu5stances >hich bea%s hea,il& upon the clai5 of plaintiff Montinola that
he ac:ui%e/ the full ,alue of the chec2 an/ pai/ the full consi/e%ation the%efo% is the
p%esent con/ition of sai/ chec2. *t is no> so unclean an/ /iscolo%e/D it is paste/ in
cellophane' bottle/ >ith in2 on both si/es to%n th%ee pa%ts' an/ >ith po%tions the%eof
bu%ne/-all /one b& plaintiff' the alle4e/ o>ne% the%eof.
The acts /one b& the ,e%& plaintiff on a /ocu5ent so i5po%tant an/ ,aluable to hi5' an/
>hich acco%/in4 to hi5 in,ol,es his life sa,in4s' app%o3i5ate intentional cancellation.
The onl& %eason a/,ance/ b& plaintiff as to >h& to%e chec2' bu%ne/ the to%n e/4es an/
bottle/ out the %e4ist%ation at the bac2' is foun/ in the follo>in47 That Ra5os ca5e to his
house' a%5e/ >ith a %e,ol,e%' th%eatene/ his life an/ /e5an/e/ f%o5 hi5 the %etu%n of the
chec2D that >hen he info%5e/ Ra5os that he /i/ not ha,e it in the house' but in so5e
/eposit outsi/e the%eof an/ that Ra5os p%o5ise/ to %etu%n the ne3t /a&D that the sa5e
ni4ht he to%e the chec2 into th%ee pa%ts' bu%ne/ the si/es >ith a pa%%afin can/le to sho>
t%aces of bu%nin4D an/ that upon the %etu%n of Ra5os the ne3t /a& he sho>e/ the t>o pa%ts
of the chec2' the t%ian4le on the %i4ht uppe% pa%t an/ the to%n piece on the left pa%t' an/
upon seein4 the con/ition the%eof Ra5os /i/ not bothe% to 4et the chec2 bac2. -e also
sai/ that he place/ the blots in in/elible in2 to p%e,ent Ra5os F if he >oul/ be fo%ce/ to
su%%en/e% the 5i//le pa%t of the chec2 F f%o5 seein4 that it >as %e4iste%e/ in the Gene%al
Au/itin4 Office.
Conce/in4 at the 5o5ent these facts to be t%ue' the :uestion is7 Ih& shoul/ Montinola
be af%ai/ of Ra5osJ Montinola clai5s that Ra5os >ent the%e about Ap%il' #(8)' that is'
/u%in4 libe%ation. *f he belie,e/ he >as stan/in4 b& his %i4hts' he coul/ ha,e ,e%& >ell
sou4ht police p%otection o% t%ansfe%%e/ to so5e place >he%e Ra5os coul/ not bothe% hi5.
An/ then' %eall& Ra5os /i/ not ha,e an&thin4 5o%e to /o >ith this chec2 fo% the %eason
that Montinola ha/ obtaine/ in full the a5ount the%eof' the%e coul/ not be an& %eason >h&
Ra5os shoul/ ha,e th%eatene/ Montinola as state/ b& the latte%. Un/e% the ci%cu5stances'
the 5ost lo4ical conclusion is that Ra5os >ante/ the chec2 at all costs because
Montinola /i/ not ac:ui%e the chec2 to such an e3tent that it bo%/e%s on intentional
cancellation the%eof Asee Sections ##(-#< Ne4otiable *nst%u5ents La>B the%e is %oo5 to
belie,e that Montinola /i/ not ha,e so 5uch in,est5ents in that chec2 as to a/opte/ an
E>hat /o * ca%eJE attitu/e.
An/ the%e is the ci%cu5stance of the alle4e/ loss of the chec2. At the ti5e of the filin4 of
the co5plaint the chec2 >as alle4e/l& lost' so 5uch so that a photostatic cop& the%eof
>as 5e%el& attache/ to the co5plaint Asee pa%a4%aph 9 of the co5plaintB. 6et' /u%in4 the
t%ial the o%i4inal chec2 E3hibit A >as p%o/uce/ in cou%t.
But a co5pa%ison bet>een the photostatic cop& an/ the o%i4inal chec2 %e,eals
/isc%epancies bet>een the t>o. The con/ition of the chec2 as it >as p%o/uce/ is such that
it >as pa%tiall& bu%ne/' pa%tiall& blotte/' ba/l& 5utilate/' /iscolo%e/ an/ paste/ >ith
cellophane. Ihat is >o%se is that MontinolaCs e3cuse as to ho> it >as lost' that it >as
5i3e/ up >ith househol/ effects is not plausible' consi/e%in4 the fact that it in,ol,es his
life sa,in4s' an/ that befo%e the alle4e/ loss' he too2 e3t%e5e pains an/ p%ecautions to
sa,e the chec2 f%o5 the possible %a,a4es of the >a%' ha/ it photo4%aphe/' %e4iste%e/ sai/
chec2 >ith the Gene%al Au/itin4 Office an/ he 2ne> that Ra5os' since libe%ation' >as
hot afte% the possession of that chec2.
A/B *t see5s that Montinola >as not so su%e as to >hat he ha/ testifie/ to in %efe%ence to
the consi/e%ation he pai/ fo% the chec2. *n cou%t he testifie/ that he pai/ P8);';;; in cash
f%o5 1une to ?ece5be% #(88' an/ P8;;';;; >o%th of sulphatia@ole in 1anua%& #(8) to
co5plete the alle4e/ consi/e%ation of P!);';;;. Ihen Montinola testifie/ this >a& in
cou%t' ob,iousl& he o,e%loo2e/ a lette% he >%ote to the p%o,incial t%easu%e% of Ca4a&an'
O%iental Misa5is' /ate/ Ma& #' #(89' E3hibit < the %eco%/. *n that lette% E3hibit <'
Montinola tol/ P%o,incial T%easu%e% Eli@al/e of Misa5is O%iental that ERa5os en/o%se/
it A%efe%%in4 to chec2B to 5e fo% 4oo/s in 2in/' 5e/icine' etc.' %ecei,e/ b& hi5 fo% the use
of the 4ue%%illas.E *n sai/ lette% E3hibit <' Montinola /i/ not 5ention the cash that he pai/
fo% the chec2.
$%o5 the fo%e4oin4 the cou%t conclu/es that plaintiff Montinola ca5e into the possession
of the chec2 in :uestion about the en/ of ?ece5be% #(88 b& %eason of the fact that M. =.
Ra5os sol/ to hi5 P<;';;; of the face ,alue the%eof in consi/e%ation of the su5 of
P(;';;; 1apanese 5one&' of >hich onl& one-half o% P8)';;; Ain 1apanese 5one&B >as
actuall& pai/ b& sai/ plaintiff to Ra5os. AR. on A.' pp. <#-<<D B%ief of Appellee' pp. #8-
;.B
At the be4innin4 of this /ecision' >e state/ that as P%o,incial T%easu%e% of Misa5is
O%iental' Ubal/o ?. La&a >as e3 officio a4ent of the Philippine National Ban2 b%anch in
that p%o,ince. On the face of the chec2 AE3h. AB >e no> fin/ the >o%/s in pa%enthesis
EA4ent' Phil. National Ban2E un/e% the si4natu%e of La&a' pu%po%te/l& sho>in4 that he
issue/ the chec2 as a4ent of the Philippine National Ban2. *t this is t%ue' then the ban2 is
not onl& /%a>ee but also a /%a>e% of the chec2' an/ Montinola e,i/entl& is t%&in4 to hol/
the Philippine National Ban2 liable in that capacit& of /%a>e%' because as /%a>ee alone'
inas5uch as the ban2 has not &et accepte/ o% ce%tifie/ the chec2' it 5a& &et a,oi/
pa&5ent.
La&a' testif&in4 in cou%t' state/ that he issue/ the chec2 onl& as P%o,incial T%easu%e%' an/
that the >o%/s in pa%enthesis EA4ent' Phil. National Ban2E no> appea%in4 un/e% his
si4natu%e /i/ not appea% on the chec2 >hen he issue/ the sa5e. *n this he >as
co%%obo%ate/ b& the pa&ee M. =. Ra5os >ho e:uall& assu%e/ the cou%t that >hen he
%ecei,e/ the chec2 an/ then /eli,e%e/ it to Montinola' those >o%/s /i/ not appea% un/e%
the si4natu%e of Ubal/o ?. La&a. Ie a4ain :uote >ith app%o,al the pe%tinent po%tion of
the t%ial cou%tCs /ecision7
The :uestion is %e/uce/ to >hethe% o% not the >o%/s' EA4ent' Phil. National Ban2E >e%e
a//e/ afte% La&a ha/ issue/ the chec2. *n a st%ai4htfo%>a%/ 5anne% an/ >ithout
,acillation La&a positi,el& testifie/ that the chec2 E3hibit A >as issue/ b& hi5 in his
capacit& as P%o,incial T%easu%e% of Misa5is O%iental an/ that the >o%/s EA4ent' Phil.
National Ban2E >hich no> appea% on the chec2 E3hibit A >e%e not t&pe>%itten belo> his
si4natu%e >hen he si4ne/ the sai/ chec2 an/ /eli,e%e/ the sa5e to Ra5os. La&a assu%e/
the cou%t that the%e coul/ not be an& 5ista2e as to this. $o%' acco%/in4 to La&a' >hen he
issue/ chec2 in his capacit& as a4ent of the Misa5is O%iental a4enc& of the Philippine
National Ban2 the sai/ chec2 5ust be counte%si4ne/ b& the cashie% of the sai/ a4enc& F
not b& the p%o,incial au/ito%. -e also testifie/ that the sai/ chec2 >as issue/ b& hi5 in
his capacit& as p%o,incial t%easu%e% of Misa5is O%iental an/ that is >h& the sa5e >as
counte%si4ne/ b& P%o,incial Au/ito% $lo%es. The P%o,incial Au/ito% at that ti5e ha/ no
connection in an& capacit& >ith the Misa5is O%iental a4enc& of the Philippine National
Ban2. Plaintiff Montinola on the othe% han/ testifie/ that >hen he %ecei,e/ the chec2
E3hibit A it al%ea/& bo%e the >o%/s EA4ent' Phil. National Ban2E belo> the si4natu%e of
La&a an/ the p%inte/ >o%/s EP%o,incial T%easu%e%E.
Afte% consi/e%in4 the testi5on& of the one an/ the othe%' the cou%t fin/s that the
p%epon/e%ance of the e,i/ence suppo%ts La&aCs testi5on&. *n the fi%st place' his testi5on&
>as co%%obo%ate/ b& the pa&ee M. =. Ra5os. But >hat %en/e%s 5o%e p%obable the
testi5on& of La&a an/ Ra5os is the fact that the 5one& fo% >hich the chec2 >as issue/
>as e3p%essl& fo% the use of the USA$$E of >hich Ra5os >as then /isbu%sin4 office%' so
5uch so that upon the /eli,e%& of the P8;;';;; in e5e%4enc& notes an/ the P#;;';;;
chec2 to Ra5os' La&a c%e/ite/ his /eposito%& accounts as p%o,incial t%easu%e% >ith the
co%%espon/in4 c%e/it ent%&. *n the no%5al cou%se of e,ents the chec2 coul/ not ha,e been
issue/ b& the ban2' an/ this is bo%ne b& the fact that the si4natu%e of La&a >as
counte%si4ne/ b& the p%o,incial au/ito%' not the ban2 cashie%. An/ then' too the%e is the
ci%cu5stance that this chec2 >as issue/ b& the p%o,incial t%easu%e% of Lanao to Ra5os
>ho %e:uisitione/ the sai/ fun/s in his capacit& as /isbu%sin4 office% of the USA$$E. The
chec2' E3hibit A is not >hat >e 5a& te%5 in business pa%lance' Ece%tifie/ chec2E o%
Ecashie%Cs chec2.E
Besi/es' at the ti5e the chec2 >as issue/' La&a al%ea/& 2ne> that Cebu an/ Manila >e%e
al%ea/& occupie/. -e coul/ not ha,e the%efo%e issue/ the chec2-as a ban2 e5plo&ee-
pa&able at the cent%al office of the Philippine National Ban2.
Upon the fo%e4oin4 ci%cu5stances the cou%t conclu/es that the >o%/s EA4ent' Phil.
National Ban2C belo> the si4natu%e of Ubal/o ?. La&a an/ the p%inte/ >o%/s EP%o,incial
T%easu%e%E >e%e a//e/ in the chec2 afte% the sa5e >as issue/ b& the P%o,incial T%easu%e%
of Misa5is O%iental.
$%o5 all the fo%e4oin4' >e 5a& safel& conclu/e as >e /o that the >o%/s EA4ent' Phil.
National Ban2E no> appea%in4 on the face of the chec2 AE3h. AB >e%e a//e/ o% place/ in
the inst%u5ent afte% it >as issue/ b& P%o,incial T%easu%e% La&a to M. =. Ra5os. The%e is
no %eason 2no>n to us >h& P%o,incial T%easu%e% La&a shoul/ issue the chec2 AE3h. AB as
a4ent of the Philippine National Ban2. Sai/ chec2 fo% P#;;';;; >as issue/ to co5plete
the pa&5ent of the othe% chec2 fo% P);;';;; issue/ b& the P%o,incial T%easu%e% of Lanao
to Ra5os' as pa%t of the a/,ance fun/s fo% the USA$$E in Ca4a&an /e Misa5is. The
balance of P8;;';;; in cash >as pai/ to Ra5os b& La&a f%o5 the fun/s' not of the ban2
but of the P%o,incial T%easu%&. Sai/ USA$$E >e%e bein4 finance/ not b& the Ban2 but b&
the Go,e%n5ent an/' p%esu5abl&' one of the %easons fo% the issuance of the e5e%4enc&
notes in Min/anao >as fo% this pu%pose. As al%ea/& state/' acco%/in4 to P%o,incial
T%easu%e% La&a' upon %ecei,in4 a %elati,el& consi/e%able a5ount of these e5e%4enc&
notes fo% his office' he /eposite/ P);;';;; of sai/ cu%%enc& in the Philippine National
Ban2 b%anch in Cebu' an/ that in issuin4 the chec2 AE3h. AB' he e3pecte/ to ha,e it
cashe/ at sai/ Cebu ban2 b%anch a4ainst his /eposit of P);;';;;.
The lo4ical conclusion' the%efo%e' is that the chec2 >as issue/ b& La&a onl& as P%o,incial
T%easu%e% an/ as an official of the Go,e%n5ent >hich >as un/e% obli4ation to p%o,i/e the
USA$$E >ith a/,ance fun/s' an/ not b& the Philippine National Ban2 >hich has no such
obli4ation. The ,e%& Anne3 C' 5a/e pa%t of plaintiffCs co5plaint' an/ late% int%o/uce/ in
e,i/ence fo% hi5 as E3hibit E states that La&a issue/ the chec2 Ein his capacit& as
P%o,incial T%easu%e% of Misa5is O%ientalE' ob,iousl&' not as a4ent of the Ban2.
No>' /i/ M. =. Ra5os a// o% place those >o%/s belo> the si4natu%e of La&a befo%e
t%ansfe%%in4 the chec2 to MontinolaJ Let us bea% in 5in/ that Ra5os befo%e his in/uction
into the USA$$E ha/ been >o%2in4 as assistant of T%easu%e% La&a as e3-officio a4ent of
the Misa5is O%iental b%anch of the Philippine National Ban2. Natu%all&' Ra5os 5ust
ha,e 2no>n the p%oce/u%e follo>e/ the%e as to the issuance of chec2s' na5el&' that >hen
a chec2 is issue/ b& the P%o,incial T%easu%e% as such' it is counte%si4ne/ b& the P%o,incial
Au/ito% as >as /one on the chec2 AE3hibit AB' but that if the P%o,incial T%easu%e% issues a
chec2 as a4ent of the Philippine National Ban2' the chec2 is counte%si4ne/ not b& the
P%o,incial Au/ito% >ho has nothin4 to /o >ith the ban2' but b& the ban2 cashie%' >hich
>as not /one in this case. *t is not li2el&' the%efo%e' that Ra5os ha/ 5a/e the inse%tion of
the >o%/s EA4ent' Phil. National Ban2E afte% he %ecei,e/ the chec2' because he shoul/
ha,e %eali@e/ that follo>in4 the p%actice al%ea/& /esc%ibe/' the chec2 ha,in4 been issue/
b& La&a as P%o,incial T%easu%e%' an/ not as a4ent of the ban2' an/ since the chec2 bea%s
the counte%si4natu%e not of the Ban2 cashie% of the P%o,incial Au/ito%' the a//ition of the
>o%/s EA4ent' Phil. National Ban2E coul/ not chan4e the status an/ %esponsibilit& of the
ban2. *t is the%efo%e 5o%e lo4ical to belie,e an/ to fin/ that the a//ition of those >o%/s
>as 5a/e afte% the chec2 ha/ been t%ansfe%%e/ b& Ra5os to Montinola. Mo%eo,e%' the%e
a%e othe% facts an/ ci%cu5stances in,ol,e/ in the case >hich suppo%t this ,ie>. Refe%%in4
to the 5i5eo4%aphe/ %eco%/ on appeal file/ b& the plaintiff-appellant' >e fin/ that in
t%ansc%ibin4 an/ cop&in4 the chec2' pa%ticula%l& the face of it AE3hibit AB in the
co5plaint' the >o%/s EA4ent' Phil. National Ban2E no> appea%in4 on the face of the
chec2 un/e% the si4natu%e of the P%o,incial T%easu%e%' is 5issin4. Unless the plaintiff in
5a2in4 this cop& o% t%ansc%iption in the co5plaint co55itte/ a se%ious o5ission >hich is
/ecisi,e as fa% as the ban2 is conce%ne/' the infe%ence is' that at the ti5e the co5plaint
>as file/' sai/ ph%ase /i/ not appea% on the face of the chec2. That p%obabl& >as the
%eason >h& the ban2 in its 5otion to /is5iss /ate/ Septe5be% ' #(89' conten/e/ that if
the chec2 in :uestion ha/ been issue/ b& the p%o,incial t%easu%e% in his capacit& as a4ent
of the Philippine National Ban2' sai/ t%easu%e% >oul/ ha,e place/ belo> his si4natu%e the
>o%/s EA4ent of the Philippine National Ban2E. The plaintiff because of the alle4e/ loss
of the chec2' alle4e/l& attache/ to the co5plaint a photostatic cop& of sai/ chec2 an/
5a%2e/ it as Anne3 A. But in t%ansc%ibin4 an/ cop&in4 sai/ Anne3 A in his co5plaint' the
ph%ase EA4ent' Phil. National Ban2E /oes not appea% un/e% the si4natu%e of the p%o,incial
t%easu%e%. Ie t%ie/ to ,e%if& this /isc%epanc& b& 4oin4 o,e% the o%i4inal %eco%/s of the
Cou%t of $i%st *nstance so as to co5pa%e the cop& of Anne3 A in the co5plaint' >ith the
o%i4inal Anne3 A' the photostatic cop&' but sai/ o%i4inal Anne3 A appea%s to be 5issin4
f%o5 the %eco%/. -o> it /isappea%e/ is not e3plaine/. Of cou%se' no> >e ha,e in the list
of e3hibit a photostatic cop& 5a%2e/ Anne3 A an/ E3hibit B' but acco%/in4 to the
5anifestation of counsel fo% the plaintiff /ate/ Octobe% #)' #(8!' sai/ photostatic cop&
no> 5a%2e/ Anne3 A an/ E3hibit B >as sub5itte/ on Octobe% #)' #(8!' in co5pliance
>ith the ,e%bal o%/e% of the t%ial cou%t. *t is the%efo%e e,i/ent that the Anne3 A no>
a,ailable is not the sa5e o%i4inal Anne3 A attache/ to the co5plaint in #(89.
The%e is one othe% ci%cu5stance' i5po%tant an/ >o%th nothin4. *f Anne3 A also 5a%2e/
E3hibit B is the photostatic cop& of the o%i4inal chec2 No. #<! pa%ticula%l& the face
the%eof AE3hibit AB' then sai/ photostatic cop& shoul/ be a faithful an/ accu%ate
%ep%o/uction of the chec2' pa%ticula%l& of the ph%ase EA4ent' Phil. National Ban2E no>
appea%in4 un/e% the si4natu%e of the P%o,incial T%easu%e% on the face of the o%i4inal chec2
AE3hibit AB. But a 5inute e3a5ination of an/ co5pa%ison bet>een Anne3 A' the
photostatic cop& also 5a%2e/ E3hibit B an/ the face of the chec2' E3hibit A' especiall&
>ith the ai/ of a han/lens' sho> notable /iffe%ences an/ /isc%epancies. $o% instance' on
E3hibit A' the lette% A of the >o%/ EA4entE is to>a%/ the %i4ht of the tail of the be4innin4
lette% of the si4natu%e of Ubal/o ?. La&aD this sa5e lette% EAE ho>e,e% in E3hibit B is
/i%ectl& un/e% sai/ tail.
The lette% ENE of the >o%/ ENationalE on E3hibit A is un/e%neath the space bet>een
EP%o,incialE an/ ET%easu%e%ED but the sa5e lette% ENE is /i%ectl& un/e% the lette% E*E of the
>o%/ EP%o,incialE in E3hibit B.
The fi%st lette% EaE of the >o%/ ENationalE is un/e% ETE of the >o%/ ET%easu%e%E in E3hibit
AD but the sa5e lette% EaE in E3hibit EBE is 0ust belo> the space bet>een the >o%/s
EP%o,incialE an/ ET%easu%e%E.
The lette% E2E of the >o%/ EBan2E in E3hibit A is afte% the 4%een pe%pen/icula% bo%/e% line
nea% the lo>e% %i4ht han/ co%ne% of the e/4e of the chec2 AE3h. ABD this sa5e lette% E2E
ho>e,e%' on E3hibit B is on the ,e%& bo%/e% line itself o% e,en befo%e sai/ bo%/e% line.
The closin4 pa%enthesis EBE on E3hibit A is a little fa% f%o5 the pe%pen/icula% 4%een bo%/e%
line an/ appea%s to be /ouble instea/ of one sin4le lineD this sa5e EBE on E3hibit B
appea%s in a sin4le line an/ is %elati,el& nea%e% to the bo%/e% line.
The%e a%e othe% notable /isc%epancies bet>een the chec2 Anne3 A an/ the photostatic
cop&' E3hibit B' as %e4a%/s the %elati,e position of the ph%ase EA4ent' Phil. National
Ban2E' >ith the title P%o,incial T%easu%e%' 4i,in4 4%oun/ to the /oubt that E3hibit B is a
photostatic cop& of the chec2 AE3hibit AB.
Ie then ha,e the follo>in4 facts. E3hibit A >as issue/ b& La&a in his capacit& as
P%o,incial T%easu%e% of Misa5is O%iental as /%a>e% on the Philippine National Ban2 as
/%a>ee. Ra5os sol/ P<;';;; of the chec2 to En%i:ue P. Montinola fo% P(;';;; 1apanese
5ilita%& notes' of >hich onl& P8)';;; >as pai/ b& Montinola. The >%itin4 5a/e b&
Ra5os at the bac2 of the chec2 >as an inst%uction to the ban2 to pa& P<;';;; to
Montinola an/ to /eposit the balance to his ARa5osB c%e/it. This >%itin4 >as oblite%ate/
an/ in its place >e no> ha,e the suppose/ in/o%se5ent appea%in4 on the bac2 of the
chec2 AE3h. A-#B.
At the ti5e of the t%ansfe% of this chec2 AE3h. AB to Montinola about the last /a&s of
?ece5be%' #(88' o% the fi%st /a&s of 1anua%&' #(8)' the chec2 >hich' bein4 a ne4otiable
inst%u5ent' >as pa&able on /e5an/' >as lon4 o,e%/ue b& about K &ea%s. *t 5a&
the%efo%e be consi/e%e/' e,en then' a stable chec2. Of cou%se' Montinola clai5s that about
1une' #(88 >hen Ra5os suppose/l& app%oache/ hi5 fo% the pu%pose of ne4otiatin4 the
chec2' he AMontinolaB consulte/ P%esi/ent Ca%5ona of the Philippine National Ban2 >ho
assu%e/ hi5 that the chec2 >as 4oo/ an/ ne4otiable. -o>e,e%' P%esi/ent Ca%5ona on the
>itness stan/ flatl& /enie/ MontinolaCs clai5 an/ assu%e/ the cou%t that the fi%st ti5e that
he sa> Montinola >as afte% the Philippine National Ban2' of >hich he >as P%esi/ent'
%eopene/' afte% libe%ation' a%oun/ Au4ust o% Septe5be%' #(8)' an/ that >hen sho>n the
chec2 he tol/ Montinola that it >as stale. M. =. Ra5os also tol/ the cou%t that it is not
t%ue that he e,e% >ent >ith Montinola to see P%esi/ent Ca%5ona about the chec2 in #(88.
On the basis of the facts abo,e %elate/ the%e a%e se,e%al %easons >h& the co5plaint of
Montinola cannot p%ospe%. The inse%tion of the >o%/s EA4ent' Phil. National Ban2E >hich
con,e%ts the ban2 f%o5 a 5e%e /%a>ee to a /%a>e% an/ the%efo%e chan4es its liabilit&'
constitutes a 5ate%ial alte%ation of the inst%u5ent >ithout the consent of the pa%ties liable
the%eon' an/ so /ischa%4es the inst%u5ent. ASection #8 of the Ne4otiable *nst%u5ents
La>B. The chec2 >as not le4all& ne4otiate/ >ithin the 5eanin4 of the Ne4otiable
*nst%u5ents La>. Section < of the sa5e la> p%o,i/es that Ethe in/o%se5ent 5ust be an
in/o%se5ent of the enti%e inst%u5ent. An in/o%se5ent >hich pu%po%ts to t%ansfe% to the
in/o%see a pa%t onl& of the a5ount pa&able' . . . Aas in this caseB /oes not ope%ate as a
ne4otiation of the inst%u5ent.E Montinola 5a& the%efo%e not be %e4a%/e/ as an in/o%see.
At 5ost he 5a& be %e4a%/e/ as a 5e%e assi4nee of the P<;';;; sol/ to hi5 b& Ra5os' in
>hich case' as such assi4nee' he is sub0ect to all /efenses a,ailable to the /%a>e%
P%o,incial T%easu%e% of Misa5is O%iental an/ a4ainst Ra5os. Neithe% can Montinola be
consi/e%e/ as a hol/e% in /ue cou%se because section ) of sai/ la> /efines a hol/e% in
/ue cou%se as a hol/e% >ho has ta2en the inst%u5ent un/e% ce%tain con/itions' one of
>hich is that he beca5e the hol/e% befo%e it >as o,e%/ue. Ihen Montinola %ecei,e/ the
chec2' it >as lon4 o,e%/ue. An/' Montinola is not e,en a hol/e% because section #(# of
the sa5e la> /efines hol/e% as the pa&ee o% in/o%see of a bill o% note an/ Montinola is not
a pa&ee. Neithe% is he an in/o%see fo% as al%ea/& state/' at 5ost he can be consi/e%e/ onl&
as assi4nee. Neithe% coul/ it be sai/ that he too2 it in 4oo/ faith. As al%ea/& state/' he has
not pai/ the full a5ount of P(;';;; fo% >hich Ra5os sol/ hi5 P<;';;; of the ,alue of
the chec2. *n the secon/ place' as >as state/ b& the t%ial cou%t in its /ecision' Montinola
speculate/ on the chec2 an/ too2 a chance on its bein4 pai/ afte% the >a%. Montinola 5ust
ha,e 2no>n that at the ti5e the chec2 >as issue/ in Ma&' #(8' the 5one& ci%culatin4 in
Min/anao an/ the =isa&as >as onl& the e5e%4enc& notes an/ that the chec2 >as inten/e/
to be pa&able in that cu%%enc&. Also' he shoul/ ha,e 2no>n that a chec2 fo% such a la%4e
a5ount of P#;;';;; coul/ not ha,e been issue/ to Ra5os in his p%i,ate capacit& but
%athe% in his capacit& as /isbu%sin4 office% of the USA$$E' an/ that at the ti5e that
Ra5os sol/ a pa%t of the chec2 to hi5' Ra5os >as no lon4e% connecte/ >ith the
USA$$E but al%ea/& a ci,ilian >ho nee/e/ the 5one& onl& fo% hi5self an/ his fa5il&.
As al%ea/& state/' as a 5e%e assi4nee Montinola is sub0ect to all the /efenses a,ailable
a4ainst assi4no% Ra5os. An/' Ra5os ha/ he %etaine/ the chec2 5a& not no> collect its
,alue because it ha/ been issue/ to hi5 as /isbu%sin4 office%. As obse%,e/ b& the t%ial
cou%t' the chec2 >as issue/ to M. =. Ra5os not as a pe%son but M. =. Ra5os as the
/isbu%sin4 office% of the USA$$E. The%efo%e' he ha/ no %i4ht to in/o%se it pe%sonall& to
plaintiff. *t >as ne4otiate/ in b%each of t%ust' hence he t%ansfe%%e/ nothin4 to the plaintiff.
*n ,ie> of all the fo%e4oin4' fin/in4 no %e,e%sible e%%o% in the /ecision appeale/ f%o5' the
sa5e is he%eb& affi%5e/ >ith costs.
*n the p%a&e% fo% %elief containe/ at the en/ of the b%ief fo% the Philippine National Ban2
/ate/ Septe5be% 9' #(8(' >e fin/ this p%a&e%7
*t is also %espectfull& p%a&e/ that this -ono%able Cou%t %efe% the chec2' E3hibit A' to the
Cit& $iscalCs Office fo% app%op%iate c%i5inal action a4ainst the plaintiff-appellant if the
facts so >a%%ant.
Subse:uentl&' in a petition si4ne/ b& plaintiff-appellant En%i:ue P. Montinola /ate/
$eb%ua%& 9' #();' he as2e/ this Cou%t to allo> hi5 to >ith/%a> the o%i4inal chec2 AE3h.
AB fo% hi5 to 2eep' e3p%essin4 his >illin4ness to sub5it it to the cou%t >hene,e% nee/e/
fo% e3a5ination an/ ,e%ification. The ban2 on Ma%ch ' #(); oppose/ the sai/ petition on
the 4%oun/ that inas5uch as the appellantCs cause of action in this case is base/ on the
sai/ chec2' it is absolutel& necessa%& fo% the cou%t to e3a5ine the o%i4inal in o%/e% to see
the actual alte%ations suppose/l& 5a/e the%eon' an/ that shoul/ this Cou%t 4%ant the
p%a&e% containe/ in the ban2Cs b%ief that the chec2 be late% %efe%%e/ to the cit& fiscal fo%
app%op%iate action' sai/ chec2 5a& no lon4e% be a,ailable if the appellant is allo>e/ to
>ith/%a> sai/ /ocu5ent. *n ,ie> of sai/ opposition this Cou%t %esolution of Ma%ch "'
#();' /enie/ sai/ petition fo% >ith/%a>al.
Actin4 upon the petition containe/ in the ban2Cs b%ief al%ea/& 5entione/' once the
/ecision beco5es final' let the Cle%2 of Cou%t t%ans5it to the cit& fiscal the chec2 AE3h.
AB to4ethe% >ith all pe%tinent pape%s an/ /ocu5ents in this case' fo% an& action he 5a&
/ee5 p%ope% in the p%e5ises.
Mo%an' C.1.' Pa%as' $e%ia' Pablo' Ben4@on' Pa/illa' Tua@on' Re&es an/ Bautista An4elo'
11.' concu%.