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Monthly Archives: April 2014

Consolidated Plywood Industries, Inc. v. IFC Leasing and Acceptance Corp [G.R. No. 72593. April 30, 1987]

FACTS

A non-negotiable promissory note was issued:

“FOR VALUE RECEIVED, I/we jointly and severally promise to pay to the INDUSTRIAL PRODUCTS MARKETING, the sum of ONE MILLION NINETY THREE THOUSAND SEVEN HUNDRED EIGHTY NINE PESOS & 71/100 only (P 1,093,789.71), Philippine Currency, the said principal sum, to be payable in 24 monthly installments starting July 15, 1978 and every 15th of the month thereafter until fully paid. …”

ISSUE

Whether or not a non-negotiable promissory note may be assigned.

RULING

YES. The subject promissory note may be assigned. It follows then that the respondent can never be a holder in due course but remains a mere assignee of the note in question. Thus, the petitioner may raise against the respondent all defenses available to it as against the seller-assignor.

 

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Casabuena v. Court of Appeals [G.R. No. 115410. February 27, 1988]

FACTS

To secure debt, spouses Urdaneta ceded their rights over the land through a deed of assignment.

ISSUE

Whether or not a deed of assignment transfer ownership of property to assignee.

RULING

NO. The act of assignment could not have operated to efface liens or restrictions burdening the right assigned, because an assignee cannot acquire a greater right than that pertaining to the assignor. At most, an assignee can only acquire rights duplicating those which his assignor is entitled by law to exercise. In the case at bar, the Casabuenas merely stepped into Benin’s shoes, who was not so much an owner as a mere assignee of the rights of her debtors. Not having acquired any right over the land in question, it follows that Benin conveyed nothing to defendants with respect to the property.

 

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De La Victoria v. Judge Burgos [G.R. No. 111190. June 27, 1995]

FACTS

Private respondent filed a complaint for damages against certain Fiscal Mabanto, Jr., whose judgment is favorable to the former. The decision became final and executory and notice of garnishment was served on petitioner to withhold Mabanto’s salary checks.

ISSUES

(a) Whether or not a check in the hands of the drawer is already owned by the payee.

(b) Whether or not an undelivered salary check may already transfer title to the payee.

RULING

(a) NO. Section 16 of the Negotiable Instruments Law is clear that “…where the instrument is no longer in the possession of a party whose signature appears thereon, a valid and intentional delivery by him is presumed until the contrary is proved.” Proof to the contrary is its own finding that the checks were in the custody of petitioner. In this case, as said checks had not yet been delivered to Mabanto, Jr., they did not belong to him and still had the character of public funds.

(b) NO. 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 intent to transfer title to the payee and recognize him as the holder thereof. Here, there is no delivery to speak of as the salary check is not yet in the hands of Mabanto Jr. as the holder.

 

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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”.

RULING

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.

 

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Pay v. Palanca [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.

ISSUE

Whether or not a promissory note to be paid “upon demand” is immediately due and demandable.

RULING

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.

 

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