BOGNOT VS RRI Traders royal vs Court of Appeals

1. “ Payable to Friters guaranty assurance corporation

1. The delivery of the promissory notes payable to order or
and no one else- this is not a negotiable instrument
bills of exchange or other mercantile documents shall
2. Lacks the words of negotiability- “ payable to Filters
produce the effect of payment only when they have
the registered owner whose name is inscribed
been cased or when through the fault of the creditor
thereon . It lacks the words of negotiability. The
they have been impaired
same is payable to Filters Guaranty Assurance
2. Checks are not legal tender and cannot constitute a valid
Corporation and to no one else- discounting the
tender of payment. Since a negotiable instrument is only
petitioner’s contention that the same is a
a substitute for money and not money, the delivery of
negotiable instrument
such does not operate as payment
3. The language of negotiability which characterize a
3. The cancellation and return of the check – merely
negotiable paper as a credit instrument is its
established his renewal of the loan and not a fact of
freedom to circulate as substitute for money.
payment
Hence, the freedom of negotiability is the
Material alteration issue touchstone relating to the protection of holders in
due course.
1. The superimposition of the date. – failure to rebut the
4. This freedom in negotiability is totally absent in this
statement is tantamount to admission
case- merely acknowledges to pay a sum of money
Nature of petitioner’s liability to a specified person or entity for a period in time

1. The promissory note presented is not admissible as CALTEX VS CA

evidence for being a mere photocopy-
1. IS CTD considered as negotiable instrument?
2. “ I/we jointly and severally” – the obligation is solidary
2. This is to certifify bearer has deposited in this bank the
3. A solidary obligation is one which each of the debtors
sum of Four thousand only sucat security bank office
is liable for the entire obligation and each of the
P4,000 and 0 CTS
creditors is entitled to demand the satisfaction of the
3. The accepted rule is that negotiability or non
whole obligation from any or all of the debtors
negotiability of an instrument is determined from the
4. Gen rule : when the obligation says “ I WE JOINTLY AND
writing that is from the face of the instrument itself
SEVERALLY- the obligation is soldiary but in this case
there was no evidence to prove the same .
 4. In the construction of a bill or note the intention of the
parties is to control when it can be legally ascertained.
5. The CTDs are negotiable instrument- WHO IS THE
DEPOSITOR? THE BEARER. The documents do not say
that the depositor is Angel and that the amounts are to
be repayed specifically to him. The bearer would be the
one in possession of the same .
6. The amounts are to be payable to the bearer of the
documents or for that matter whoever is the bearer at
the time of the presentment
7. An instrument is negotiated when it is transferred from
one person to another in such a manner a to constitute
the transferee the holder thereof= a manner as to
constitute the transferee as a holder thereof and a
holder may be the payee or the indorsee of the bill or
note who is n possession of it or the bearer thereof.
8. Bearer- THOUGH the CTD are bearer instrument a valid
negotiation thereof for the true purpose and
agreement between it and Dela Cruz as ultimately
ascertained requires both delivery and indorsement . –
METROPOLITAN BANK AND TRUST COMPANY VS CA
there is a need a need for delivery and indorsement to
ascertain the true intent of the parties .
SESBRENO VS CA
1. DMC PN NO 2731- THE Security had been issued on 10
April 1980 that it would mature on 6 april 1981 that it
had a face value of P2,300,800.33 with Philfinance as “
payee” and private respondent Delta Motors
Corporation (DELTA) AS THE MAKER, the face of the
promissory note was stamped non negotiable..
2. Negotiation vs assignment
3. Negotiation- only those instrument which is qualified as
negotiable instrument under relevant statute may be
negotiated wither by indorsement thereof coupled with
delivery or by delivery alone when payable to bearer
4. Assignment- a non negotiable instrument may
obviously not be negotiated but it may be assigned or
transferred absent an express prohibition against the
assignment or transfer written at the face of the
instrument
5. “ Not negotiable” – did not destroy its assignability but
the sole effect was to exempt the bill from the
statutory provisory. A bill though non negotiability may
be transferred by assignees
6. While non negotiable- no stipulation which prohibited
Phil finance from assigning or transferring in whole or in
part.
1. TREASURY WARRANTS – are nonnegotiable
instrument stamped on its face is the word
nonnegotiable. Payable from a particular fund.
2. The indication of a fund 5101 as the source of
payment to be made on the treasury warrants
makes the order or promise to pay not
unconditional and the warrants themselves are
nonnegotiable.
 3. Section 3c : but an order or promise to pay out of a
particular fund is not unconditional.\
4. Payable from the appropriation for food
administration is actually an order for payment out
of a particular funds and is not unconditional and
does not fulfill one of the essential requirements of
a negotiable instrument
Firestone tire and court of appeals
1. Banks is under the obligation to treat the accounts of its
depositors with meticulous care whether such accounts
consist only for a few hundred pesos or of million of
pesos- a bank is under obligation to treat the accounts
of its depositors with meticulous care- A BANK IS
ANG TEK LIAN VS CA
UNDER Obligation to treat the accounts on its
depositors with meticulous care, whether such
accounts consist only of a few hundred pesos or of
million of pesos .
2. Essence of negotiability which characterizes a
negotiable paper as credit instrument lies in its
freedom to circulate freely as substite for money
3. In the ordinary and usual course of banking operations,
current account deposits are accepted by thebank on
the basis of deposit slops prepared an dsigned by the
depositros or the latter’s agent or representatives who
indicates therein the current account number to which
the deposit is to bbe credited the name of the
despositor or current account holder, the date of the
deposit and the amoint of deposit either cash or check.
4. The withdrawal slips are not checks- Citibank was not
bound to accept the withdrawal slips as a valid mode of
deposit.
5. The withdrawal slips in question lacked this character
Philippine education co inc vs Soriano
1. Whether postal money order are negotiable
instruments
2. No. Postal money orders are not neogitable
instruments- in establishing and operating a postal
money order system the government is not engaging in
commercial transaction but merely exercises a
government power for the public benefit.
1. Ang Tek Lian drew on Saturday the check Exhibit A upo
the China BANKING corporation or the sum of P4,000
payable to the order of “ cash”. He delivered it to Lee
Hua hong in exchange for money which the latter
handed in the act. On November 18, 1946 the next
business daythe check was dishonored for insufficiency
of funds
2. A negotiable instrument law, a check drawn payable to
the order of “ cash” is a check payable to bearer and
the bank may pay it to the person presenting it for
payment without the drawer’s indorsement
3. “a check payable to the order of cash- bearer
instrument”
 4. “where a check is made payable to the order of cash ,
the word cash does not purport to be the name of any
person. And hence the payable to bearer. The drawee
bank may not need to obtain indorsement but may pay
it to the person presenting it without any indorsement.
5. A check payable to bearer is authority for payment to
the holder. Where a check is in the ordinary form and
payable to bearer so that no indorsement is required a
bank to whichi t presented for payment need not have
the holder identified and is not negligent in failing to do
so.”
PNB VS RODRIGUEZ
1. SPOUSES rodriguez are clients of PNB they maintained a
savings and deposit account with PNB
2. Engaged in a informal lending arrangement-
rediscounting with PEMSLA ( also a client of PNB)
3. Spouses rediscount the check and issue their own if
short of funds
4. PEMSLA policy not to grant loans despite outstanding
debt, PEMSLA scheme obtained loans from
unsuspecting members spouses rediscount the same
5. Rodriguez checks without any indorsement to the
payee was deposited directly to PEMSLA’S account
6. PNB- closed PEMSLA’S account and that the check
deposited to spouses from PEMSLA was dishonored
and the Rodriguez checks were encased.
DOCTRINE
1. As a rule : when the payee is fictitious or not intended to
be the true recipient of the proceeds the checks are to
be considered bearer instrument.
2. General rule a check payable to a specific payee may be
considered as bearer of the [payable to the order pf a
fictitious person
3. The maker did not intent for the payee to in fact
receive the proceeds of the check. If the payee did not
intend recipient of the proceeds of the check the payee
is fictitious.
4. FICTITIOUS PAYEE – in a bearer instrument, PNB (
DRAWEE ) should not bear the loss and that the drawer
bears the loss and not the drawee. Ratio: one cannot
expected to place his indorsement- a fictitious payee
cannot indorse.
5. EXEMPTION: commercial bad faith – a showing of the
commercial bad faith on the part of the drawee bank or
its transferee will work to strip it of this defense.
Commercial bad faith happens when there is
dishonesty and fraud.
6. In this case, the bank failed to show that fictitious payee
exist- AT MOST, the bank’s thesis only shows that the
payee did not have knowledge of the existence of the
check. Failure to show that the payees are fictitious in
its broader sense the fictitious payee rule does not
apply
REPUBLIC VS CA 2. A real estate mortgage was executed by them and
embassy farm
1. Shozo Yamaguchi and Canlas were president and chief
3. Petitioner- alleged that they did not receive any proceeds
operating officer of World Wide Garment
because it all went to embassy harms ( alleged that the
2. B. RESO 1- defendant Yamaguchi was athorized to apply
real estate mortgage is “ void” )
for authorized to apply for a credit facility with planters
4. Questioned the transfer- alleged that he did not receive
bank
any proceeds (innocent purchaser in good faith)
3. ISSUE : I/ WE JOINTLY and severally promise to pay to
5. Mercator argued that embassy farm and petitioner is
the order of planters banl
solidary
4. The name worldwide garment manufacturing was
merely rubber stamped.. DOCTRINE :
5. World Garment changed its name to Pinch
SECTION 17: WHERE an instrument containing the word “ I
MANUFACTURING- canlas ALLEGED THAT he is not
PROMISE to pay is signed by two or more persons they are
liable because he is an employee of World Wide and
deemed to be jointly and severally liable thereon
not Pinch Manufacturing
In this case, “ I we promise to pay”- solidary
DOCTRINE: Yes the promissory note in question are negotiable
instruments and is governed by NIL Even if they merely intend to sign the note merely as officer of
embassy farm they executed a surety agreement- a surety
1. Persons who write their names in the face of promissory
agreement is one solidarily liable with the principal
note promise to pay at the order of the payee or any
holder according to tendor . The consideration necessary to support a surety contract need
2. “ I promise to pay jointly and severally” – in this personal not pass directly to the surety any consideration which moves
capacity- solidary the principal is enough.
3. Assumed solidary liability
4. The corporation is not extinguished by the mere fact of the
change of name. CONSOLIDATED PLYWOOD VS IFC
Sps evangelista vs Mercator 1. PN IS non negotiable – “ we promise to pay to
industrial” .
1. Petitioner filed a case against Mercator alleged that they
2. There are no words of negotiability
are owners of REM executed by them and embassy farm
 3. No words of negotiability, “ to order or bearer is not
present.”
HONGKONG SHANGHAI VS CR
1. HSBC performs custodial service on behalf of its
investors client whether resident or non resident of the
Philippines
2. Collection payment money with respect to dividends
and other income derived from the investor client
investment
3. HSBC manages the same through electronic investment
4. Client will send electric message from abroad
instructing HSBC to debit their local or foreign currency
account and pay the purchase price
5. Hsbc paid documentary stamp tax for the said
transaction BIR issued an instruction or advices from
abroad on management which do not involve fund
transfer abroad
6. The instruction given through electronic messages that
are subjected to DST in these cases ARE NOT
NEGOTIABLE AS THEY DO NOT comply with sec 1
7. The electronic messages are not signed by the investor
clients as supposed drawers of a bill of exchange they
do not contain an unconditional order to pay a sum
certain of money as the payment is supposed to come
from a specific fund or account of the investor clients
8. They are not payable to bearer but to a specifically
designed third party.
9. Emails are not negotiable instruments- THERE WAS NO
BILL OF EXCHANGE OR ORDER FOR THE PAYMENT
DRAWN abroad and made payable here in the
Philippine there could have been no acceptance or
payment that will trigger the imposition of DST under
section 181 tax code.
10. No acceptance on the part of HSBC – not a negotiable
instrument
11. Acceptance- ONLY APPLIES TO BILL OF EXCHANGE. The
acceptance must be in writing signed by the drawee. It
must not express that the drawee will perform his
promise other means than money.
12. “ an act which the drawee manifest his consent to
comply with the request contained in the bill of
exchange directed to him and it contemplates an
engagement or promise to pay. Once the drawee
accepts he becomes the acceptor and engages to pay
the bill of exchange in its tenor.
13. Section 117 of the tax code : the acceptor or acceptors
of any bill of echange or order for the payment pf any
sum of money drawn or purporting to be drawin in any
foreign country but payable here in the Philippines shall
before paying or accepting the same place thereupon
the stamp in payment of the law of tax upon such
documents.
14. Section 132- acceptance of a bill is the signification by
the drawee of gis assent to the order of the drawer- the
acceptance must be in writing signed by the drawee. It
 must not express that the drawee will perform his PNB VS MANILA OIL REFINING
promise by other means than the payment of money
1. The maker authorizes any attorney to appear and
15. There was no acceptance of BOE on the part of HSBC-
confess judgment for the principal.
there was no bill of exchange or order for the payment
2. The manager or treasurer of Manila Oil Refining
drawn abroad made payable here in the Philippines.
executed and delivered to PNB
16. There was no acceptance- the email did not constitute
3. Manila Oil Refining failed to pay the promissory note on
the written and signed manifestation of HSBC to pay
demand
the money drawn abroad
4. Pnb BOUGHT ACTION to CFI to recover
PAY VS VDA PALANCA 5. Atty. Entered into a representation of the defendant
confess judgement
1. George Pay is a creditor of Palanca who died on July 3,
6. “ the entry of judgment is a negotiable instrument but
1963
it cannot be enforced.
2. P NOTE: Justo Palanca and Rose Palanca promised to
7. As stated under the law, prohibition with regard to the
pay George pay
confession of judgment is against public policy
3. George pay is now asking the court that Segundia De
therefore void
PALANCA surviving spouse of Justo that he be
8. Sec 5: The negotiable character of an instrument is not
appointed administratix of a certain property
affected when
4. Segundia De Palanca refused to be appointed as
b. Authorize a confession of judgment if the instrument
ADMINITRATIX and that the property in question did
be not paid at maturity.
not belong to the debtor Justo and the right of the
petitioner had already prescribed. 9. Though section 5 of the negotiable instrument allows the
5. Whether or not the execution has already prescribed authorization of Judgment , though the instrument is negotiable
6. Yes. Every obligation that does not depend on a future , it is not enforceable for begin prohibited by law.
or uncertain event is demandable at once.
7. The obligation being due and demandable it would
appear that the filing of the suit after fifteen tears was
much to late. According to the civil code, the
prescriptive period for the written contract is 10 years.