SONNY LO, Petitioner, v. KJS ECO-FORMWORK SYSTEM PHIL., INC.,
Respondent.
G.R. No. 149420. October 8, 2003
FACTS:
Respondent is a corporation engaged in the sale of steel scaffoldings,
while petitioner is doing business under the name and style San’s
Enterprises, a building contractor. Petitioner ordered scaffolding
equipment from respondent which was payable in ten monthly
installments. Petitioner was able to pay the first two monthly
installments. However, he encountered financial difficulties and was
unable to settle his obligation to respondent despite oral and written
demands made against him. Petitioner and respondent executed a
Deed of Assignment, where petitioner assigned to respondent his
receivables from Jomero Realty Corporation. The Deed of Assignment
states:
WHEREAS, the ASSIGNOR is the contractor for the construction of a
residential house located at Greenmeadow Avenue, Quezon City
owned by Jomero Realty Corporation;
WHEREAS, in the construction of the aforementioned residential
house, the ASSIGNOR purchased on account scaffolding equipments
from the ASSIGNEE payable to the latter;
WHEREAS, up to the present the ASSIGNOR has an obligation to the
ASSIGNEE for the purchase of the aforementioned scaffoldings now
in the amount of Three Hundred Thirty Five Thousand Four Hundred
Sixty Two and 14/100 Pesos (P335,462.14);
NOW, THEREFORE, for and in consideration of the sum of Three
Hundred Thirty Five Thousand Four Hundred Sixty Two and 14/100
Pesos (P335,462.14), Philippine Currency which represents part of
the ASSIGNOR’s collectible from Jomero Realty Corp., said ASSIGNOR
hereby assigns, transfers and sets over unto the ASSIGNEE all
collectibles amounting to the said amount of P335,462.14;
And the ASSIGNOR does hereby grant the ASSIGNEE, its successors
and assigns, the full power and authority to demand, collect, receive,
compound, compromise and give acquittance for the same or any
part thereof, and in the name and stead of the said ASSIGNOR;
And the ASSIGNOR does hereby agree and stipulate to and with said
ASSIGNEE, its successors and assigns that said debt is justly owing
and due to the ASSIGNOR for Jomero Realty Corporation and that
said ASSIGNOR has not done and will not cause anything to be done
to diminish or discharge said debt, or delay or to prevent the
ASSIGNEE, its successors or assigns, from collecting the same;
And the ASSIGNOR further agrees and stipulates as aforesaid that
the said ASSIGNOR, his heirs, executors, administrators, or assigns,
shall and will at times hereafter, at the request of said ASSIGNEE, its
successors or assigns, at his cost and expense, execute and do all
such further acts and deeds as shall be reasonably necessary to
effectually enable said ASSIGNEE to recover whatever collectibles
said ASSIGNOR has in accordance with the true intent and meaning
of these presents
When respondent tried to collect the credit from Jomero, the latter
refused to Honor the Deed of Assignment, claiming that, the
petitioner was also indebted to them. Which caused the respondent
to send another demand letter to the petitioner, in which the latter
refused. Claiming that, the Deed of Assignment extinguished his
obligation to the respondent. Prompting the respondent to file a case
in the RTC against the petitioner. The RTC ruled in favor of the
petitioner. The respondent, dissatisfied with the decision, made an
appeal to the CA. The CA ruled in favor of the respondent. Stating
that, the Deed of Assignment did not extinguish the obligation of the
petitioner to the respondent and petitioner failed to comply with his
warranty under the Deed. Hence, this petition.
ISSUE:
Whether or not the Deed of Assignment extinguished the petitioner’s
obligation
HELD:
The Deed of Assignment did not extinguish the petitioner’s obligation.
Article 1628 of the Civil Code provides:
The vendor in good faith shall be responsible for the existence: and
legality of the credit at the time of the sale, unless it should have
been sold as doubtful; but not for the solvency of the debtor, unless
it has been so expressly stipulated or unless the insolvency was prior
to the sale and of common knowledge.
Petitioner, as vendor or assignor, is bound to warrant the existence
and legality of the credit at the time of the sale or assignment. When
Jomero claimed that it was no longer indebted to petitioner since the
latter also had an unpaid obligation to it, it essentially meant that its
obligation to petitioner has been extinguished by compensation. In
other words, respondent alleged the non-existence of the credit and
asserted its claim to petitioner’s warranty under the assignment.
Therefore, it required of the petitioner to make good its warranty and
payment of the obligation. By warranting the existence of the credit,
petitioner should be deemed to have ensured the performance
thereof in case the same is later found to be inexistent.
RAUL SESBREÑO, Petitioner, v. HON. COURT OF APPEALS, DELTA
MOTORS CORPORATION and PILIPINAS BANK, Respondents.
G.R. No. 89252. May 24, 1993
FACTS:
Petitioner made a money market placement with the Philippine
Underwriters Finance Corporation ("Philfinance"), Cebu Branch; the
placement, with a term of thirty-two days. Philfinance also issued the
following documents to petitioner:
(a) the Certificate of Confirmation of Sale, "without recourse," No.
20496 of one (1) Delta Motors Corporation Promissory Note ("DMC
PN") No. 2731 for a term of 32 days at 17.0% per annum;
(b) the Certificate of securities Delivery Receipt No. 16587 indicating
the sale of DMC PN No. 2731 to petitioner, with the notation that the
said security was in custodianship of Pilipinas Bank, as per
Denominated Custodian Receipt ("DCR") No. 10805 dated 9 February
1981; and
(c) post-dated checks payable on 13 March 1981 (i.e., the maturity
date of petitioner's investment), with petitioner as payee, Philfinance
as drawer, and Insular Bank of Asia and America as drawee, in the
total amount of P304,533.33.
Petitioner sought to encash the postdated checks issued by
Philfinance. However, the checks were dishonored for having been
drawn against insufficient funds. Philfinance issued another DCR
issued by private respondent, Pilipinas Bank. Which reads:
PILIPINAS BANK
Makati Stock Exchange Bldg.,
Ayala Avenue, Makati,
Metro Manila
February 9, 1981
------VALUE DATE
TO Raul Sesbreño
April 6, 1981
-------MATURITY DATE
NO. 10805
DENOMINATED CUSTODIAN RECEIPT
This confirms that as a duly Custodian Bank, and upon instruction of
PHILIPPINE UNDERWRITES FINANCE CORPORATION, we have in our
custody the following securities to you [sic] the extent herein
indicated.
SERIAL MAT. FACE ISSUED REGISTERED AMOUNT
NUMBER DATE VALUE BY HOLDER PAYEE
2731 4-6-81 2,300,833.34 DMC PHIL. 307,933.33
UNDERWRITERS
FINANCE CORP.
We further certify that these securities may be inspected by you or
your duly authorized representative at any time during regular
banking hours.
Upon your written instructions we shall undertake physical delivery of
the above securities fully assigned to you should this Denominated
Custodianship Receipt remain outstanding in your favor thirty (30)
days after its maturity.
PILIPINAS BANK
(By Elizabeth De Villa
Illegible Signature)
A few months later, petitioner approached Ms. De Villa handing her a
demand letter for the abovementioned DCR and the delivery of the
DMC promissory note. Petitioner also found out that the DMC
promissory note, which would mature a few days later, had
Philfinance as its payee and DMC as its maker. Under that same note,
the word “NON-NEGOTIABLE” is also stamped. Pilipinas did not
deliver the Note, nor any certificate of participation in respect
thereof, to petitioner. Petitioner sent multiple demand letters to the
private respondents but to no avail. Prompting the petitioner to file a
case with the RTC against the private respondents. The RTC
dismissed the case for lack of merit and for lack of cause of action.
Petitioner filed an appeal with the CA. The CA ruled in favor of the
respondents. CA held that, petitioner acquired no rights in respect of
the DMC promissory note. Since, the note was not negotiable, the
petitioner was not a holder in due course cannot sue on the
instrument in his own name and cannot demand or receive payment.
The petitioner moved for a reconsideration; however, it was denied.
Hence, this petition.
ISSUE:
Whether or not the non-negotiability of the note prevents its
transferability
HELD:
The non-negotiability of the note does not prevent its assignment or
transferability. According to the Supreme Court, 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:
The words "not negotiable," stamped on the face of the bill of lading,
did not destroy its assignability, but the sole effect was to exempt the
bill from the statutory provisions relative thereto, and a bill, though
not negotiable, may be transferred by assignment; the assignee
taking subject to the equities between the original parties.
LORETO D. DE LA VICTORIA, as City Fiscal of Mandaue City and in
his personal capacity as garnishee, Petitioner, v. HON. JOSE P.
BURGOS, Presiding Judge, RTC, Br. XVII, Cebu City, and RAUL H.
SESBREÑO, Respondents
G.R. No. 111190 June 27, 1995
FACTS:
Private respondent won a case for damages against Assistant City
Fiscals before the RTC of Cebu City, the decision became final and
executory. A notice of garnishment was served on the petitioner. The
notice directed petitioner not to disburse, transfer, release or convey
to any other person except to the deputy sheriff concerned the salary
checks or other checks, monies, or cash due or belonging to
Mabanto, Jr. (defendant), under penalty of law. Private respondent
filed a motion before the trial court for examination of the
garnishees. Finding no more legal obstacle to act on the motion for
examination of the garnishees, the RTC directed the petitioner to
submit his report showing the amount of the garnished salaries of
Mabanto, Jr., within fifteen 15 days from receipt. Petitioner moved to
quash the notice of garnishment claiming that he was not in
possession of any money, funds, credit, property or anything of value
belonging to Mabanto, Jr., except his salary and RATA checks, but
that said checks were not yet properties of Mabanto, Jr., until
delivered to him. He further claimed that, as such, they were still
public funds which could not be subject to garnishment. The RTC
denied motions and ordered the petitioner to immediately comply.
The petitioner moved for reconsideration but was denied. Hence, this
petition.
ISSUE:
Whether or not the checks subject of garnishment belongs to
Mabanto or whether they still belong to the government.
HELD:
The checks subject of garnishment still belongs to the government.
Under Section 16 of the Negotiable Instruments Law, every contract
on a negotiable instrument is incomplete and revocable until delivery
of the instrument for the purpose of giving effect thereto. As
ordinarily understood, delivery means the transfer of the possession
of the instrument by the maker or drawer with the intent to transfer
title to the payee and recognize him as the holder thereof. Herein,
the salary check of a government officer or employee does not
belong to him before it is physically delivered to him. Inasmuch as
said checks had not yet been delivered to Mabanto, they did not
belong to him and still had the character of public funds. As a
necessary consequence of being public fund, the checks may not be
garnished to satisfy the judgment.
BANK OF THE PHILIPPINE ISLANDS, Petitioner, v. COURT OF
APPEALS, ANNABELLE A. SALAZAR, and JULIO R. TEMPLONUEVO,
Respondents.
G.R. NO. 136202: January 25, 2007
FACTS:
Private respondent Salazar filed an action for a sum of money with
damages against the petitioner. Private respondent Salazar prayed
for the recovery of the amount debited by petitioner from her
account. Petitioner in its answer alleged that, private respondent
Templonuevo demanded from the former the amount of the 3 checks
erroneously deposited to the account of private respondent Salazar.
Petitioner then froze the account of private respondent Salazar.
However, the account that was frozen was not the same account
where the checks were deposited, and it was discovered that the
account containing the checks had already been closed by private
respondent Salazar. The two private respondents tried to reach a
settlement nevertheless it was unsuccessful. The petitioner
reimbursed private respondent Templonuevo through a cashier’s
check which was debited from respondent Salazar’s frozen account.
The RTC rendered a decision in favor of respondent Salazar. The CA
affirmed the ruling of the RTC. It held that, respondent Salazar was
entitled to the proceeds of the three (3) checks notwithstanding the
lack of endorsement thereon by the payee. The CA concluded that
Salazar and Templonuevo had previously agreed that the checks
payable to JRT Construction and Trading belonged to Salazar and
would be deposited to her account, with petitioner acquiescing to the
arrangement. Hence, this petition.
ISSUE:
Whether or not the unindorsed checks were transferred to
respondent Salazar
HELD:
The unindorsed checks were not transferred to respondent Salazar.
Section 49 of the Negotiable Instruments Law contemplates a
situation whereby the payee or indorsee delivers a negotiable
instrument for value without indorsing it, thus:
Transfer without indorsement; effect of - Where the holder of an
instrument payable to his order transfers it for value without
indorsing it, the transfer vests in the transferee such title as the
transferor had therein, and the transferee acquires in addition, the
right to have the indorsement of the transferor. But for the purpose
of determining whether the transferee is a holder in due course, the
negotiation takes effect as of the time when the indorsement is
actually made. Negotiable instruments are negotiated by "transfer to
one person or another in such a manner as to constitute the
transferee the holder thereof. If payable to bearer it is negotiated by
delivery. If payable to order it is negotiated by the indorsement
completed by delivery.
The present case involves checks payable to order. Not being a
payee or indorsee of the checks, private respondent Salazar could not
be a holder thereof.
VICKY C. TY, petitioner,
vs.
PEOPLE OF THE PHILIPPINES, respondent.
G.R. No. 149275 September 27, 2004
FACTS:
Petitioner’s mother was confined in Manila Doctor's Hospital. Having
no cash, petitioner signed a contract of responsibility with the
hospital. Petitioner issued 7 checks to cover the said expenses, all of
which were dishonored for insufficiency of funds, with the "Account
Closed" advice. Petitioner was charged with the violation of B.P. 22.
The trial court found the petitioner guilty. Petitioner filed a petition to
the CA stating that, there was absence of valuable consideration for
the issuance of the checks and the payee had knowledge of the
insufficiency of funds in the account. She protested that the trial
court should not have applied the law mechanically, without due
regard to the principles of justice and equity. However, the CA
affirmed the trial court’s decision. Hence, this petition.
ISSUE:
Whether or not there was valuable consideration in the issuance of
the checks
HELD:
The checks were issued with valuable consideration.
Section 24 of the Negotiable Instruments Law creates a presumption
that every party to an instrument acquired the same for a
consideration or for value.
In alleging otherwise, Petitioner has the onus to prove that the
checks were issued without consideration. Petitioner must present
convincing evidence to overthrow the presumption, which she failed
to do so.