Sesbreño v. Court of Appeals [G.R. No. 89252. May 24, 1993]


Facts:
Petitioner Raul Sesbreño made a money market placement in the amount of P300,000.00 with the Philippine Underwriters Finance Corporation (“Philfinance”). The latter issued a Certificate of Confirmation of Sale “without recourse” from Delta Motors Corporation Promissory Note, a Certificate of securities indicating the sale to petitioner, with the notation that the said security was in custodianship of Pilipinas Bank, andpost-dated checks payable with petitioner as payee, Philfinance as drawer. Petitioner approached private respondent Pilipinas Bank and handed her a demand letter informing the bank that his placement with Philfinance had remained unpaid and outstanding, and that he in effect was asking for the physical delivery of the underlying promissory note. Pilipinas did not deliver the Note, nor any certificate of participation in respect thereof, to petitioner.

Issue:
 Whether or not non-negotiable instruments are transferrable.

Held:
 YES. A non-negotiable instrument may, obviously, not be negotiated; but it may be assigned or transferred, absent an express prohibition against assignment or transfer written in the face of the instrument. It is important to bear in mind that the negotiation of a negotiable instrument must be distinguished from the assignment or transfer of an instrument whether that be negotiable or non-negotiable. Only an instrument qualifying as a negotiable instrument under the relevant statute may be negotiated either by indorsement thereof coupled with delivery, or by delivery alone where the negotiable instrument is in bearer form. A negotiable instrument may, however, instead of being negotiated, also be assigned or transferred. The legal consequences of negotiation as distinguished from assignment of a negotiable instrument are, of course, different.

Ang Tek Lian v. Court of Appeals
[G.R. No. L-2516. September 25, 1950]
 
Facts:
Petitioner drew a check payable to the order of “cash” knowing that he had no funds. He delivered it in exchange of money. Petitioner was found guilty of estafa, but petitioner argued that the check had not been indorsed by him, hence, he should not be held guilty thereof.

Issue:
Whether or not indorsement is necessary to negotiate a check payable to the order of “cash”.

Held:
NO. Indorsement is no longer necessary. Under the Negotiable Instruments Law (Sec. 9 [d]), 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. Being a bearer instrument, negotiation may be done by mere delivery of the instrument.
​
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 instrument is payable to bearer. The drawee bank need not obtain any indorsement of the check, but may pay it to the person presenting it without any indorsement. .
 

Pay v.sPalanca
[G.R. No. L-29900. June 28, 1974]
 
Facts:
The promissory note indicated payment “upon demand”. Petitioner relied on this to mean that prescription would not lie unless there is demand from them. The petition was filed fifteen years after its issuance.
Petitioner George Pay is a creditor of the late Justo Palanca who... died in Manila on July 3, 1963.  The claim of the petitioner is based on a promissory note dated January 30, 1952, whereby the late Justo Palanca and Rosa Gonzales Vda. de Carlos Palanca promised to pay George Pay the amount of P26,900.00, with interest thereon at the rate... of 12% per annum.

The promissory note, dated January 30, 1962, is worded thus: "'For value received from time to time since 1947, we [jointly and severally promise to] pay to Mr. [George Pay] at his office at the China Banking Corporation the sum... of [Twenty Six Thousand Nine Hundred Pesos] (P26,900.00), with interest thereon at the rate of 12% per annum upon receipt by either of the undersigned of cash payment from the Estate of the late Don Carlos Palanca or upon demand.
 
Issue:
Whether or not a promissory note to be paid “upon demand” is immediately due and demandable.

​Held:
YES. Every obligation whose performance does not depend upon a future or uncertain event, or upon a past event unknown to the parties, is demandable at once (Art. 1179 of the New Civil Code). The obligation being due and demandable in this case, it would appear that the filing of the suit after fifteen years was much too late. Every obligation whose performance does not depend upon a future or uncertain event, or upon a past event... unknown to the parties, is demandable at once."

PHILIPPINE NATIONAL BANK vs. HON. ROMULO S. QUIMPO
and FRANCISCO S. GOZON II
G.R. No. L-53194,         March 14, 1988

Facts:
Francisco Gozon was a depositor of the Philippine National Bank (PNB Caloocan City branch). Ernesto Santos, Gozon’s friend, took a check from the latter’s checkbook which was left in the car, filled it up for the amount of P5,000, forged Gozon’s signature, and encashed it. Gozon learned about the transaction upon receipt of the bank’s statement of account, and requested the bank to recredit the amount to his account. The bank refused. Hence, the present action.

Issue:
Whether or not the bank shall bear the loss resulting from the forged check.

Held:
​Yes. The prime duty of a bank is to ascertain the genuineness of the signature of the drawer or the depositor on the check being encashed. It is expected to use reasonable business prudence in accepting and cashing a check being encashed or presented to it. Payment in neglect of duty places upon him the result of such negligence. Still, Gozon’s act in leaving his checkbook in the car, where his trusted friend remained in, cannot be considered negligence sufficient to excuse the bank from its own negligence. The bank bears the loss.

​REPUBLIC BANK vs. MAURICIA T. EBRADA
G.R. No. L-40796         July 31, 1975

Facts:
Respondent, Mauricia Ebrada encashed a back pay check for P1246.08 at Republic Bank -Escolta Branch. The Bureau of Treasury, which issued the check advised the bank that the alleged indorsement of the check by one “Martin Lorenzo” was a forgery as the latter has been dead since July 14, 1952; and requested that it be refunded the sum deducted from its account. The bank refunded the amount to the Bureau and demanded upon Ebrada the sum in question, who refused.

Hence, the present action.

Issue:
Whether or not the bank can recover from the last indorser.

Held:
According to Section 23 of the Negotiable Instruments Law (NIL), where the signature on a negotiable instrument is forged, the negotiation of the check is without force or effect. However, following the ruling in Beam vs. Farrel (US case), where a check has several indorsements on it, only the negotiation based on the forged or unauthorized signature which is inoperative. The last indorser, Mauricia Ebrada, was duty-bound to ascertain whether the check was genuine before presenting it to the bank for payment. Her failure to do so makes her liable for the loss and the Bank may recover from her the money she received for the check. Had she performed her duty, the forgery would have been detected and fraud defeated. Even if she turned over the amount to Dominguez immediately after receiving the cash proceeds of the check, she is liable as an accommodation party under Section 29 of the Negotiable Instruments Law.