PAL vs CA (NIL)

PAL vs CA

GR No. 49188, January 30, 1990

Facts:

 The petition involved the alias writ of execution when respondent Amelia Tan commenced a complaint for damages against PAL, which CDI Manila rendered a decision in her favor.

The CA affirmed the decision with modification that PAL shall pay Tan P25,000.00 as damages and P5,000.00 as attorney's fee, with costs. The case was remanded to the trial court for execution and Tan filed a motion praying for the issuance of a writ of execution of the judgment rendered by the CA. Four months later, Tan moved for the issuance of an alias writ of execution stating that the judgment rendered by the lower court, and affirmed with modification by the Court of Appeals, remained unsatisfied. In opposition, PAL countered that it already fully paid its obligation to Tan through the deputy sheriff of the respondent court, Emilio Z. Reyes, as evidenced by cash vouchers properly signed and receipted by said sheriff who had absconded.

 

Issues:

(1.)   Whether or not the payment made to the absconding sheriff by check in his name did operate to satisfy the judgment debt.

(2.) Whether or not such payments extinguish the judgment debt.

 

Held:

 (1.) No, the Court disagrees that the payment made to the absconding sheriff by check in his name operates to satisfy the judgment debt. In general, a payment, in order to be effective to discharge an obligation, must be made to the proper person. Article 1240 of the Civil Code provides that “Payment shall be made to the person in whose favor the obligation has been constituted, or his successor in interest, or any person authorized to receive it.” In the instant case, because PAL did not issue the checks intended for her, in her name, but to the absconding sheriff, such payment did not extinguish the judgment debt.

 (2.) No, the Court rules that the acceptance by the sheriff of the petitioner's checks, in the case at bar, does not, per se, operate as a discharge of the judgment debt.

Article 1249 of the Civil Code provides: The payment of debts in money shall be made in the currency stipulated, and if it is not possible to deliver such currency, then in the currency which is legal tender in the Philippines. The delivery of promissory notes payable to order, or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed, or when through the fault of the creditor they have been impaired. In the meantime, the action derived from the original obligation shall be held in abeyance. Since a negotiable instrument is only a substitute for money and not money, the delivery of such an instrument does not, by itself, operate as payment. A check, whether a manager's check or ordinary cheek, is not legal tender, and an offer of a check in payment of a debt is not a valid tender of payment and may be refused receipt by the obligee or creditor. Mere delivery of checks does not discharge the obligation under a judgment. The obligation is not extinguished and remains suspended until the payment by commercial document is actually realized. Thus, the petition is hereby DISMISSED.

Caltex Phils. vs CA (NIL)

Caltex Philippines, Inc. vs. Court of Appeals and Security Bank and Trust Co. 

G.R. No. 97753 

August 10, 1992 

FACTS:

Security bank issued Certificates of Time Deposits (CTD) to Angel dela Cruz.  The same were given by Dela Cruz to Caltex in connection to his purchase of fuel products of the latter.  On a later date, Dela Cruz approached the bank manager,  communicated  the  loss  of  the  certificates  and  requested  for  a reissuance.

Upon compliance with some formal requirements, he was issued replacements.  Thereafter, he secured a loan from the bank where he assigned the certificates as security.    Here  comes  the  petitioner, averred  that  the  certificates  were  not  actually  lost  but  were  given  as security for payment for fuel purchases.

The bank demanded some proof of the agreement but the petitioner failed to comply.    The loan matured and the time deposits were terminated and then applied to the payment of the loan. Petitioner demands the payment of the certificates but to no avail.

ISSUE:

Whether or not the certificates of time deposits (CTDs) are negotiable instruments?

HELD:

Yes. The Court held that the CTDs are negotiable instruments. The CTDs in question undoubtedly meet the requirements of the law for negotiability.

The Negotiable Instruments Law provides, an instrument to be negotiable must conform to certain requirements, hence,

1. It must be in writing and signed by the maker or drawer;
2. Must contain an unconditional promise or order to pay a sum certain in money;
3. Must be payable on demand, or at a fixed or determinable future time;
4. Must be payable to order or to bearer; and
5. Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty.

The documents provide that the amounts deposited shall be repayable to the depositor.  And who, according to the document, is the depositor? It is the “bearer.” The documents do not say that the depositor is Angel de la Cruz and that the amounts deposited are repayable specifically to him. Rather, the amounts are to  be repayable to the  bearer  of  the  documents  or,  for  that  matter,  whosoever  may  be  the bearer at the time of presentment.

If  it  was  really  the  intention  of  respondent  bank  to  pay  the  amount  to Angel de la Cruz only, it could have with facility so expressed that fact in clear and categorical terms in the documents, instead of having the word “BEARER” stamped on the space provided for the name of the depositor in each  CTD.  On  the  wordings  of  the  documents,  therefore,  the  amounts deposited  are  repayable  to  whoever  may  be  the  bearer  thereof.

Thus, petitioner’s aforesaid witness merely declared that Angel de la Cruz is the depositor  “insofar  as  the  bank  is  concerned,”  but  obviously  other  parties not  privy  to  the  transaction  between  them  would  not  be  in  a  position  to know that the depositor is not the bearer stated in the  CTDs. Hence, the situation  would require any party dealing with the CTDs to go behind the plain  import  of  what  is  written  thereon  to  unravel  the  agreement  of  the parties  thereto  through  facts  aliunde.  This  need  for  resort  to  extrinsic evidence  is  what  is  sought  to  be  avoided  by  the  Negotiable  Instruments Law  and  calls  for  the  application  of  the  elementary  rule  that  the interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity.

Metropolitan Bank and Trust Co. vs CA (NIL)

Metropolitan Bank and Trust Co. vs Court of Appeals 

G.R. No. 88866

February 18, 1991

FACTS:

Various treasury warrants drawn by the Philippine Fish Marketing Authority were subsequently indorsed by Golden Savings. Petitioner allowed Golden Savings to withdraw thrice from uncleared treasury warrants as the former was exasperated over persistent inquiries of the latter after one week. Warrants were later dishonored by the Bureau of Treasury.

ISSUE:

(a) Whether or not treasury warrants are negotiable instruments.

(b) Whether or not petitioner’s negligence would bar them for recovery.

RULING:

(a) NO. The indication of fund as the source of the payment to be made on the treasury warrants makes the order or promise to pay “not unconditional” and the warrants themselves non-negotiable. Metrobank cannot contend that by indorsing the warrants in general, Golden Savings assumed that they were “genuine and in all respects what they purport to be,” in accordance with Section 66 of the Negotiable Instruments Law. The simple reason is that this law is not applicable to the non-negotiable treasury warrants.

(b) YES. Metrobank was negligent in giving Golden Savings the impression that the treasury warrants had been cleared and that, consequently, it was safe to allow Gomez to withdraw the proceeds thereof from his account with it. Without such assurance, Golden Savings would not have allowed the withdrawals; with such assurance, there was no reason not to allow the withdrawal. However, withdrawals released after the notice of the dishonor may be debited as it will result to unjust enrichment.

Kauffman vs PNB (NIL)

 

KAUFFMAN vs THE PHILIPPINE NATIONAL BANK 

G.R. No. 16454 

September 29, 1921

Fact:

Plaintiff, President of Philippine Fiber and Produce Company was entitled to dividend from the said company. The treasurer of the company Cabled transfer the said dividends through Respondent bank to New York, then upon the confirmation the New York branch of the receipt of the funds, communicated the said receipt to the plaintiff informing the availability of the fund. Subsequently, the respondent bank decided to withhold the said funds denying the plaintiff of its access. The plaintiff questioned the action of the respondent in the court. The respondent argued that the plaintiff has no cause of action because he is not a party in the contract of transferring funds and the transaction will not fall under the provisions of the Negotiable Instrument Law.

Issue:

Whether the plaintiff has cause of action with respect to the Negotiable Instrument Law?

Held:

No, the plaintiff has no cause of action with respect only to the Negotiable Instrument Law. The transaction of the Respondent and the Philippine Fiber and Produce Company is not a negotiable Instrument. The provisions of the Negotiable Instruments Law can come into operation when there is a document in existence of the character described in section 1 of the Law; and no rights properly speaking arise in respect to said instrument until it is delivered. In this case there was an order, it is true, transmitted by the defendant bank to its New York branch, for the payment of a specified sum of money to George A. Kauffman. But this order was not made payable “to order or “to bearer,” as required in subsection (d) of that Act; and inasmuch as it never left the possession of the bank, or its representative in New York City, there was no delivery in the sense intended in section 16 of the same Law. In this connection it is unnecessary to point out that the official receipt delivered by the bank to the purchaser of the telegraphic order, and already set out above, cannot itself be viewed in the light of a negotiable instrument, although it affords complete proof of the obligation actually assumed by the bank.