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Sesbreno vs CA (GR 89252, 24 May 1993)
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, and post-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.
Whether or not non-negotiable instruments are transferrable.
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.