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Ang tiong vs ting

G.R. No. L-26767 February 22, 1968

Lessons Applicable: General Indorser (Negotiable Instrurments)

Laws Applicable: Section 63 of the Negotiable Instruments Law

FACTS:

August 15, 1960: Loren o !ing issue" #hili$$ine %an& of 'ommunications chec& ()*161*, w+ sum of # ,000, $a-able to .cash or bearer.

/ith eli$e Ang s signature 2in"orsement in blan& at the bac& thereof,the instrument was recei4e" b- the Ang !iong who $resente" it to the "rawee ban&for $a-ment but it was "ishonore"

!ing ma"e a written "eman" to both !ing an" Ang to no a4ailarch 6, 196 : unici$al 'ourt of anila fa4ore" !iong against !ing an" Ang 'A: or"ere" Ang to $a- with interestAng conten"s that he is an accomo"ating in"orser

ISSU : !"N Ang is an accomodating indorser and not a general indorser a

# L$: N%& A''irmed

Section 63 of the Negotiable Instruments Law: a $erson $lacinghis signature u$on an instrument otherwise than as ma&er, "rawer or acce$tor 7a general in"orser, 8 unless he clearl- in"icates $laintiff a$$ro$riate wor"s hisintention to be boun" in some other ca$acit-

warrants:2a that the instrument is genuine an" in all res$ects what it

$ur$orts to be2b that he has a goo" title to it2c that all $rior $arties ha4e ca$acit- to contract an"2" that the instrument is at the time of his in"orsement 4ali" an"

subsisting4en on the assum$tion that the a$$ellant is a mere accommo"ation $art-, as he

$rofesses to be, he is b- the clear man"ate of section 9 of the Negotiable Instruments Law, .liable on the instrument to a hol"er for 4alue,notwithstan"ing that such hol"er at the time of ta&ing the instrument &new him to beonl- an accommo"ation $art-;.

http://www.philippinelegalguide.com/2013/05/jurisprudence-gr-no-l-26767-february-22.html

http://www.philippinelegalguide.com/2013/05/jurisprudence-gr-no-l-26767-february-22.html



It is not a 4ali" "efense that the accommo"ation $art- "i" not recei4e an-4aluable consi"eration when he e<ecute" the instrument;

Nor is it correct to sa- that the hol"er for 4alue is not a hol"er in "uecourse merel- because at the time he ac=uire" the instrument, he &new that the

in"orser was onl- an accommo"ation $art-;assuming him to be an accommo"ation in"orser, ma- obtain securit- from thema&er to $rotect himself against the "anger of insol4enc- of the latter, cannot in an-manner affect his liabilit- to the !iong, as the sai" reme"- is a matter of concerne<clusi4el- between accommo"ation in"orser an" accommo"ate" $art-;

!he liabilit- of the a$$ellant remains $rimar- an" uncon"itional;



[G.R. No. 141278. March 23, 2004]

MICHAEL A. OSMEÑA, petitioner, vs. CITI AN!, N.A., ASSOCIATE" AN! a#$ %RAN!TAN, respondents .

" E C I S I O N

CALLE&O, SR.,J .'

T is is a petition 'or re iew on certiorari under *ule +, o' t e *ules o' Court- as amended- o' t e $ecision ./0 o' t e Court o' Appeals in CA1G&*& C2 No& +3,43 w ic a''irmed in toto t e$ecision .40 o' t e *egional Trial Court o' 5a6ati Cit7- 8ranc 9 - in Ci il Case No& 3/1,9 &

As culled 'rom t e records- t e appeal at benc stemmed 'rom t e 'ollowing 'actualbac6drop:

%n Februar7 44- /33/- t e petitioner 'iled wit t e *egional Trial Court o' 5a6ati an action'or damages against t e respondents Citiban6- N&A& and Associated 8an6& .90 T e case was

doc6eted as Ci il Case No& 3/1,9 & T e complaint materiall7 alleged t at- on or about August 4,-/3 3- t e petitioner purc ased 'rom t e Citiban6 5anager;s C ec6 No& 4<1</,9</ (t e c ec6 'or bre it7) in t e amount o' =/-,+,-<<< pa7able to respondent Fran6 Tan> t e petitioner later recei ed in'ormation t at t e a'oresaid manager;s c ec6 was deposited wit t e respondent

Associated 8an6- *osario 8ranc - to t e account o' a certain ?ulius $i@on under Sa ings AccountNo& /3 > t e clearing and"or pa7ment b7 t e respondents o' t e c ec6 to an improper part7 andt e absence o' an7 indorsement b7 t e pa7ee t ereo'- respondent Fran6 Tan- is a clear iolationo' t e respondents; obligations under t e Negotiable Instruments Law and standard ban6ingpractice> considering t at t e petitioner;s intended pa7ee 'or t e c ec6- t e respondent Fran6Tan- did not recei e t e alue t ereo'- t e petitioner demanded 'rom t e respondents Citiban6and t e Associated 8an6 t e pa7ment or reimbursement o' t e alue o' t e c ec6> t erespondents- owe er- obstinatel7 re'used to eed is repeated demands 'or pa7ment and"or reimbursement o' t e amount o' t e c ec6> ence- t e petitioner was compelled to 'ile t iscomplaint pra7ing 'or t e restitution o' t e amount o' t e c ec6- and 'or moral damages andattorne7;s 'ees&

%n ?une / - /33/- t e petitioner- wit lea e o' court- ' iled an AmendedComplaint .+0 impleading Fran6 Tan as an additional de'endant& T e petitioner a erred t erein t att e c ec6 was purc ased b7 im as a demand loan to respondent Fran6 Tan& Since apparentl7respondent Fran6 Tan did not recei e t e proceeds o' t e c ec6- t e petitioner mig t a e norig t to collect 'rom respondent Fran6 Tan and is conseBuentl7 le't wit no recourse but to see6pa7ment or reimbursement 'rom eit er or bot respondents Citiban6 and"or Associated 8an6&

In its answer to t e amended complaint- .,0 t e respondent Associated 8an6 alleged t at t epetitioner was not t e real part71in1interest but respondent Fran6 Tan w o was t e pa7ee o' t ec ec6& T e respondent also maintained t at t e c ec6 was deposited to t e account o' respondent Fran6 Tan- a&6&a& ?ulius $i@on- t roug its A7ala #ead %''ice and was credited to t esa ings account o' ?ulius $i@on> t e A7ala o''ice con'irmed wit t e *osario 8ranc t at t eaccount o' ?ulius $i@on is also in realit7 t at o' respondent Fran6 Tan> it ne er committed an7iolation o' its duties and responsibilities as t e proceeds o' t e c ec6 went and was credited torespondent Fran6 Tan- a&6&a& ?ulius $i@on> t e petitioner;s a''irmati e allegation o' non1pa7mentto t e pa7ee is sel'1ser ing> as suc - t e petitioner;s claim 'or damages is baseless- un'oundedand wit out legal basis&

%n t e ot er and- t e respondent Citiban6- in answer to t e amended complaint- . 0 allegedt at t e pa7ment o' t e c ec6 was made b7 it in due course and in t e eDercise o' its regular ban6ing 'unction& Since a manager;s c ec6 is normall7 purc ased in 'a or o' a t ird part7- t e

http://sc.judiciary.gov.ph/jurisprudence/2004/mar2004/141278.htm#_ftn1
















identit7 o' w om in most cases is un6nown to t e issuing ban6- its onl7 responsibilit7 w en pa7ingt e c ec6 was to eDamine t e genuineness o' t e c ec6& It ad no wa7 o' ascertaining t egenuineness o' t e signature o' t e pa7ee respondent Fran6 Tan w o was a total stranger to it& I' at all- t e petitioner ad a cause o' action onl7 against t e respondent Associated 8an6 w ic - asdepositor7 or collecting ban6- was obliged to ma6e sure t at t e c ec6 in Buestion was properl7endorsed b7 t e pa7ee& It is not eDpected o' t e respondent Citiban6 to ascertain t egenuineness o' t e indorsement o' t e pa7ee or e en t e lac6 o' indorsement b7 im- mostespeciall7 w en t e c ec6 was presented 'or pa7ment wit t e respondent Associated 8an6;sguaranteeing all prior indorsements or lac6 t ereo'&

%n 5arc / - /334- t e trial court declared Fran6 Tan in de'ault 'or 'ailure to 'ile is answer&. 0 %n ?une /<- /334- t e pre1trial con'erence was concluded wit out t e parties reac ing anamicable settlement& . 0 #ence- trial on t e merits ensued&

A'ter e aluating t e e idence adduced b7 t e parties- t e trial court resol ed t at t epreponderance o' e idence supports t e claim o' t e petitioner as against respondent Fran6 Tanonl7 but not against respondents 8an6s& #ence- on Februar7 4/- /33,- t e trial court rendered

Eudgment in 'a or o' t e petitioner and against respondent Fran6 Tan& T e complaints against t erespondents 8an6s were dismissed& T e dispositi e portion o' t e decision reads:

/> ? @? , u"gment is hereb- ren"ere" as follows :

1; @r"ering "efen"ant ran& !an to $a- $laintiff ichael @smeBa the amount of @ne illion i4e>un"re" ort-) i4e !housan" 2#1,5 5,000;00 #esos, #hili$$ine 'urrenc-, with interest thereon at 1 C

$er annum from Danuar- 1990, "ate of e<tra) u"icial "eman" until the full amount is $ai"

; Eismissing the com$laint against "efen"ants 'itiban& an" Associate" %an&

3; Eismissing the counter)claims an" the cross)claim of 'itiban& against Associate" %an& for lac& ofmerit;

/ith costs against "efen"ant ran& !an; F9G

T e petitioner appealed t e decision- ./<0 w ile respondent Fran6 Tan did not& %n No ember 4 - /333- t e appellate court rendered Eudgment a''irming in toto t e decision o' t e trialcourt& Aggrie ed- t e petitioner assailed t e decision in is petition at bar&

T e petitioner contends t at:

I& * S=%N$ NT C%U*T ** $ IN N%T #%L$ING CITI8AN AN$ ASS%CIAT$8AN LIA8L T% = TITI%N * F%* T# NCAS#5 NT %F CITI8AN5ANAG *;S C# C N%& 4<</,9</ 8 ?ULIUS $IH%N&

II& * S=%N$ NT C%U*T ** $ IN #%L$ING T#AT F*AN TAN AN$ ?ULIUS$IH%N A* %N AN$ T# SA5 = *S%N&

III& T# I$ NTIT %F F*AN TAN AS ?ULIUS $IH%N !AS N%!N %NL T%

ASS%CIAT $ 8AN AN$ !AS N%T 8IN$ING %N = TITI%N *&.//0

T e petition is denied&

T e petitioner asserts t at t e c ec6 was pa7able to t e order o' respondent Tan& #owe er-t e respondent Associated 8an6 ordered t e c ec6 to be deposited to t e account o' one ?ulius$i@on- alt oug t e c ec6 was not endorsed b7 respondent Tan& As ?ulius $i@on was not aolder o' t e c ec6 in due course- e could not alidl7 negotiate t e c ec6& T e latter was note en a trans'eree in due course because respondent Tan- t e pa7ee- did not endorse t e saidc ec6& T e position o' t e respondent 8an6 is a6in to t at o' a ban6 accepting a c ec6 'or deposit w erein t e signature o' t e pa7ee or endorsee as been 'orged&















T e contention o' t e petitioner does not old water&

T e 'act o' t e matter is t at t e c ec6 was endorsed b7 ?ulius $i@onJ and was depositedand credited to Sa ings Account No& /3 wit t e respondent Associated 8an6& 8ut t ee idence on record s ows t at t e said account was in t e name o' Fran6 Tan Guan Leng- w icis t e C inese name o' t e respondent Fran6 Tan- w o also uses t e alias ?ulius $i@on&J Ascorrectl7 ruled b7 t e Court o' Appeals:

@n the other han", Associate" satisfactoril- $ro4e" that !an is using an" is also &nown b- his alias of DuliusEi on; >e signe" the Agreement On Bills Purchased 2 <h; H1 an" Continuing Suretyship

Agreement 2 <h; H both ac&nowle"ge" on Danuar- 16, 19*9, where his full name is state" to be H ?AN(!an Juan Leng 2a&a DKLIKS EI @N ; <h; H1 also refers to his HAccount No; SAM19* , the 4er-same account to which the #1,5 5,000;00 from the managerOs chec& was "e$osite"; @smeBa countere"that such use of an alias is illegal; !hat is but an irrele4ant casuistr- that "oes not "etract from the fact thatthe $a-ee !an as Dulius Ei on has encashe" an" "e$osite" the #1,5 5,000;00 ;F1 G

T e respondent Associated 8an6 presented preponderant e idence to support its assertiont at respondent Tan- t e pa7ee o' t e c ec6- did recei e t e proceeds o' t e c ec6& It adducede idence t at ?ulius $i@onJ and Fran6 TanJ are one and t e same person& *espondent Tan wasa regular and trusted client or depositor o' t e respondent Associated 8an6 in its branc at*osario- 8inondo- 5anila& As suc - respondent Tan was allowed to maintain two (4) sa ingsaccounts t erein &./90 T e 'irst is Sa ings Account No& 4</ /19 under is name Fran6 Tan&J ./+0 T eot er is Sa ings Account No& /3 under is assumed Filipino name ?ulius $i@on-J ./,0 to w icaccount t e c ec6 was deposited in t e instant case& 8ot witnesses 'or t e respondent

Associated 8an6- %scar Luna (signature eri'ier) and Lu@ Lagrimas (new accounts cler6)- testi'iedt at respondent Tan was using t e alias ?ulius $i@on-J and t at bot names re'erred to one andt e same person- as Fran6 Tan imsel' regularl7 transacted business at t e ban6 under botnames& ./ 0 T is is also e idenced b7 t e Agreement on 8ills =urc asedJ ./ 0 and t e ContinuingSuret7s ip AgreementJ ./ 0 eDecuted between Fran6 Tan and t e respondent Associated 8an6 on?anuar7 / - /3 3& Fran6 Tan;s name appears in said document as F*AN TAN GUAN L NG(a&6&a& ?ULIUS $IH%N)&./30 T e same documentar7 e idence also made re'erence to Sa ings

Account No& /3 - .4<0 t e er7 same account to w ic t e c ec6 was deposited and t eentire =/-,+,-<<< was credited& Additionall7- Citiban6 C ec6 No& < , /9 .4/0 w ic was presented

b7 t e petitioner to pro e one o' t e loans pre iousl7 eDtended to respondent Tan s owed t at t eendorsement o' respondent Tan at t e dorsal side t ereo' .440 is stri6ingl7 similar to t e signatureso' Fran6 TanJ appearing in said agreements&

87 see6ing to reco er t e loan 'rom respondent Tan- t e petitioner admitted t at respondentTan recei ed t e amount o' t e c ec6& T is appre ension was not wit out an7 basis at all- 'or a'ter t e petitioner attempted to communicate wit respondent Tan on ?anuar7 or Februar7 /33<-demanding pa7ment 'or t e loan- respondent Tan became elusi e o' t e petitioner& .490 As a matter o' 'act- respondent Tan did not 'ile is answer to t e amended complaint and was ne er seen or eard o' b7 t e petitioner& .4+0 8esides- i' it were reall7 a 'act t at respondent Tan did not recei et e proceeds o' t e c ec6- e could imsel' a e initiated t e instant complaint againstrespondents 8an6s- or in t e remotest possibilit7- Eoined t e petitioner in pursuing t e instantclaim&

T e petitioner initiall7 soug t to reco er 'rom t e respondents 8an6s t e amounto' =/-,+,-<<< corresponding to t e loan obtained b7 respondent Tan 'rom im- ob iousl7because respondent Tan ad no intent to pa7 t e amount& T e petitioner alleges t at t erespondents 8an6s were negligent in pa7ing t e amount to a certain ?ulius $i@on- in relation tot e pertinent pro isions o' t e Negotiable Instruments Law- wit out t e proper indorsement o' t epa7ee- Fran6 Tan& T e petitioner cites t e ruling o' t e Court in Associated Bank v. Court of

Appeals -.4,0 in w ic we outlined t e respecti e responsibilities and liabilities o' a drawee ban6-suc as t e respondent Citiban6- and a collecting ban6- suc as t e de'endant Associated 8an6-in t e e ent t at pa7ment o' a c ec6 to a person not designated as t e pa7ee- or w o is not aolder in due course- ad been made& #owe er- t e ruling o' t e Court t erein does not appl7 to








































t e present case 'or- as as been ampl7 demonstrated- t e petitioner 'ailed to establis t at t eproceeds o' t e c ec6 was indeed wrong'ull7 paid b7 t e respondents 8an6s to a person ot er t an t e intended pa7ee& In addition- t e Negotiable Instruments Law was enacted 'or t epurpose o' 'acilitating- not indering or ampering transactions in commercial paper& T us- t esaid statute s ould not be tampered wit ap a@ardl7 or lig tl7& Nor s ould it be brus ed aside inorder to meet t e necessities in a single case& .4 0

5oreo er- t e c ain o' e ents 'ollowing t e purported deli er7 o' t e c ec6 to respondentTan renders e en more dubious t e petitioner;s claim t at respondent Tan ad not recei ed t eproceeds o' t e c ec6& T us- t e petitioner ne er bot ered to 'ind out 'rom t e said respondentw et er t e latter recei ed t e c ec6 'rom is messenger& And i' it were to be supposed t atrespondent Tan did not recei e t e c ec6- gi en t at is need 'or t e mone7 was urgent- it strainscredulit7 t at respondent Tan ne er e en made an e''ort to get in touc wit t e petitioner toin'orm t e latter t at e did not recei e t e c ec6 as agreed upon- and to inBuire w 7 t e c ec6ad not been deli ered to im& T e petitioner and respondent Tan saw eac ot er during socialgat erings but t e7 ne er too6 t e c ance to discuss details on t e loan or t e c ec6& .4 0 T eir actuations are not t ose to be usuall7 eDpected o' 'riends o' /, 7ears w o- as t e petitioner wouldwant to impress upon t is Court- were transacting business on t e basis o' con'idence& .4 0 In 'act-t e 'irst time t at t e petitioner attempted to communicate wit respondent Tan was on ?anuar7 or Februar7 /33<- almost 'i e or siD mont s a'ter t e eDpected deli er7 o' t e c ec6- 'or t e purpose

o' demanding pa7ment 'or t e loan& And it was onl7 on t at occasion t at respondent Tan- as t epetitioner insinuates- in'ormed im t at e (Fran6 Tan) ad not recei ed t e proceeds o' t ec ec6 and re'used to pa7 is loan& .430 All told- t e petitioner;s allegation t at respondent Tan didnot recei e t e proceeds o' t e c ec6 .9<0 is belied b7 t e e idence on record and attendantcircumstances&

Con ersel7- t e records would disclose t at e en t e petitioner imsel' ad misgi ings aboutt e trut 'ulness o' is allegation t at respondent Tan did not recei e t e amount o' t ec ec6& T is is made implicit b7 respondent Tan;s being made a part71de'endant to t e case w ent e petitioner 'iled is amended complaint& In is memorandum in t e case below- t e petitioner a erred inter alia t at:

!he amount of #1,5 5,000;00 is sought to be reco4ere" from:

1; ran& !an for his failure to $a- the loan e<ten"e" b- $laintiff an"

; Associate" %an& an" 'itiban& for ha4ing acce$te" for "e$osit an"+or $ai" the 'itiban& managerOs chec& "es$ite the absence of an- signature+en"orsement b- the name" $a-ee, ran& !an;

T e claim o' t e petitioner t at respondent Tan;s use o' an alias is illegal does not detract aw it 'rom t e 'act t at respondent Tan ad been credited b7 t e respondent Associated 8an6 'or t e amount o' t e c ec6& *espondent Tan did not appeal t e decision o' t e *TC&

IN LIGHT O% ALL THE %OREGOING, t e petition is $ NI $& T e $ecision datedNo ember 4 - /333 o' t e Court o' Appeals in CA1G&*& C2 No& +3,43 is ereb7

AFFI*5 $& Costs against t e petitioner&

SO OR"ERE".














METRO(OLITAN AN! ). CA1*4 SCRA 1+*

%ACTS'Gomez opened an account with Golden Savings bank and deposited 38 treasurywarrants. All these warrants were indorsed by the cashier of Golden Savings, anddeposited it to the savings account in a Metrobank branch. They were sent later on forclearing by the branch office to the principal office of Metrobank, which forwarded themto the Bureau of Treasury for special clearing. On persistent inquiries on whether thewarrants h ave been cleared, the branch manager allowed withdrawal of the warrants, only tond out later on that the treasury warrants have been

dishonored.

HEL"'The treasury warrants were not negotiable instruments. Clearly, it is indicated that it wasnon-negotiable and of equal signicance is the indication that they are payable from aparticular fund, Fund 501. This indication as the source of payment to be made on thetreasury warrantmakes the promise to pay conditional and the warrants themselves non-negotiable.

Metrobank then cannot contend that by indorsing the w arrants i n general, GS assumed that theywere genuine and in all respects w hat they purport it to be, in accordance to Section 66 of theNIL. T he simple reason is that the law isn’t ap plicable to the non-negotiable treasurywarrants. Theindorsement was made for the purpose of merely depositing them with Metrobank forclearing. It was in fact Metrobank which stamped on the back of the warrants: “All priorindorsements and /or lack of endorsements gua ranteed…”



Garc a -. Lac / aG&*& L1+< No ember 43- /3,/Ponente: Paras, C.J.

Facts:/& T e CA disallowed t e probate o' t e will o' Antero 5ercado dated ?an /3+9& T e said willwas written in Ilocano dialect&

4& T e will appears to a e been signed b7 Att7& Florentino ?a ier w o wrote t e name o' t etestator 'ollowed below b7 KA ruego del testadorK and t e name o' Florentino ?a ier& In e''ect-it was signed b7 anot er alt oug under t e eDpress direction o' t e testator& T is 'actowe er was not recited in t e attestation clause& 5ercado also a''iDed a cross on t e will&

9& T e lower court admitted t e will to probate but t is order was re ersed b7 t e Court o' Appeals on t e ground t at t e attestation 'ailed to recite t e 'acts surrounding t e signing o' t e testator and t e witnesses&

I /' h/ h/r or #o h/ a / a o# c a / # h/ -a $

# L$: N% t e attestation is 'atall7 de'ecti e 'or its 'ailure to state t at Antero or t e testator caused Att7& ?a ier to write t e 'ormerKs name under is eDpress direction as reBuired b7Sec& / o' t e Ci il =rocedure& Finall7- on t e cross a''iDed on t e will b7 t e testator- t eCourt eld t at it is not prepared to li6en t e mere sign o' a cross to a t umbmar6 'or ob iousreasons1 t e cross does not a e t e trustwort iness o' a t umbmar6 so it is not consideredas a alid signature&



G.R. No. L540+7 No-/6 /r 2*, 1* 1

I# h/ Ma /r o9 h/ o9 ANTERO MERCA"O, $/c/a /$. ROSARIOGARCIA, petitioner-s&&:LIANA LAC:ESTA, ET AL., respondents&

Elviro L. Peralta and Hermenegildo A. Prieto for petitioner.Faustino B. o!ia, Juan ". "nes and Federico acason for respondents.

(ARAS, C.J.:

T is is an appeal 'rom a decision o' t e Court o' Appeals disallowing t e will o' Antero5ercado dated ?anuar7 9- /3+9& T e will is written in t e Ilocano dialect and contains t e'ollowing attestation clause:

!e- t e undersigned- b7 t ese presents to declare t at t e 'oregoing testament o' Antero 5ercado was signed b7 imsel' and also b7 us below is name and o' t isattestation clause and t at o' t e le't margin o' t e t ree pages t ereo'& =age t reet e continuation o' t is attestation clause> t is will is written in Ilocano dialect w ic isspo6en and understood b7 t e testator- and it bears t e corresponding number inletter w ic compose o' t ree pages and all t em were signed in t e presence o' t etestator and witnesses- and t e witnesses in t e presence o' t e testator and all andeac and e er7 one o' us witnesses&

In testimon7- w ereo'- we sign t is statement- t is t e t ird da7 o' ?anuar7- onet ousand nine undred 'ort7 t ree- (/3+9) A&$&

(Sgd&) NU5 *IAN% 2ANG LISTA (Sgd&) *%S N$A C%*T S

(Sgd&) 8I8IANA ILL GI8L

T e will appears to a e been signed b7 Att7& Florentino ?a ier w o wrote t e name o' Antero 5ercado- 'ollowed below b7 A reugo del testator and t e name o' Florentino ?a ier& Antero 5ercado is alleged to a e written a cross immediatel7 a'ter is name& T e Court o' Appeals- re ersing t e Eudgement o' t e Court o' First Instance o' Ilocos Norte- ruled t at t eattestation clause 'ailed (/) to certi'7 t at t e will was signed on all t e le't margins o' t et ree pages and at t e end o' t e will b7 Att7& Florentino ?a ier at t e eDpress reBuest o' t e



testator in t e presence o' t e testator and eac and e er7 one o' t e witnesses> (4) tocerti'7 t at a'ter t e signing o' t e name o' t e testator b7 Att7& ?a ier at t e 'ormerKs reBuestsaid testator as written a cross at t e end o' is name and on t e le't margin o' t e t reepages o' w ic t e will consists and at t e end t ereo'> (9) to certi'7 t at t e t ree witnessessigned t e will in all t e pages t ereon in t e presence o' t e testator and o' eac ot er&

In our opinion- t e attestation clause is 'atall7 de'ecti e 'or 'ailing to state t at Antero5ercado caused Att7& Florentino ?a ier to write t e testatorKs name under is eDpressdirection- as reBuired b7 section / o' t e Code o' Ci il =rocedure& T e erein petitioner(w o is appealing b7 wa7 o' certiorari 'rom t e decision o' t e Court o' Appeals) argues-owe er- t at t ere is no need 'or suc recital because t e cross written b7 t e testator a'teris name is a su''icient signature and t e signature o' Att7& Florentino ?a ier is a surplusage&=etitionerKs t eor7 is t at t e cross is as muc a signature as a t umbmar6- t e latter a ingbeen eld su''icient b7 t is Court in t e cases o' $e Gala vs. Gon@ales and %na- ,9 = il&-/<+> $olar vs. $iancin- ,, = il&- + 3> =a7ad vs. Tolentino- 4 = il&- + > Ne7ra vs. Ne7ra- = il&- 43 and Lope@ vs. Liboro- / = il&- +43&

It is not ere pretended t at t e cross appearing on t e will is t e usual signature o' Antero

5ercado or e en one o' t e wa7s b7 w ic e signed is name& A'ter mature re'lection- weare not prepared to li6en t e mere sign o' t e cross to a t umbmar6- and t e reason isob ious& T e cross cannot and does not a e t e trustwort iness o' a t umbmar6&

! at as been said ma6es it unnecessar7 'or us to determine t ere is a su''icient recital int e attestation clause as to t e signing o' t e will b7 t e testator in t e presence o' t ewitnesses- and b7 t e latter in t e presence o' t e testator and o' eac ot er&

! ere'ore- t e appealed decision is ereb7 a''irmed- wit against t e petitioner& So ordered&



G.R. No. L5718 A ; 31, 1*

REHA ILITATION %INANCE COR(ORATION, petitioner-s&CO:RT O% A((EALS a#$ REALT< IN)ESTMENTS, INC., respondents&

#i$to de la Costa and Jose %. &arcia for petitioner.Juan . C'uidian for respondents.

RE<ES, A., J. '

%n ?une / - /3+ - $el'in $omingue@ signed a contract wit *ealt7 In estments- Inc&- topurc ase a registered lot belonging to t e latter- ma6ing a down pa7ment o' =93&3 andpromising to pa7 t e balance o' t e stipulated price in //3 mont l7 installments& Some t reemont s t erea'ter- to 'inance t e impro ement o' a ouse $omingue@ ad built on t e lot o'*e abilitation Finance CorporationM erea'ter called t e *FCMagreed to loan im =/<-<<<on t e securit7 o' a mortgage upon said ouse and lot- and- at is instance- wrote *ealt7

In estments a letter- dated September / - /3+ - reBuesting t at t e necessar7 documents'or t e trans'er o' title o' t e endee be eDecuted so t at t e same could be registeredtoget er wit mortgage- t is wit t e assurance t at as soon as title to t e lot ad beenissued in t e name o' $omingue@ and t e mortgage in 'a or o' t e *FC registered as 'irstlien on t e lot and t e building t ereon- t e *FC would pa7 *ealt7 In estments t e balanceo' t e purc ase price o' t e lot in t e amount o' =9-< &3 & Compl7ing wit *FCKs reBuestand rel7ing on its assurance o' pa7ment- *ealt7 In estments- on t e 4<t o' t at samemont - deeded o er t e lot to $omingue@ 'ree o' all liens and incumbrances and t erea'tert e mortgage deed- w ic $omingue@ ad eDecuted in 'a or o' *FC t ree da7s be'ore- wasrecorded in t e *egistr7 o' $eeds 'or t e Cit7 o' 5anila as 'irst lien on t e lot and t e buildingt ereon&

It would appear t at once t e mortgage was registered- t e *FC let $omingue@ a e = -,<<out o' t e proceeds o' is loan- but t at t e remainder o' t e loan was ne er releasedbecause $omingue@ de'aulted in t e pa7ment o' t e amorti@ations due on t e amount ead alread7 recei ed- and as a conseBuence t e *FC 'oreclosed t e mortgage- boug t t emortgaged propert7 in t e 'oreclosure sale- and obtained title t ereto upon 'ailure o' t emortgagor to eDercise is rig t o' redemption&

*eBuired to ma6e good its promise to pa7 *ealt7 In estments t e balance o' t e purc aseprice o' t e lot- t e *FC re'used- and so *ealt7 In estments commenced t e present action



in t e Court o' First Instance o' 5anila 'or t e reco er7 o' t e said balance 'rom eit er $el'in$omingue@ or t e *FC&

T e trial court allowed reco er7 'rom $omingue@- but absol ed t e *FC 'rom t e complaint&8ut on appeal- t e Court o' Appeals re ersed t at erdict- declared t e Eudgment against$omingue@ oid 'or a ing been rendered a'ter is eDclusion 'rom t e case- and sentenced

t e *FC to pa7 plainti'' t e amount claimed toget er wit interests and costs& From t is Eudgment t e *FC as appealed to t is Court&

!e 'ind no merit in t e appeal& ! ile t e amount soug t to be reco ered b7 plainti'' wasoriginall7 owing 'rom $omingue@- being t e balance o' t e purc ase price o' t e lot e adagreed to bu7- t e obligation o' pa7ing it to plainti'' as alread7 been assumed b7 t e *FCwit no ot er condition t an t at title to t e lot be 'irst con e7ed to $omingue@ and *FCKsmortgage lien t ereon registered- and t at condition as alread7 been 'ul'illed&

It is- owe er- contended 'or t e *FC t at its obligation to pa7 as been modi'ied- i' noteDtinguis ed b7 plainti''Ks letter o' September 4<- /3+ - w ic reads as 'ollows:

#eptem!er (), *+ -

T e *& F& C&5anila

SI*S:

In connection wit 7our guarantee to pa7 us t e balance o' =9-< &3 o' t e accounto' 5r& $el'in $omingue@ 'or t e purc ase o' lot No& /,- bloc6 o' our *i ersideSubdi ision- w ic lot as been con e7ed to im on t e strengt o' 7our guarant7 tous t e said balance- we want to in'orm 7ou t at- at t e reBuest o' 5r& $omingue@- weare agreeable to a e t at amount paid us at t e second release o' proceeds o' is

loan- w ic e in'orms us will be on or about %ctober /,- /3+ &

ours trul7-

* ALT IN2 ST5 NTS- INC&C& 5& #%NS INS C%&- INC& %anaging Agents

87: (Sgd&) A& 8& ABuino President

=assing upon t e abo e contention- t e Court o' Appeals sa7s: As narrated in t e statemento' t e case- bot $omingue@ and t e appellee 6ept appellant ignorant on t e terms andconditions o' t eir agreement concerning t e loan o' =/<-<<< and o' t e manner t at sumwas to be released- and in suc circumstances plainti''Ks letter o' September 4<- /3+ -cannot be construed in t e manner contended b7 appellee and sustained b7 t e court- 'orplainti'' merel7 said in substance and e''ect t at it was agreeable to a e t e balance o'=9-< &3 o' t e account o' $el'in $omingue@ paid to it Kat t e second release o' proceeds o' is loan- w ic e ($omingue@) informs us ill !e on or a!out %ctober /,- /3+ &K $e'endant1appellee s ould 6now t at it would be absurd 'or t e plainti'' to wai e appelleeKs guarant7



contained in its letter o' September / - /3+ - w erein Go ernor & aldama bound t e*e abilitation Finance Corporation to pa7 t e unpaid balance o' t e purc ase price o' t e lotin Buestion a'ter title t ereo' was trans'erred in t e name o' $omingue@ 'ree 'rom an7incumbrance& I' t e *e abilitation Finance Corporation was not to ma6e an7 'urt er releaseo' 'unds on t e loan- or i' suc release was to be subEect to 'uture de elopments- it was t edut7 o' t e *e abilitation Finance Corporation to answer t e latterKs letter o' September 4<-

/3+ - and to in'orm appellant o' t e terms and conditions o' t e loan- but t e o''icers o' t eappellee 'ailed to do t is& For t is reason- appelleeKs contention in t is respect is most un'airand cannot be up eld b7 t e courts o' Eustice& It was t e *e abilitation Finance Corporationt at induced plainti'' to issue title to t e lot 'ree 'rom all encumbrances to $omingue@ on itsguarant7- and it cannot now wit out an7 'ault o' t e plainti'' 6eep t e lot in Buestion and$omingue@K building wit out pa7ing an7t ing to t e plainti''& Under t e circumstance o' t ecase- appellant was not under an7 obligation o' assuming $omingue@K rig t o' redemption o't e propert7 'oreclosed Eust to sa e said lot- pa7ment 'or w ic was guaranteed b7 t e*e abilitation Finance Corporation&

!e are in accord wit t e abo e pronouncement& =lainti'' was induced to part wit is title toa piece o' real propert7 upon *FCKs assurance t at it would itsel' pa7 t e balance o' t epurc ase price due 'rom t e purc aser a'ter its mortgage lien t ereon ad been registered&Lulled b7 t at assurance- plainti'' t erea'ter loo6ed to t e *FC- instead o' t e purc ase- 'orpa7ment& It is true t at plainti'' later eDpressed willingness to a e t e pa7ment made at alater date- w enMso it was in'ormed b7 t e bu7erM t e second release o' proceeds o' isloan would ta6e place& 8ut it is e ident t at t is period o' grace was granted b7 plainti'' int e belie' t at t e in'ormation 'urnis ed b7 t e bu7er was true- and- as 'ound b7 t e Court o'

Appeals (and t is 'inding is conclusi e upon t is Court)- *FC ne er made plainti'' 6now t atsaid in'ormation was not correct& In t ose circumstances- we do not t in6 it 'air to construeplainti''Ks letter to be an7t ing more t an a mere assent to a de'erment o' pa7ment- and sucassent s ould not be ta6en as willingness on its part to a e t e pa7ment madeonl7 if and 'en t ere was to be second release o' proceeds o' t e loan& It would beunreasonable to suppose t at t e creditor- alread7 assured o' pa7ment b7 t e *FC itsel'-would want to create uncertaint7 b7 ma6ing suc pa7ment dependent upon a contingenc7&

In iew o' t e 'oregoing- t e decision appealed 'rom is a''irmed- wit costs against t e *FC&



Ca /= - ca

%ACTS%n arious dates- Securit7 8an6 and Trust Compan7 (S8TC)- t roug its Sucat 8ranc issued4 < certi'icates o' time deposit (CT$) in 'a or o' one Angel dela Cru@ w o later lost t em&

"a / o9 Ma r > %E . 23, 1*84 %E 22, 1*82, 1*????Th o C/r 9> ha E A R E R ha $/@o /$ # h a# h/ 6 o9 (ESOS' %O:RTHO:SAN" ONL<, SEC:RIT< AN! S:CAT O%%ICE (4,000B 00 CTS (/ o , (h @@ #/

C rr/#c>, r/@a>a / o a $ $/@o or 731 $a> . a9 /r $a /, @o# @r/ /# a o# a#$rr/#$/r o9 h c/r 9 ca /, h # /r/ a h/ ra / o9 1+ @/r c/# per annum .

DS;$. I /; /

CalteD (= ils&) Inc& went to t e S8TCSucat branc and presented 'or eri'ication t e CT$sdeclared lost b7 Angel dela Cru@ alleging t at t e same were deli ered to erein plainti'' assecurit7 'or purc ases made wit CalteD = ilippines- Inc&J b7 said depositor& S8TC reEectedCalteD;s demand and claim& CalteD sued S8TC but case was dismissed rationali@ing t at CT$;sare non1negotiable instruments&

ISS:E! et er or not Certi'icate o' Time $eposit (CT$) is a negotiable instrument&

R:LING

S& T e CT$s in Buestion undoubtedl7 meet t e reBuirements o' t e law 'or negotiabilit7 underSection / o' t e Negotiable Instruments Law& T e accepted rule is t at t e negotiabilit7 or non1negotiabilit7 o' an instrument is determined 'rom t e writing- t at is- 'rom t e 'ace o' t einstrument itsel'& In t e construction o' a bill or note- t e intention o' t e parties is to control- i' itcan be legall7 ascertained& #ere- i' it was reall7 t e intention o' respondent ban6 to pa7 t eamount to Angel de la Cru@ onl7- it could a e wit 'acilit7 so eDpressed t at 'act in clear andcategorical terms in t e documents- instead o' a ing t e word 8 A* *J stamped on t e spacepro ided 'or t e name o' t e depositor in eac CT$&



! ile t e writing ma7 be read in t e lig t o' surrounding circumstances in order to more per'ectl7understand t e intent and meaning o' t e parties- 7et as t e7 a e constituted t e writing to bet e onl7 outward and isible eDpression o' t eir meaning- no ot er words are to be added to it orsubstituted in its stead&

Caltex (Philippines) Inc. vs. CAGR 97753, 10 August 1992Second Division, Regalado (J)

Facts: On va ious dates, Secu it! "an# and $ust %o& (S'"$%),t oug its Sucat anc , issued 2*0 ce ti+icates o+ ti e de-osit (%$D)in +avo o+ one Angel dela % u. / o de-osited /it t e an# t eagg egate a ount o+ 1&12 illion& Ange de la % u. delive ed t e%$Ds to %alte in connection /it is -u c ase o+ +uel - oducts + ot e latte & Su se uentl!, dela % u. in+o ed t e an# t at e lost allt e %$Ds, and t us e ecuted an a++idavit o+ loss to +acilitate t eissuance o+ t e e-lace ent %$Ds& De la % u. /as a le to o tain aloan o+ *75,000 + o t e an#, and in tu n, e e ecuted a nota i.edDeed o+ Assign ent o+ $i e De-osit in +avo o+ t e an#& $ e ea+te ,%alte - esented +o ve i+ication t e %$Ds (/ ic /e e decla ed lost !

de la % u.) /it t e an#& %alte +o all! in+o ed t e an# o+ its-ossession o+ t e %$Ds and its decision to - ete inate t e sa e& $ ean# e ected %alte 4 clai and de and, a+te %alte +ailed to +u nisco-! o+ t e e uested docu ents evidencing t e gua anteeag ee ent, etc& n 19*3, de la % u.4 loan atu ed and t e an# set6o++ and a--lied t e ti e de-osits as -a! ent +o t e loan& %alte +iledt e co -laint, ut / ic /as dis issed&

Issue [1]: et e t e %e ti+icates o+ $i e De-osit (%$Ds) a enegotia le inst u ents&

Held [1]: $ e %$Ds in uestion eet t e e ui e ents o+ t e la/ +onegotia ilit!& %ont a ! to t e lo/e cou t4s +indings, t e %$Ds a enegotia le inst u ents (Section 1)& 8egotia ilit! o non6negotia ilit!o+ an inst u ent is dete ined + o t e / iting, i&e& + o t e +ace o+ t e inst u ent itsel+& $ e docu ents - ovided t at t e a ounts



de-osited s all e e-a!a le to t e de-osito & $ e a ounts a e to ee-a!a le to t e ea e o+ t e docu ents, i&e& / osoeve a! e t eea e at t e ti e o+ - esent ent&

Issue [2]: et e t e %$Ds4 negotiation e ui e delive ! onl!&

Held [2]: Alt oug t e %$Ds a e ea e inst u ents, a validnegotiation t e eo+ +o t e t ue -u -ose and ag ee ent et/een it(%alte ) and de la % u. e ui es ot delive ! and indo se ent as t e%$Ds /e e delive ed to it as secu it! +o dela % u.4 -u c ases o+ its+uel - oducts, and not +o -a! ent& :e ein, t e e /as no negotiationin t e sense o+ a t ans+e o+ title, o legal title, to t e %$Ds in / icsituation e e delive ! o+ t e ea e %$Ds /ould ave su++iced& $ edelive ! t e eo+ as secu it! +o t e +uel -u c ases at ost constitutes

%alte as a olde +o value ! eason o+ is lien& Acco dingl!, anegotiation +o suc -u -ose cannot e e++ected ! e e delive ! o+ t e inst u ent since t e te s t e eo+ and t e su se uent dis-ositiono+ suc secu it!, in t e event o+ non6-a! ent o+ t e - inci-alo ligation, ust e cont actuall! - ovided +o &



NATI NA! "AN# $. %ANI!A I! &'FININ

* PHI! FACT+:;anila Oil as issued a - o isso ! note in +avo o+ 8ational"an# / ic included a - ovision on a con+ession o+ udg ent in caseo+ +ailu e to -a! o ligation& ndeed, ;anila Oil as +ailed to -a! onde and& $ is - o -ted t e an# to +ile a case in cou t, / e ein anatto ne! associated /it t e ente ed is a--ea ance +o t ede+endant& $o t is t e de+endant o ected&

H'!,:a ants o+ atto ne! to con+ess udg ent a en4t aut o i.edno conte -lated ! ou la/& ovisions in notes aut o i.ingatto ne!s to a--ea and con+ess udg ents against a#e s s ould note ecogni.ed in ou u isdiction ! i -lication and s ould onl! e

conside ed as valid / en given e - ess legislative sanction&



[G.R. NO. 14878*. &a# ar> 1+, 2003]

(I %a6 > Sa- #; a# , I#c. a#$ H/$F/ o No/ a>a or$a, petitioners, vs. Ro6/oMa# a#, respondent .

" E C I S I O N

)IT:G, J .'

=etitioners see6 a re iew o' t e decision o' t e Court o' Appeals in C&A& G&*& S=& No& + <//w ic as a''irmed t e Eudgment o' t e *egional Trial Court- 8ranc 4 - o' Iloilo Cit7- dismissingt e complaint o' petitioners 'or mandamus and ordering t em to pa7 respondent t e sum o' =9<-<<<&<< b7 wa7 o' attorne7Ks 'ees&

It would appear t at respondent- being t e Cit7 Treasurer o' Iloilo Cit7- assessed petitioner ban6 business taDes 'or t e 7ears /334 and /339& %n 4 ?anuar7 /33+- t e ban6 issued twomanagerKs c ec6s pa7able to t e Cit7 Treasurer o' Iloilo Cit7- t e 'irst- 5anagerKs C ec6 No&</< +3 'or =+ 4-4 <& <- was to co er t e business taD 'or t e 7ear /334- and t e second-5anagerKs C ec6 No& </< ,< in t e amount o' =+ 4-3 &+,- was to settle t e business taD 'or t e 7ear /339& #ed@elito 8a7aborda- t en manager o' t e ban6;s Iloilo 8ranc - instructed anemplo7ee- dmund Sabio- to deli er t e two managerKs c ec6s to t e Secretar7 to t e Cit75a7or- a certain Toto spinosa- w o- in turn- anded t em o er to is secretar7- Leila Salcedo-'or transmittal to t e Cit7 Treasurer& T e alue o' t e c ec6s were e entuall7 credited to t e

account o' t e Cit7 Treasurer o' Iloilo Cit7& T e c ec6s- owe er- were not applied to satis'7 t etaD liabilities o' petitioner but o' ot er taDpa7ers&

T e misapplication o' t e proceeds o' t e c ec6s came to t e 6nowledge o' respondent Cit7Treasurer w o- t ereupon- created a committee to loo6 into t e matter& T e in estigationre ealed t at it was upon t e representation o' Leila Salcedo t at t e managerKs c ec6s wereused to pa7 taD liabilities o' ot er taDpa7ers and not t ose o' petitioner ban6& 5eanw ile- t eban6- t roug counsel- made a demand on respondent to issue o''icial receipts to s ow t at itad paid its business taDes 'or t e 7ears /334 and /339 co ered b7 t e di erted managerKs



c ec6s& ! en e re'used to issue t e receipts reBuested- respondent was sued b7 petitioners'or mandamus and damages&

T e *egional Trial Court dismissed t e complaint 'or mandamus and ruled t at petitionersad no clear legal rig t to demand t e issuance o' o''icial receipts nor could respondent- gi ent e circumstances- be compelled to issue anot er set o' receipts in t e name o' t e ban6& T etrial court 'urt er ordered petitioners to pa7 respondent t e sum o' =9<-<<<&<< b7 wa7 o' attorne7Ks 'ees&

T e Court o' Appeals- on appeal b7 petitioners- sustained t e trial court in toto &

In t eir petition 'or re iew be'ore t is Court- petitioners urge a re ersal o' t e decision o' t eappellate court contending t at 1

Ha AN A'!I@N @? ANEA KS N ' SSA?ILP IN'LKE S INE NI I'A!I@N @?EA AJ S ANE IS ASS SS E @N A #K%LI' @ I'IAL S #?IQA! 'A#A'I!P; > N' , SKINJ A#K%LI' @ I'IAL IN >IS #?IQA! 'A#A'I!P E@ S N@! AS A A!! ? @ ?IJ>! N!I!L>I !@ AN A/A?E @ A!!@?N P S S %P /AP @ '@KN! ?'LAI ;

Hb !> ? ' I#! %P !> 'I!P !? ASK? ? S @ I' @ IL@IL@ @ !> A' QALK @!> !/@ ANAJ ? S '> '(S IN! NE E @? #AP N! @ I!S %KSIN SS !AR S @? !>P A? 199 ANE 1993 N!I!L S I! !@ !> ISSKAN' @ AN @ I'IAL ? ' I#!N @?' A%L %P A /?I! @ ANEA KS;

In order t at a writ o' mandamus ma7 aptl7 issue- it is essential t at- on t e one and- t eperson petitioning 'or it as a clear legal rig t to t e claim t at is soug t and t at- on t e ot er and- t e respondent as an imperati e dut7 to per'orm t at w ic is demanded o' im&

./0 %andamus will not issue to en'orce a rig t- or to compel compliance wit a dut7- w ic isBuestionable or o er w ic a substantial doubt eDists& T e principal 'unction o' t e writo' mandamus is to command and to eDpedite- not to inBuire and to adEudicate> t us- it is neit er t e o''ice nor t e aim o' t e writ to secure a legal rig t but to implement t at w ic is alread7establis ed& Unless t e rig t to t e relie' soug t is unclouded- mandamus will not issue& .40

T e c ec6s deli ered b7 petitioner ban6 to Toto spinosa were manager;s c ec6s& Amanager;s c ec6- li6e a cas ier;s c ec6- is an order o' t e ban6 to pa7- drawn upon itsel'-committing in e''ect its total resources- integrit7 and onor be ind its issuance& 87 its peculiar c aracter and general use in commerce- a manager;s c ec6 or a cas ier;s c ec6 is regardedsubstantiall7 to be as good as t e mone7 it represents& .90

87 allowing t e deli er7 o' t e subEect c ec6s to a person w o is not directl7 c arged witt e collection o' its taD liabilities- t e ban6 must be deemed to a e assumed t e ris6 o' apossible misuse t ereo' e en as it appears to a e 'allen s ort o' t e diligence ordinaril7eDpected o' it& T e ban6- o' course- is not precluded 'rom pursuing a rig t o' action against t osew o could a e been responsible 'or t e wrongdoing or w o mig t a e been unEustl7 bene'itedt ereb7&

T e award o' attorne7;s 'ees in 'a or o' respondent Cit7 Treasurer- owe er- s ould bedeleted& Suc an award- in t e concept o' damages under Article 44< o' t e Ci il Code-demands 'actual and legal Eusti'ications& .+0 ! ile t e law allows some degree o' discretion on t epart o' t e courts in awarding attorne7;s 'ees and eDpenses o' litigation- t e use o' t at Eudgment-owe er- must be done wit great care approDimating as closel7 as possible t e instanceseDempli'ied b7 t e law& Attorne7;s 'ees in t e concept o' damages are not reco erable against apart7 Eust because o' an un'a orable Eudgment& *epeatedl7- it as been said t at no premiums ould be placed on t e rig t to litigate& .,0

HERE%ORE - t e instant petition is partl7 granted& T e appealed decision is a''irmed sa e'or t e award o' attorne7;s 'ees in 'a or o' pri ate respondent w ic is ordered deleted& No costs&

http://sc.judiciary.gov.ph/jurisprudence/2003/jan2003/148789.htm#_ftn1














SO OR"ERE".

[G.R. No. 1 +84+. %/ r ar> 23, 2004]

TE""< G. (A :GAIS, petitioner, vs. "A)E (. SAHI& ANI, respondent.

" E C I S I O N <NARES5SANTIAGO,J .'

Assailed in t is petition 'or re iew on certiorari is t e ?anuar7 / - 4<<9 Amended$ecision ./0 o' t e Court o' Appeals .40 in CA1G&*& C2 No& ,, +< w ic set aside t e No ember 43-/33 $ecision .90 o' t e *egional Trial Court o' 5a6ati- 8ranc +- in Ci il Case No& 3+149 9&

=ursuant to an Agreement And Underta6ingJ .+0 dated $ecember 9- /339- petitioner Tedd7 G&=abugais- in consideration o' t e amount o' Fi'teen 5illion Four #undred ig t7 Se en T ousandFi e #undred =esos (=/,-+ -,<<&<<)- agreed to sell to respondent $a e =& Sa iEwani a lotcontaining /-493 sBuare meters located at ?acaranda Street- Nort Forbes =ar6- 5a6ati- 5etro5anila& *espondent paid petitioner t e amount o' = <<-<<<&<< as option"reser ation 'ee and t ebalance o' =/+- -,<<&<< to be paid wit in < da7s 'rom t e eDecution o' t e contract-simultaneous wit deli er7 o' t e owner;s duplicate Trans'er Certi'icate o' Title in respondent;sname t e $eed o' Absolute Sale> t e Certi'icate o' Non1TaD $elinBuenc7 on real estate taDes andClearance on =a7ment o' Association $ues& T e parties 'urt er agreed t at 'ailure on t e part o' respondent to pa7 t e balance o' t e purc ase price entitles petitioner to 'or'eit t e = <<-<<<&<<option"reser ation 'ee> w ile non1deli er7 b7 t e latter o' t e necessar7 documents obliges im toreturn to respondent t e said option"reser ation 'ee wit interest at / O per annum- t us P

5; E AKL! In case the I?S! #A?!P Fherein res$on"entG fails to $a- the balance of the $urchase $rice within the sti$ulate" "ue "ate, the sum of #600,000;00 shall be "eeme" forfeite", on the other han",

http://sc.judiciary.gov.ph/jurisprudence/2004/feb2004/156846.htm#_ftn1













un"er $aragra$h 5 of the $artiesO HAJ? N! ANE KNE ?!A(INJ ; Neither $art- shall reco4ercosts from the other;

S@ @?E ? E; F 1G

Un'a@ed- petitioner 'iled t e instant petition 'or re iew contending- inter alia - t at e can

wit draw t e amount deposited wit t e trial court as a matter o' rig t because at t e time emo ed 'or t e wit drawal t ereo'- t e Court o' Appeals as 7et to rule on t e consignation;salidit7 and t e respondent ad not 7et accepted t e same&

T e resolution o' t e case at bar inges on t e 'ollowing issues: (/) !as t ere a alidconsignationQ and (4) Can petitioner wit draw t e amount consigned as a matter o' rig tQ

Consignation is t e act o' depositing t e t ing due wit t e court or Eudicial aut oritiesw ene er t e creditor cannot accept or re'uses to accept pa7ment and it generall7 reBuires aprior tender o' pa7ment &.440 In order t at consignation ma7 be e''ecti e- t e debtor must s ow t at:(/) t ere was a debt due> (4) t e consignation o' t e obligation ad been made because t ecreditor to w om tender of pa/ment was made re'used to accept it- or because e was absent or incapacitated- or because se eral persons claimed to be entitled to recei e t e amount due or because t e title to t e obligation as been lost> (9) pre ious notice o' t e consignation ad been

gi en to t e person interested in t e per'ormance o' t e obligation> (+) t e amount due wasplaced at t e disposal o' t e court> and (,) a'ter t e consignation ad been made t e personinterested was noti'ied t ereo'& Failure in an7 o' t ese reBuirements is enoug ground to render a consignation ine''ecti e& .490

T e issues to be resol ed in t e instant case concerns one o' t e important reBuisites o' consignation- i.e - t e eDistence o' a alid tender o' pa7ment& As testi'ied b7 t e counsel 'or respondent- t e reasons w 7 is client did not accept petitioner;s tender o' pa7ment were P (/)t e c ec6 mentioned in t e August ,- /33+ letter o' petitioner mani'esting t at e is settling t eobligation was not attac ed to t e said letter> and (4) t e amount tendered was insu''icient toco er t e obligation& It is ob ious t at t e reason 'or respondent;s non1acceptance o' t e tender o' pa7ment was t e alleged insu''icienc7 t ereo' P and not because t e said c ec6 was nottendered to respondent- or because it was in t e 'orm o' manager;s c ec6& ! ile it is true t at ingeneral- a manager;s c ec6 is not legal tender- t e creditor as t e option o' re'using or acceptingit&.4+0 =a7ment in c ec6 b7 t e debtor ma7 be acceptable as alid- i' no prompt obEection to saidpa7ment is made &.4,0 ConseBuentl7- petitioner;s tender o' pa7ment in t e 'orm o' manager;s c ec6is alid&

Anent t e su''icienc7 o' t e amount tendered- it appears t at onl7 t e interest o' / O per annum on t e = <<-<<<&<< option"reser ation 'ee stated in t e de'ault clause o' t e Agreement

And Underta6ingJ was agreed upon b7 t e parties- t us P

5; E AKL! In case the I?S! #A?!P Fherein res$on"entG fails to $a- the balance of the $urchase $rice within the sti$ulate" "ue "ate, the sum of #600,000;00 shall be "eeme" forfeite", on the other han",shoul" the S '@NE #A?!P Fherein $etitionerG fail to "eli4er within the sti$ulate" $erio" the "ocumentshereb- un"erta&en, the S '@NE #A?!P shall return the sum of #600,000;00 with interest at 1*C $erannum; F 6G

T e manager;s c ec6 in t e amount o' = 4-3<<&<< (representing t e = <<-<<<&<<option"reser ation 'ee plus / O interest per annum computed 'rom $ecember 9- /339 to August9- /33+) w ic was tendered but re'used b7 respondent- and t erea'ter consigned wit t e court-was enoug to satis'7 t e obligation&

T ere being a alid tender o' pa7ment in an amount su''icient to eDtinguis t e obligation-t e consignation is alid&



















As regards petitioner;s rig t to wit draw t e amount consigned- reliance on Article /4 < o' t e Ci il Code is misplaced& T e said Article pro ides P

Art; 1 60; @nce the consignation has been "ul- ma"e, the "ebtor ma- as& the u"ge to or"er thecancellation of the obligation;

%efore the cre"itor has acce$te" the consignation, or before a u"icial confirmation that the consignationhas been $ro$erl- ma"e, the "ebtor ma- with"raw the thing or the sum "e$osite", allowing the obligation toremain in force;

T e amount consigned wit t e trial court can no longer be wit drawn b7 petitioner becauserespondent;s pra7er in is answer t at t e amount consigned be awarded to im is eBui alent toan acceptance o' t e consignation- w ic as t e e''ect o' eDtinguis ing petitioner;s obligation&

5oreo er- petitioner 'ailed to mani'est is intention to compl7 wit t e Agreement AndUnderta6ingJ b7 deli ering t e necessar7 documents and t e lot subEect o' t e sale to respondentin eDc ange 'or t e amount deposited& !it drawal o' t e mone7 consigned would enricpetitioner and unEustl7 preEudice respondent&

T e wit drawal o' t e amount deposited in order to pa7 attorne7;s 'ees to petitioner;scounsel- Att7& $e Gu@man- ?r&- iolates Article /+3/ o' t e Ci il Code w ic 'orbids law7ers 'romacBuiring b7 assignment- propert7 and rig ts w ic are t e obEect o' an7 litigation in w ic t e7ma7 ta6e part b7 irtue o' t eir pro'ession& .4 0 Furt ermore- *ule /< o' t e Canons o' =ro'essionalt ics pro ides t at t e law7er s ould not purc ase an7 interest in t e subEect matter o' t elitigation w ic e is conducting&J T e assailed transaction 'alls wit in t e pro ibition because t e$eed assigning t e amount o' = 4-3<<&<< to Att7& $e Gu@man- ?r&- as part o' is attorne7;s 'eeswas eDecuted during t e pendenc7 o' t is case wit t e Court o' Appeals& In is 5otion toInter ene- Att7& $e Gu@man- ?r&- not onl7 asserted owners ip o er said amount- but li6ewisepra7ed t at t e same be released to im& T at petitioner 6nowingl7 and oluntaril7 assigned t esubEect amount to is counsel did not remo e t eir agreement wit in t e ambit o' t e pro ibitor7pro isions& .4 0 To grant t e wit drawal would be to sanction a oid contract& .430

HERE%ORE - in iew o' all t e 'oregoing- t e instant petition 'or re iew is $ NI $ . T e?anuar7 / - 4<<9 Amended $ecision o' t e Court o' Appeals in CA1G&*& C2 No& ,, +<- w icdeclared t e consignation b7 t e petitioner in 'a or o' respondent o' t e amount o' = 4-3<<&<<wit t e Cler6 o' Court o' t e *egional Trial Court o' 5a6ati Cit7 alid- and w ic declaredpetitioner;s obligation to respondent under paragrap , o' t e Agreement And Underta6ingJ asa ing been eDtinguis ed- is AFFI*5 $& No costs&

SO OR"ERE".










%ataan cigar 4s ca

G.R. No. 930 8 !ar"# 3, 199Lessons A$$licable: ?ights of a hol"er 2Negotiable Instruments Law

A'!S:

%ataan 'igar T 'igarette actor-, Inc; 2%'' I , a cor$oration in4ol4e" in the manufacturing

of cigarettes $urchase" from (ing !im #ua Jeorge 2Jeorge (ing ,000 bales of tobacco leaf to

be "eli4ere" starting @ctober 19 *;

Dul- 13, 19 *: it issue" crosse" chec&s $ost "ate" sometime in arch 19 9 in the

total amount of #* 0(

Jeorge re$resente" that he woul" com$lete "eli4er- w+in 3 months from Eec 5 19 *

so %'' I agree" to $urchase a""itional ,500 bales of tobacco lea4es, "es$ite the $re4ious

failure in "eli4er-

It issue" $ost "ate" crosse" chec&s in the total amount of #1;1 $a-able sometime in

Se$tember 19 9;

Dul- 19, 19 *: Jeorge sol" to SI>I at a "iscount chec& amounting to #16 (, $ost "ate"

arch 31, 19 9, "rawn b- %'' I w+ Jeorge as $a-ee;

http://www.philippinelegalguide.com/2013/05/jurisprudence-gr-no-93048-march-3-1994.html

http://www.philippinelegalguide.com/2013/05/jurisprudence-gr-no-93048-march-3-1994.html







HELD:There is no doubt that the checks were crossed checks a nd for paye e’s account only.Reyes was able to show that s he has never a uthorized S ayson t o deposit the che cks nor toencash the sa me; that the ban k had allowed all checks to be deposited, cl eared and paid to

one Sayson inviolation o f the instructions in the s aid c rossed c hecks t hat the s ame w ere for payee’s accountonly; an d that R eyes maintained a savings account with the bank which ne ver cleared thesaid c hecks.

Under accepted banking practice, crossing a check i s d one by writing two parallel lines d iagonallyon the top left portion of the che cks. T he cr ossing is special where the name of a bank or abusiness institution is written between the two parallel lines, which means that the draweeshould payonly with the intervention o f the c ompany. The c rossing is g eneral where t he w ords w ritten inbetween are “And C o.” and “for payee’s a ccount only”, as in t he c ase at bar. This m eans t hat thedrawee bank should not encash the check b ut merely a ccept it for deposit.

The e ffects o f crossing a check a re a s f ollows:1. That the check may not be encashed but only deposited in the bank2. That the che ck may be neg otiated only once— to one w ho ha s an accoun t with a ban k3. That the act of crossing the check se rves as a warning to the holder that the checkhas been issued for a denite purpose so that he must inquire if he ha s received t he che ckpursuant to thepurpose

The s ubject checks w ere a ccepted for deposit by t he bank for the account of Sayson a lthoughthey were crossed checks and the payee w asn't Sayson but Reyes. The bank stampedthereon its guarantee that all prior endorsements and/or lack of endorsementsguaranteed. By such d eliberate an d po sitive ac t, the ba nk had for all legal intents andpurposes t reated the said checks a s n egotiable instruments a nd accordingly a ssumed thewarranty o f the endorser.

When the b ank paid the c hecks s o indorsed n otwithstanding that title h as n ot passed to t heendorser, it did so at its p eril and became liable to the payee for the value of the checks.

(N ). CA5 Ma /r a A /ra o#256 SCRA !"

%ACTS'DECS issued a check in favor of Abante Marketing containing a specic serial number,drawn against PNB. Th e che ck was deposited by A bante in its account w ith Capitol and thelatter con sequently deposited the same with its a ccount with PBCOM which later



deposited it with petitioner forclearing. T he ch eck w as thereafter cleared. H owever, on a r elevant date, petitioner PNBreturned the check on account that there had been a material alteration on i t. Subsequentdebits w ere made but Capitol cannot debit the account of Abante any longer for the latter hadwithdrawn all the money already from the account. This prompted Capitol to seek

reclarication from PBCOM and demanded the recrediting of its account. PBCOM followedsuit by doing the sam e aga inst PNB. D emands unhee ded,it led an action against PBCOM and the latter led a third-party complaint against petitioner.

HEL"'An alteration is s aid to be material if it alters t he effect of the instrument. It means a nunauthorized ch ange in the instrument that purports to modify in any respect t he obligation ofa party or an unauthorized addition of words or numbers or other change to an i ncompleteinstrument relating to the obligation of the party. In other words, a m aterial alteration isone which changes t he items w hich are required to be stated under Section 1 of the NIL.

In this ca se, the a lleged m aterial alteration was t he a lteration o f the s erial number of t he checkin issue—which is not an essential element of a negotiable instrument under Section 1.PNB alleges that the alteration was material since it is an accepted concept that a TCAAcheck by its ve rynature is the medium of exchange of governments, instrumentalities and agencies. As asafety measure, ever y government office or a gency is assigned che cks bearing differentserial numbers.

But this c ontention has t o fail. The check’s s erial number is n ot the sole indicia of its o rigin. Thename o f the g overnment agency i ssuing t he c heck i s cl early st ated therein. Thus, the c heck’s

drawer is s ufficiently i dentied, rendering redundant the referral to its s erial number.

Therefore, there being no material alteration in the check committed, PNB could not return thecheck to PBCOM. I t should pay t he sam e.

RE(: LIC AN! ). CA1*+ SCRA 100



FACTS:SMC issued a d ividend check i n favor of Delgado and the check w as d rawn against FBTC.Delgado was ab le to alter the ch eck, increased the a mount of the same and deposited it w ithhis account in Republic Bank. RB indorsed it with FBTC. The SMC notied FBTC of thealterations made and demanded for reimbursement. Republic Bank then didn't want toreimburse. T he t rial court held i t liable.

HELD:The 2 4-hour clearing rule i s a va lid rule a pplicable t o c ommercial banks. It is true that w henan indorsement is forged, the collecting bank or last indorser, a s a general rule,bears the loss. But the unqualied endorsement of the collecting bank of the checksshould be read togetherwith the 24-hour regulation on clearing house operation. Thus, when a drawee bank failsto return the forged check to the collecting bank w ithin the 24-hour clearing rule, the collectingbank is absolved from liability.



E-a#;/ a - M/rca or 9 #a#c/

%ac : T e spouses angelista 'iled a complaint 'or annulment o' titles against t e respondents-claiming to be t e registered owners o' 'i e (,) parcels o' land contained in t e real estatemortgage eDecuted b7 t em and mbass7 Farms Inc& in 'a or o' 5ercator Financing Corporation( 5ercatorJ)& T e mortgage was in consideration o' certain loans and credit accommodationsamounting to = ++- 4,& &

T e spouses alleged t e 'ollowing: (/) t at t e7 eDecuted t e said real estate mortgage merel7 aso''icers o' mbass7 Farms> (4) t at t e7 did not recei e t e proceeds o' t e loan e idenced b7t e promissor7 note- as all went to mbass7 Farms> (9) t at t e real estate mortgage is oid dueto absence o' a principal obligation on w ic it rests> (+) t at since t e real estate mortgage isoid- t e 'oreclosure proceedings- t e subseBuent sale as well as t e issuance o' trans'ercerti'icates o' title are li6ewise oid& =etitioners 'urt er alleged ambiguit7 in t e wording o' t epromissor7 note- w ic s ould be resol ed against 5ercator w o pro ided t e 'orm t ereo'&

5ercator admitted t at petitioners were t e owners o' t e subEect parcels o' land& It- owe er-

contended t at t e spouses eDecuted a 5ortgage in 'a or o' 5ercator Finance Corporation R'orand in consideration o' certain loans- and"or ot er 'orms o' credit accommodations obtained 'romt e 5ortgagee (de'endant 5ercator Finance Corporation) amounting to IG#T #UN$* $F%*T 1F%U* T#%USAN$ SI #UN$* $ T! NT 1FI2 "/<< (= ++- 4,& ) and tosecure t e pa7ment o' t e same and t ose ot ers t at t e 5%*TGAG ma7 eDtend to t e5%*TGAG%* (plainti''s) D D D&;J It contended t at since petitioners and mbass7 Farms signedt e promissor7 note as co1ma6ers (t e note being worded as For alue recei ed- I"!e Eointl7 andse erall7 promise to pa7 to t e order o' 5ercator J)- aside 'rom t e Continuing Suret7s ip

Agreement subseBuentl7 eDecuted to guarantee t e indebtedness- t e petitioners are Eointl7 andse erall7 liable wit mbass7 Farms& $ue to t eir 'ailure to pa7 t e obligation- t e 'oreclosure andsubseBuent sale o' t e mortgaged properties are t us alid& *espondents Sala@ar and Lamecsasserted t at t e7 are innocent purc asers 'or alue and in good 'ait &

I / : 5a7 t e spouses be eld solidaril7 liable wit mbass7 FarmsQH/ $ : S& Courts can interpret a contract onl7 i' t ere is doubt in its letter& 8ut- an eDaminationo' t e promissor7 note s ows no suc ambiguit7& 8esides- assuming arguendo t at t ere is anambiguit7- Section / o' t e Negotiable Instruments Law states- i@:

S CTI%N / & Construction w ere instrument is ambiguous& P ! ere t e language o' t einstrument is ambiguous or t ere are omissions t erein- t e 'ollowing rules o' construction appl7:(g) ! ere an instrument containing t e word I promise to pa7J is signed b7 two or more persons-t e7 are deemed to be Eointl7 and se erall7 liable t ereon&

=etitioners also insist t at t e promissor7 note does not con e7 t eir true intent in eDecuting t edocument& T e de'ense is una ailing& en i' petitioners intended to sign t e note merel7 aso''icers o' mbass7 Farms- still t is does not erase t e 'act t at t e7 subseBuentl7 eDecuted acontinuing suret7s ip agreement& A suret7 is one w o is solidaril7 liable wit t e principal&=etitioners cannot claim t at t e7 did not personall7 recei e an7 consideration 'or t e contract 'orwell1entrenc ed is t e rule t at t e consideration necessar7 to support a suret7 obligation neednot pass directl7 to t e suret7- a consideration mo ing to t e principal alone being su''icient& Asuret7 is bound b7 t e same consideration t at ma6es t e contract e''ecti e between t e principalparties t ereto& #a ing eDecuted t e suret7s ip agreement- t ere can be no dispute on t epersonal liabilit7 o' petitioners&

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