NEGO DIGESTS SHIT

8/20/2019 NEGO DIGESTS SHIT

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1. Allied Banking (P) v. Lim Sio Wan, Metropolitan Bank and

Producers Bank (Rs) !"# S$RA !%" &%%' elasco, r., . P

*egotia+le nstruments

1. On 11.14.83 R deposited with P a Money Market Placement worth1.152M for a term of 31 days, matrin! on 12.15.83. On 12.5.83 one

who claimed to "e R called P# informin! them that $P% as claimed willpre&terminate and instrcted to isse a mana!ers check in the nameof 'antos. 'antos later picked p the mana!ers check in the name of R, it was cross&checked for payees accont only.

2. (he check was then deposited in the accont of )ilipinas *ement *o$)**%. at R#1 $Metro"ank% with the for!ed si!natre of R as endorser.'aid deposit was claimed to "e R#2s $Prodcer+s #ank% payment of itsO"li!ation to )**.

3. pon Matrity R went to P# to withdraw his placement - P# refsed topay ths the sewin!. R sed P# to recoer the proceeds/ P# 0led a 3rd

Party complaint a!ainst R#1 and 'antos/ Metro"ank sed )**/ and)** sed Prodcers #ank $'antos cold no lon!er "e fond%

4. (he R(* )aored R, ordered llied #ank to pay/ llied *ross&claim wasdismissed/ so were the other cross claims. P# appealed to the *

5. (he * modi0ed and held that P# shold "e held lia"le and R#1at 4 lia"ility. ence this P#s appeal.

. '* 6rmed "t modi0ed *s rlin! holdin! R#2 lia"le to P# and R#1.

7. n the instant case, the trial cort correctly fond llied ne!li!ent inissin! the mana!er9s check and in transmittin! it to 'antos withoteen a written athori:ation. n fact, llied did not een ask for thecerti0cate eidencin! the money market placement or call p ;im 'io


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petition that Prodcers #ank shold reim"rse llied for whateer ?d!ment that may "e rendered a!ainst it prsant to rt. 22 of the*iil *ode, which proidesA CDery person who thro!h an act of performance "y another, or any other means, ac@ires or comes intopossession of somethin! at the e=pense of the latter withot ?stcase or le!al !rond, shall retrn the same to him.

1. n the case at "ar, the money market transaction "etween thepetitioner and the priate respondent is in the natre of a loan. ;im'io


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&. elas-ue (P) v. Solid+ank (R) !!% S$RA 11# &%%' Re/es

R.0. ,p. *egotia+le nstruments

1. P is in the D=port #siness operatin!


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8. ltho!h. Den if an endorser of a si!ht draft was dischar!ed fromlia"ility for failre of the holder to protest for non&acceptance, hewold still "e lia"le nder his letter of ndertakin! since the same isindependent from his lia"ility nder the si!ht draftLlia"ility s"sistson it een if the si!ht draft was dishonored for non&acceptance ornonpayment. t "ears stressin! that it is a separate contract from thesi!ht draft. (he lia"ility of petitioner nder the letter of ndertakin! isdirect and primary. t is independent from his lia"ility nder the si!htdraft. ;ia"ility s"sists on it een if the si!ht draft was dishonored fornon&acceptance or non&payment. (he "ank wold certainly not haea!reed to !rant petitioner an adance e=port payment were it not forthe letter of ndertakin!.

B.


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. 2ela Rama $o (P) v. Admiral 3nited Savings Bank (RB) !!1S$RA "4& &%%' *ac5ura, ,P. *egotia+le nstruments

1. On 2.28.83, R# loaned 5E to P wG ;. sip as co&maker, it waseidence wG a promissory note $PI% $1&414, 2.28.83%, paya"le on or"efore 2.23.84 wG 18Gannm interest, proidin! also for li@idateddama!es at 3Gmonth, etc.

2. )ailin! to pay een after demands, R# sed, P answered alle!in! thatthe PI was sham and friolos, hence oid a" initio, denyin!receiin! any "ene0ts from the loan, claimin! that R# only indcedhim to e=ecte the PI, that frther he ceded seeral ehicles to R#,the ale of wGc was more than eno!h - there"y there wascondonation of the de"t and noation of the o"li!ation, also thatlaches had set in.

3. rin! the trials ;. sip died/ frther P impted Metro Rent, claimin!

that it prodded him to o"tain the loan and promised him that the loanwill "e taken care of Metro Rent, which it denied.4. R(* dismissed R#s complaint holdin! that Metro Rent had already

"een paid or otherwise e=tin!ished, relyin! on the release of mort!a!e e=ected "y R#s o6cials and *o+s testimony that MetroRent already paid the loan.

5. * reersed the decision, 0ndin! preponderance of eidence to hold Plia"le, re?ectin! Ps assertion that he merely was an accommodationparty in faor of Metro Rent, frther, that P and Metro Rent+s

a!reement cannot "ind R# since it was naware of their transactions.ence this.

. 6rmed wG Modi0cations. Ps assertion that he merely acted as anaccommodation party for MD(RO RDI( cannot release him fromlia"ility nder the note. n accommodation party who lends his nameto ena"le the accommodated party to o"tain credit or raise money islia"le on the instrment to a holder for ale een if he receies nopart of the consideration. e assmes the o"li!ation to the otherparty and "inds himself to pay the note on its de date. #y si!nin!the note, *o ths "ecame lia"le for the de"t een if he had no directpersonal interest in the o"li!ation or did not receie any "ene0ttherefrom.

7. *o also oNered the alternatie defense that the loan had already "eene=tin!ished "y payment. e testi0ed that MD(RO RDI( paid the loana week "efore pril 11, 1B83. n lon:o . 'an an, 451 '*R 45$25%, we held that the receipts of payment, altho!h not e=clsie,were deemed to "e the "est eidence of the fact of payment. n this

case, no receipt was presented to s"stantiate the claim of payment.nstead, *o presented a Release of Real Dstate Mort!a!e dated pril11, 1B83 to proe his assertion. #t a cancellation of mort!a!e is notconclsie proof of payment of a loan, een as it may sere as "asis


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for an inference that payment of the principal o"li!ation had "eenmade.

8. party who pleads payment as a defense has the "rden of proin!that sch payment had, in fact, "een made.


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wGc was denied. (he R(* rled, 0ndin! for R "t a!ainst the Ps, theR(* howeer declared that Ps are entitled to "e indemni0ed "y RK.

8. Ps appealed to the *, contendin! that the R(* erred when it appliedthe *iil *ode instead of I;, since the s"?ect was a PI, frther thatthe sale was nll and oid since there was no deliery of the ehicle/

(hat R was also aware that Ps didn+t hae the ehicle since the PI it

receied in its *e" #ranch proes the same.B. * rled that the PI was a I;, "t falted Ps for not impleadin!KM'*, there"y settin! aside the R(*s rlin! holdin! RK as lia"le.

1. '* set aside insofar as they dismissed wGo pre?dice the 3rd partycomplaint of Ps a!ainst RK, the decision of the R(* was reinstated anda6rmed.

11. n the present recorse, on its face, $a% the Promissory Iote iscomplete and re!lar/ $"% the Promissory Iote was endorsed "y theKM'* in faor of the ppellee/ $c% the ppellee, when it accepted the

Iote, acted in !ood faith and for ale/ $d% the ppellee was neerinformed, "efore and at the time the Promissory Iote was endorsedto the ppellee, that the ehicle sold to the efendants&ppellantswas not deliered to the latter and that KM'* had already preioslysold the ehicle to Dsmeraldo Kiola!o. ltho!h ose Olidomort!a!ed the ehicle to >eneroso ;ope:, who assi!ned his ri!hts tothe # )inance *orporation $*e" #ranch%, the same occrred only onMay 8, 1B87, mch later than !st 4, 1B83, when KM'* assi!ned

its ri!hts oer the *hattel Mort!a!e "y the efendants&ppellants tothe ppellee. ence, ppellee was a holder in de corse.12. holder in de corse, howeer, holds the instrment free from any

defect of title of prior parties and from defenses aaila"le to priorparties amon! themseles, and may enforce payment of theinstrment for the fll amont thereof. 'ince # )inance is a holder inde corse, petitioners cannot raise the defense of non&deliery of the o"?ect and nllity of the sale a!ainst the corporation. (he I;considers eery ne!otia"le instrment prima facie to hae "een

issed for a ala"le consideration.13. n 'alas, 181 '*R 2B $1BB%, we held that a party holdin! an

instrment may enforce payment of the instrment for the fllamont thereof. s sch, the maker cannot set p the defense of nllity of the contract of sale. (hs, petitioners are lia"le toRespondent *orporation for the payment of the amont stated in theinstrment.

14. (he fact that KM'* was not inclded as defendant in petitioners9third party complaint does not preclde recoery "y petitioners fromelino/ neither wold sch non&inclsion constitte a "ar to theapplication of the piercin!&of&the&corporate&eil doctrine.


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$1BB2%, an appellate proceedin! inolin! petitioner rcilla9s "id toaoid the aderse * decision on the ar!ment that he is notpersonally lia"le for the amont ad?d!ed since the same constittesa corporate lia"ility which neertheless cannot een "e enforceda!ainst the corporation which has not "een impleaded as a party"elow.


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!. Bautista (P) v. Auto Plus 0raders (AP0) 7 $A (R$) *egotia+lenstruments :uisum+ing, . P9

1. P, president of *riser #s ;ines $*#;% prchased arios spare partsfrom P(, and issed 2 post&dated checks to coer wGc wass"se@ently dishonored "ecase of ins6cient fnds. espite noticeof dishonor and demands, P failed to answer, P( then sed for P#22.

2. P pleaded not !ilty, and 0led a demrrer to eidence wGc was!ranted on 4.21.3, tho!h was ordered to pay the amont totalin! to248.7E incldin! the interest pls the liti!ation fees, denied on hismoe for partial reconsideration/ "oth parties appealed to the R(* wGcrled to modify/ * a6rmed the rlin!, hence this.

3. P asserts that #P 22 merely pertains to the criminal lia"ility of theaccsed and that the corporation wGc has a separate personality from

its o6cers, is solely lia"le for the ale of the two checks. P(contends that P shold "e held lia"le after it issed the two "oncin!check, one in Ps personal name and the other on the *#;+s name. P(holds P as an accommodation party wGc is lia"le on the instrment toa holder for ale/ that P is also lia"le as to the *ompany *heck,"ecase instittin! another case wold reslt to mltiplicity and delayof sits.

4. '* >ranted the petition, reersed and set&aside, the criminal casedismissed wGo pre?dice to the ri!ht of P( to 0le the proper ciil

action.5. ridical entities hae personalities separate and distinct from its

o6cers and the persons composin! it. >enerally, the stockholdersand o6cers are not personally lia"le for the o"li!ations of thecorporation e=cept only when the eil of corporate 0ction is "ein!sed as a cloak or coer for frad or ille!ality, or to work in?stice.

. (hese sitations, howeer, do not e=ist in this case. (he eidenceshows that it is *riser #s ;ines and (ransport *orporation that haso"li!ations to to Pls (raders, nc. for tires. (here is no a!reementthat petitioner shall "e held lia"le for the corporation9s o"li!ations inhis personal capacity. ence, he cannot "e held lia"le for the ale of the two checks issed in payment for the corporation9s o"li!ation inthe total amont of P248,7.

7. *ontrary to priate respondent9s contentions, petitioner cannot "econsidered lia"le as an accommodation party for *heck Io. 58832.'ection 2B of the Ie!otia"le nstrments ;aw de0nes anaccommodation party as a person Cwho has si!ned the instrment

as maker, drawer, acceptor, or indorser, withot receiin! aletherefor, and for the prpose of lendin! his name to some otherperson. s !leaned from the te=t, an accommodation party is one whomeets all the three re@isites, i:.A $1% he mst "e a party to the


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instrment, si!nin! as maker, drawer, acceptor, or indorser/ $2% hemst not receie ale therefor/ and $3% he mst si!n for the prposeof lendin! his name or credit to some other person.

8. (he 0rst two elements are present here, howeer there is ins6cienteidence presented in the instant case to show the presence of thethird re@isite. ll that the eidence shows is that petitioner si!ned

*heck Io. 58832, which is drawn a!ainst his personal accont. (hesaid check, dated ecem"er 15, 2, corresponds to the ale of 24sets of tires receied "y *riser #s ;ines and (ransport *orporationon !st 2B, 2. (here is no showin! of when petitioner issedthe check and in what capacity. n the a"sence of concrete eidence itcannot ?st "e assmed that petitioner intended to lend his name tothe corporation. ence, petitioner cannot "e considered as anaccommodation party.


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8. 6ar ;ast Bank 7 0rust $o. (P) v. represented +/ ud/ L. ?ang@


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clear compliance with that o"li!ation. ctal payment "y the draweeis !reater than his acceptance, which is merely a promise in writin! topay. (he payment of a check incldes its acceptance.

B. )ollowin! the plain lan!a!e of the law, the drawee, "y the saidpayment, reco!ni:ed and complied with its o"li!ation to pay inaccordance with the tenor of his acceptance. (he tenor of the

acceptance is determined "y the terms of the "ill as it is when thedrawee accepts. 'tated simply, ;#P was lia"le on its payment of thecheck accordin! to the tenor of the check at the time of payment,which was the raised amont. ;#P, hain! the most conenientmeans to correspond with O#, did not 0rst erify the amont of thedraft "efore it cleared and paid the same

1. >old Palace had no facility to ascertain with the drawer, O#Malaysia, the tre amont in the draft. t was left with no option "t torely on the representations of ;#P that the draft was !ood. >oldPalace is protected "y 'ection 2 of the I;, its collectin! a!ent, )arDast, shold not hae de"ited the money paid "y the drawee "ankfrom respondent companyQs accont. old Palace deposited thecheck with )ar Dast, it, nder the terms of the deposit and theproisions of the I;, "ecame an a!ent of the >old Palace for thecollection of the amont in the draft.

11. >old Palace is protected "y 'ection 2 of the I;, its collectin!a!ent, )ar Dast, shold not hae de"ited the money paid "y the

drawee "ank from respondent companyQs accont. old Palacedeposited the check with )ar Dast, it, nder the terms of the depositand the proisions of the I;, "ecame an a!ent of the >old Palace forthe collection of the amont in the draft.


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4. P*B (P) v. Rodrigue Spouses (R) !88 S$RA !1 *egotia+lenstruments Re/es, R0, , p9

1. R 'poses were clients of P #ank *e" *ity #ranch, maintainin!sain!s and demandGcheckin! acconts. Ps were en!a!ed in informallendin! "siness, they had a discontin! arran!ement wG PI#Dmployees 'ain!s and ;oad ssoc. $PDM';% of PI# Dmployees,natrally PDM';, likewise is a client of P, maintainin! a crrent andsain!s accont therein.

2. PDM'; re!larly !rants loans to its mem"ers. Rs wold rediscontthe postdated checks issed to mem"ers wheneer the associationwas short of fnds, "y replacin! the checks with their own that isreadily aaila"le.

3. t was PDM';+s policy not to approe loans to employees wGotstandin! de"ts, to s"ert this some o6cers of the former deised

a scheme, allowin! them to take ot new loans sin! the names of other employees and for!in! endorsements. 'hort to say Rs acceptedthis checks.

4. )rom 11.B8 to 2.BB, Rs issed B checks amontin! to 2.345M. PI#eentally discoered the scheme, and eentally closed PDM';+scrrent accont, resltin! to the retrned and dishonored checks,there"y incrrin! losses, there"y sin! PDM';, Mlti&Prpose *oop$MP*% and PI#, seekin! to recoer their losses, holdin! that PI# isacconta"le for payin! the wron! employees.

5. PI# moed to dismiss, for lack of case of action, ar!in! that thepayees of the checks and not Rs, and since there are no demandsfrom the PDM'; payees, the o"li!ation shold "e considereddischar!ed, wGc was denied, now PI# contends that Ps, the makers,actally did not intend for the named payees to receie the proceedsof the checks. *onse@ently, the payees were considered asC0ctitios payees as de0ned nder the Ie!otia"le nstrments ;aw$I;%. R(* rled in faor of Ps.

. * reersed and set&aside, as appealed "y PI#, holdin! that thechecks shold "e considered as paya"le to "earer and not to order.On appeal * reersed itself after Ps ar!ed that the checks on theirfaces were n@estiona"ly paya"le to order/ and that PI# committeda "reach of contract when it paid the ale of the checks to PDM';withot indorsement from the payees. (hey also ar!ed that theircase of action is not only a!ainst PDM'; "t also a!ainst PI# torecoer the ale of the checks.

7. '* 6rmed. s a rle, when the payee is 0ctitios or not intended to

"e the tre recipient of the proceeds, the check is considered as a"earer instrment.8. n order instrment re@ires an indorsement from the payee or

holder "efore it may "e alidly ne!otiated while a "earer instrment


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is ne!otia"le "y mere deliery. nder 'ection B$c% of the Ie!otia"lenstrments ;aw $I;%, a check paya"le to a speci0ed payee mayneertheless "e considered as a "earer instrment if it is paya"le tothe order of a 0ctitios or non&e=istin! person, and sch fact is knownto the person makin! it so paya"le.

B. reiew of ' ?risprdence yields that an actal, e=istin!, and liin!

payee may also "e 0ctitios if the maker of the check did not intendfor the payee to in fact receie the proceeds of the check.

1. )or the 0ctitios&payee rle to "e aaila"le as a defense, PI# mstshow that the makers did not intend for the named payees to "e partof the transaction inolin! the checks. t most, the "ank9s thesisshows that the payees did not hae knowled!e of the e=istence of thechecks.

11. *onsiderin! that respondents&sposes were transactin! with PDM';and not the indiidal payees, it is nderstanda"le that they relied on

the information !ien "y the o6cers of PDM'; that the payees wold"e receiin! the checks. Kerily, the s"?ect checks are presmedorder instrments. (his is "ecase, as fond "y "oth lower corts,PI# failed to present s6cient eidence to defeat the claim of respondents sposes that the named payees were the intendedrecipients of the checks9 proceeds. (he "ank failed to satisfy are@isite condition of a 0ctitios&payee sitation that the maker of thecheck intended for the payee to hae no interest in the transaction.

#ecase of a failre to show that the payees were 0ctitios in its"roader sense, the 0ctitios&payee rle does not apply.12. PI# was remiss in its dty as the drawee "ank. t does not dispte

the fact that its teller or tellers accepted the B checks for deposit tothe PDM'; accont een withot any indorsement from the namedpayees.

13. n a checkin! transaction, the drawee "ank has the dty to erify the!enineness of the si!natre of the drawer and to pay the checkstrictly in accordance with the drawer9s instrctions, i.e., to the

named payee in the check.


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'. . 2/ (P) v. People 7 $A !41 S$RA !# *egotia+le nstruments :uisum+ing , p9

1. P was a distri"tor of


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the >oernment and li"erally in faor of the accsed. ence, in theinstant case, the law cannot "e interpreted or applied in sch a wayas to e=pand its proision to encompass the sitation of ncollecteddeposits "ecase it wold make the law more oneros on the part of the accsed. *learly, the estafa pnished nder rticle 315,para!raph 2$d% of the Reised Penal *ode is committed when a check

is dishonored for "ein! drawn a!ainst ins6cient fnds or closedaccont, and not a!ainst ncollected deposit.

7. n (an . People, 34B '*R 777 $21%, this *ort ac@itted thepetitioner therein who was indicted nder #.P. #l!. 22, pon a checkwhich was dishonored for the reason , amon! others. oernment and li"erally in faor of the accsed.


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#. BP (P) v. Ro/eca Spouses (R) !!# S$RA &%4 *egotia+lenstruments *ac5ura, p9

1. On 8.23.B3 Rs e=ected and deliered to (oyota 'haw a PI worth577E paya"le in 48 monthly installments, matrin! on 8.18.B7, wG a3 penalty for eery month npaid. (o pay for this, they chattelmort!a!ed the s"?ect car to )D#(*.

2. )D#(* claims that Rs failed to pay monthly amorti:ations, demandin!payment/ Rs refsed claimin! that they had already payed. 'in!ensed, for Replein and dama!es $;ater #P a"sor"ed #P hence"ecomin! P%/ Rs aerred that they had paid showin! 8 postdatedchecks receied "y P, frther claimin! that no notice of dishonor forsch checks were receied "y them, and considerin! that thesechecks were issed 3 years a!o, they "elieed that they hae fl0lledtheir o"li!ation/


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8. promissory note in the hands of the creditor is a proof of inde"tedness rather than proof of payment. Reasona"le "ankin!practice and prdence dictates that, when a check !ien to a creditor"ank in payment of an o"li!ation is dishonored, the "ank sholdimmediately retrn it to the de"tor and demand its replacement orpayment lest it cases any pre?dice to the drawer. n li!ht of this and

the fact that the o"li!ation has "een partially paid, we deem it ?stand e@ita"le to redce the 3 per month penalty char!e asstiplated in the Promissory Iote to 12 per annm.


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1%. Associated $itiens Bank (P) v. BA 6inance, Miller DEsetPress, 3/ iat $5ung, $5ing 3/ Seng, 3/ $5ung


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8. (his *ort has repeatedly held that in check transactions, thecollectin! "ank or last endorser !enerally sNers the loss "ecase ithas the dty to ascertain the !enineness of all prior endorsementsconsiderin! that the act of presentin! the check for payment to thedrawee is an assertion that the party makin! the presentment hasdone its dty to ascertain the !enineness of the endorsements.


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11. Bank oF America *07SA (P) v. P5ilippine Racing $lu+ (R) !#"S$RA %1, &%%# *egotia+le nstruments Leonardo@2e $astro, p9

1. R is a domestic corporation, maintainin! seeral acconts wG diNerent"anks, one of which is P - their athori:ed ?oint si!natories were itspresident ntonio Reyes $R% and KP for )inance >re!orio Reyes $>R%.

2. On 12.88 R and >R, were schedled for a "siness trip - not todisrpt "siness transactions, they pre&si!ned seeral checks wG theircrrent accont wG P/ entrstin! the same to their accontant wGinstrction to make se of the same as the need arose.

3. On 12.1.BB, a OI OD $*larita Mesina, later criminally sed%presented to P for encashment a cople of the checks totalin! to 22E wGc were the pre&si!ned ones, paya"le to *'S. P wGo erifyin!andGor con0rmin! the le!itimacy of the checks encashed them. R

demanded from P to pay them "ack, P didn+t heed.4. R(* rled in faor of R, * a6rmed, hence this. ence this. Petitionerinsists that it merely fl0lled its o"li!ation nder law and contractwhen it encashed the aforesaid checks. nokin! 'ections 127 and1858 of the Ie!otia"le nstrments ;aw $I;%, petitioner claims thatits dty as a drawee "ank to a drawer&client maintainin! a checkin!accont with it is to pay orders for checks "earin! the drawer&client9s!enine si!natres.

5. '* 6rmed wG modi0cations, alterin! down to Ps lia"ility. (he

!enine si!natres of the client9s dly athori:ed si!natories a6=edon the checks si!nify the order for payment. (hs, prsant to thesaid o"li!ation, the drawee "ank has the dty to determine whetherthe si!natres appearin! on the check are the drawer&client9s or itsdly athori:ed si!natories. f the si!natres are !enine, the "ankhas the naoida"le le!al and contractal dty to pay. f thesi!natres are for!ed and falsi0ed, the drawee "ank has the corollary,"t e@ally naoida"le le!al and contractal, dty not to pay.

. t is well&settled that "anks are en!a!ed in a "siness impressed withp"lic interest, and it is their dty to protect in retrn their manyclients and depositors who transact "siness with them. (hey haethe o"li!ation to treat their client9s accont meticlosly and with thehi!hest de!ree of care, considerin! the 0dciary natre of theirrelationship. (he dili!ence re@ired of "anks, therefore, is more thanthat of a !ood father of a family.

7. material alteration is de0ned in 'ection 125 of the I; to "e onewhich chan!es the date, the sm paya"le, the time or place of

payment, the nm"er or relations of the parties, the crrency in whichpayment is to "e made or one which adds a place of payment whereno place of payment is speci0ed, or any other chan!e or additionwhich alters the eNect of the instrment in any respect.


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to the checks at isse, petitioner points ot that they do not containany material alteration. (his is a fact which was a6rmed "y the trialcort itself.

8. (akin! this with the testimony of petitioner9s operations mana!er thatin case of an irre!larity on the face of the check $sch as when"lanks were not properly 0lled ot% the "ank may or may not call the

client dependin! on how "sy the "ank is on a particlar day, we areeen more coninced that petitioner9s safe!ards to protect clientsfrom check frad are ar"itrary and s"?ectie. Dery client shold "etreated e@ally "y a "ankin! instittion re!ardless of the amont of his deposits and each client has the ri!ht to e=pect that eerycentao he entrsts to a "ank wold "e handled with the samede!ree of care as the acconts of other clients. Perforce, we 0nd thatpetitioner plainly failed to adhere to the hi!h standard of dili!encee=pected of it as a "ankin! instittion.

B. Den if we assme that "oth parties were !ilty of ne!li!ent acts thatled to the loss, petitioner will still emer!e as the party foremost lia"lein this case. n instances where "oth parties are at falt, this *orthas consistently applied the doctrine of last clear chance in order toassi!n lia"ility. n


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1&. Metropolitan Bank 7 0rust $o. (P) v. BA 6inance and Mala/annsurance (R) 8%" S$RA 8&%, &%%# *egotia+le nstruments $arpio@Morales, p9

1. ;. #itan!a $;#% o"tained from R a 32B.2E loan, mort!a!in! his car.2. (he car was stolen. On ;#s claim, Malayan nsrance $M% issed a

check paya"le to the order of R and ;# for 224.5E drawn a!ainst*hina #ank - crossed wG the notation )or eposit Payees ccontOnly.

3. ;#, wGo Rs indorsement or athority, deposited the check to hisaccont wG P $sia"ank now )D#(* thr mer!er%, and s"se@entlywithdrew the entire proceeds of the check. ;#s loan then "ecame pastde, and after demands he failed to settle it. R eentally learned of the car+s loss and issance "y M of the check. (hereafter R sed Pand ;#.

4. P then made a conterclaim a!ainst R, claimin! "ad faith to coercethem to pay the entire amont/ cross claim a!ainst ;# alle!in!fradlent transaction/ third&party complaint a!ainst M forne!li!ence in issin! the check paya"le to ;# and R.

5. R(* fond P and ;# ?ointly and seerally lia"le to R in accordance wG'ec. 41 of I; - all other claims "y sia"ank and #itan!a weredismissed. * a6rmed, hence this.

. '* 6rmed. 'ection 41 of the Ie!otia"le nstrments ;aw proidesA


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payment to the drawee is an assertion that the party makin! thepresentment has done its dty to ascertain the !enineness of priorindorsements. ccordin!ly, one who credits the proceeds of a checkto the accont of the indorsin! payee is lia"le in conersion to thenon&indorsin! payee for the entire amont of the check.

8. 'ection 8 of the Ie!otia"le nstrments ;aw which instrcts that

?oint payees who indorse are deemed to indorse ?ointly and seerally.Recall that when the maker dishonors the instrment, the holderthereof can trn to those secondarily lia"leLthe indorserLforrecoery. nd since the law e=plicitly mandates a solidary lia"ility onthe part of the ?oint payees who indorse the instrment, the holderthereof $assmin! the check was frther ne!otiated% can trn toeither #itan!a or # )inance for fll recompense.


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1. Anna+elle dela PeGa 7 Adrian illareal (P) v. $A 7 Rural Bank oF Bolinao (R) !4# S$RA #8, &%%# *egotia+le nstruments *ac5ura, . p9

1. On 1.2.83, R# e=tended a 81E loan to Ps, eidenced "y a PI, andpaya"le on or "efore 1.14.84 - Ps failed to pay their o"li!ation in fll- *ollection case followed.

2. On pre&trial set on 1.17.B5 Ps didn+t appear, conse@ently, ponmotion, trial moed e=&parte, and Ps were considered in defalt - M(*decided. On appeal at the R(*, wGc remanded the case "ack to theM(*, it held that the complaint was not material to the alle!ations inPara!raph 2 of the PI $ate isses%.

3.


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and the lender. person who si!ns sch an instrment is "ond tohonor it as a le!itimate o"li!ation dly assmed "y him thro!h thesi!natre he a6=es thereto as a token of his !ood faith. f he rene!eson his promise withot case, he forfeits the sympathy and assistanceof this *ort and deseres instead its sharp repdiation. (hs,petitioners cannot rene!e on their commitment to pay their

o"li!ation, incldin! interest and penalty, to the respondent.8. risprdence is replete with rlin!s that in ciil cases, the party who

alle!es a fact has the "rden of proin! it. #rden of proof is the dtyof a party to present eidence of the facts in isse necessary to proethe trth of his claim or defense "y the amont of eidence re@ired"y law. (hs, a party who pleads payment as a defense has the"rden of proin! that sch payment has, in fact, "een made.


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1". on:ales was solidarily lia"le with the

sposes Panlilio to pay nder the promissory notes. ence this.. '* Partly >ranted Ps demand for dama!es. s an accommodationparty, >on:ales is solidarily lia"le with the sposes Panlilio for theloans. n n! . ssociated #ank, 532 '*R 244 $27%, @otin! thede0nition of an accommodation party nder 'ection 2B of theIe!otia"le nstrments ;aw, the *ort cited that an accommodationparty is a person Cwho has si!ned the instrment as maker, drawer,acceptor, or indorser, withot receiin! ale therefor, and for theprpose of lendin! his name to some other person.

7. (here was no proper notice to >on:ales of the defalt anddelin@ency of the PhP 1,8, loan. t mst "e "orne in mind thatwhile solidarily lia"le with the sposes Panlilio on the PhP 1,8,loan coered "y the three promissory notes, >on:ales is only an


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accommodation party and as sch only lent his name and credit tothe sposes Panlilio. on:ales wasnot !ien the opportnity to properly act on them. (he "siness of "ankin! is impressed with p"lic interest and !reat reliance is madeon the "ank9s sworn profession of dili!ence and meticlosness in!iin! irreproacha"le serice.

B. >on:ales is lia"le for the loans coered "y the a"oe promissorynotes. )irst, >on:ales admitted that he is an accommodation partywhich P*# did not dispte. n his testimony, >on:ales admitted thathe merely accommodated the sposes Panlilio at the s!!estion of Ocampo, who was then handlin! his acconts, in order to facilitatethe fast release of the loan.


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1!. P5ilippine $ommercial nternational Bank (P) v. A. Balmaceda(RAB) 7 R. Ramos (RRR) 8!' S$RA , &%11 *egotia+lenstruments Brion, . p9

1. On B.1.B3, P sed for an action for recoery of sm of money withdama!es a!ainst R#, #ranch Mana!er of its 'ta. *r: Manila #ranch,alle!in! that "etween 1BB1 and 1BB3, R# took adanta!e of hisposition, fradlently o"tained and encashed Mana!ers check worth11.B37M. On 2.28.B4, P impleaded RRR, as a recipient.

2. R# was in defalt for not answerin!, and RRR denied any knowled!eof R#s scheme, "t admitted receiin! money from R# as paymentfor )i!htin! *ocks that the latter "o!ht from him $his "siness%.

3. R(* decided in faor of P, and ordered "oth R# and RRR to pay P. Onappeal, * dismissed the complaint a!ainst RRR, 0ndin! to eidenceto proe collsion. )rther it held P lia"le to RRR for free:in! its "ank

accont, and ordered to pay for dama!es. ence this.4. Partly >ranted. ward of ama!es to RRR was remoed "t increasedin ttorney+s fees.

5. P contends Ramos had knowled!e of, and acted in complicity with#almaceda in, the perpetation of the frad. Ramos9 e=planation thathe is a "sinessman and that he receied the Mana!er9s checks aspayment for the 0!htin! cocks he sold to #almaceda is nconincin!,!ien the lar!e sm of money inoled.


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place, two persons, in their own ri!ht, mst 0rst "e creditors andde"tors of each other.


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18. .;. $a/anan (P) v. *ort5 Star nternational 0ravel (R) 8!'S$RA 8"", &%11 *egotia+le nstruments illarama, r. , p9

1. R is a trael a!ency "siness, P is the ownerG>M of D* nternationalMana!ement and *ontractor 'erices $recritment a!ency%.

2. On 3.17.B4, K. #ala!tas $K#% >M of R in accommodation and pon theinstrction of its client, P sent the amont of F, to Kiew 'eaKentres, ;td., $K'K% in Ii!eria from her personal accont in *iti"ankMakati. On 3.2B.B4, K# a!ain sent F4, to K'K "y tele!raphictransfer wG F15, comin! from petitioner. ;ikewise on ariosdates, R e=tended credit to petitioner for the airplane tickets of hisclients, wG the total amont of sch inde"tedness nder the credite=tensions eentally reachin! PhP. 51E. (o coer payment P issedseeral checks to R.

3. 'ome *hecks were dishonored for ins6ciency of fnds, while 3 were

for stop payment order from petitioner. R informed and demandedpayment to P, "t failed to settle the o"li!ations hence the instittionof a criminal case, char!in! P wG #P22. P was fond !ilty. (he R(*,ac@itted petitioner "oth criminally and on ciil lia"ilities. !!rieed,R went to the * and reersed the order of the R(* and held P lia"leas for the ale of the checks. ence this.

4. P ar!es that since Iorth 'tar did not !ie any ala"le considerationfor the checks. e insists that the 'F85, sent to Kiew 'eaKentres was not sent for the accont of Iorth 'tar "t for the

accont of Kir!inia as her inestment. e points ot that said amontwas taken from Kir!inia9s personal dollar accont in *iti"ank and notfrom Iorth 'tar9s corporate accont. P on the other hand, contersthat petitioner is lia"le for the ale of the 0e s"?ect checks as theywere issed for ale. Respondent insists that petitioner owes Iorth'tar P2.5M pls interest of P24E, and that the P22E petitioner paidto Iorth 'tar is conclsie proof that the checks were issed forale.

5. Petition enied.


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howeer, petitioner has not presented any credi"le eidence to re"tthe presmption, as well as Iorth 'tar9s assertion, that the checkswere issed as payment for the 'F85, petitioner owed.

7. Petitioner claims that Iorth 'tar did not !ie any ala"leconsideration for the checks since the 'F85, was taken from thepersonal dollar accont of Kir!inia and not the corporate fnds of

Iorth 'tar. (he contention, howeer, deseres scant consideration. (he s"?ect checks, "earin! petitioner9s si!natre, speak forthemseles. (he fact that petitioner himself speci0cally named Iorth'tar as the payee of the checks is an admission of his lia"ility to Iorth'tar and not to Kir!inia #ala!tas, who as mana!er merely facilitatedthe transfer of fnds.


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14. R$B$ (P) v. i@0ri 2evelopment $o. 7 L. Bakuna=a (R) 84!S$RA !1", &%1& *egotia+le nstruments Sereno, . p9

1. R, to!ether with his hs"and, were re!istered owners of parcels of land, in 1BB a certain (. Milan W thro!h representatie .Montemayor $M% oNered to "y said lots for .7M. (hereafter theyarran!ed that (M will take care of all o"stacles, then Rs !ae theori!inal (*(s to (M, and (M !ae 1M as adance payment - then aftera while, (M was na"le to facilitate no, then Rs moed to rescind thecontract, and oNered to retrn the payment made - (M refsed,conse@ently Rs thro!h their company i&(ri, took ot on 1.28.B1 amana!er+s check, paya"le to (M+s company RosmilS realty andde+t., cGo (M, then the sin!. ll thro!h ot liti!ation, (M was madeaware that the check was aaila"le for pick p if they wish to settle.

2. rin! the pendency of the trial and wGo notice P reported the

e=istin! check to the #rea of (reasry as amon! its nclaimed"alances as of 1.31.3. On 12.14., Rep"lic, thro!h 'O;>DI 0ledwG the R(* the action "elow for Dscheat to said cash.

3. On 4.3.8, R settled amica"ly their dispte wG (M and to pay for 3M.On their attempt to withdraw the check to add to the 3M, and to theirsrprise it was already s"?ect to an escheat proceedin!s "efore theR(* wGc was won "y the !oernment. R(* denied their motion to "eparties. R(* e=plained that the Rep"lic had proen compliance withthe re@irements of p"lication and notice, which sered as notice to

all those who may "e aNected and pre?diced "y the *omplaint forDscheat.

4. * reersed the the R(*, rlin! that, R*#* failed to proe that thelatter had commnicated with the prchaser of the Mana!er9s *heck$i&(ri andGor 'poses #aknawa% or the desi!nated payee $Rosmil%immediately "efore the "ank 0led its 'worn 'tatement on thedormant acconts held therein. ence this.

5. Petition denied. 6rmed. (here was no contention that they were the

procrers of the Mana!er9s *heck. t is ndispted that there was noeNectie deliery of the check, renderin! the instrment incomplete.n addition, we hae already settled that respondents retainedownership of the fnds. s it is o"ios from their fore!oin! actionsthat they hae not a"andoned their claim oer the fnd, we rle thatthe allocated deposit, s"?ect of the Mana!er9s *heck, shold "ee=clded from the escheat proceedin!s.


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the state in@ires into the stats, cstody, and ownership of thenclaimed "alance to determine whether the inactiity was "ro!hta"ot "y the fact of death or a"sence of or a"andonment "y thedepositor. f after the proceedin!s the property remains withot alawfl owner interested to claim it, the property shall "e reerted tothe state Cto forestall an open initation to self&serice "y the 0rst

comers. oweer, if interested parties hae come forward and lainclaim to the property, the corts shall determine whether the credit ordeposit shold pass to the claimants or "e forfeited in faor of thestate.

7. n case the "ank complies with the proisions of the law and thenclaimed "alances are eentally escheated to the Rep"lic, the"ank Cshall not thereafter "e lia"le to any person for the same andany action which may "e "ro!ht "y any person a!ainst in any "ank=== for nclaimed "alances so deposited === shall "e defended "y the'olicitor >eneral withot cost to sch "ank.T Otherwise, shold it failto comply with the le!ally otlined procedre to the pre?dice of thedepositor, the "ank may not raise the defense proided nder 'ection5 of ct Io. 3B3, as amended.


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1'. 6idelia . Agli+ot (P) v. ngersol L. San@0ia (R) 8'4 S$RA &',&%1& *egotia+le nstruments Re/es, . p9

1. R loaned to Paci0c ;endin! X *apital *o. $P;**% the amont of 2.5M,thr its mana!er P, eidenced "y a PI issed "y P on "ehalf of P;**paya"le in 1 year s"?ect to a 24 interest per annm. lle!edly as a

!arantyGsecrity, P also issed and deliered to R 11 post datedpersonal checks drawn from her own demand accont maintained atMetro #ank.

2. pon presentment, the checks were dishonored for hain! "eendrawn a!ainst ins6cient fnds or closed accont. R demandedpayment to no aail, conse@ently 11 #P22 char!es were made/ n itsconterclaim, P did admit that they took a loan from P, "t did it inthe name of P;**, frther claimed that altho!h they hae alreadypayed the loan, and after demands of retrnin! the checks, R didn+t

do so.3. M(** sided wG P and ac@itted her of #P22 "t was ordered to pay

3M representin! the total face ale of the 11 checks pls interest.On appeal, the R(* frther a"soled !li"ot of the ciil lia"ility. encethis.

4. Petition enied. t is settled that the lia"ility of the !arantor is onlys"sidiary, and all the properties of the principal de"tor, the P;** inthis case, mst 0rst "e e=hasted "efore the !arantor may "e heldanswera"le for the de"t. (hs, the creditor may hold the !arantorlia"le only after ?d!ment has "een o"tained a!ainst the principalde"tor and the latter is na"le to pay.

5. *oncernin! a !aranty a!reement, which is a promise to answer forthe de"t or defalt of another, the law clearly re@ires that it, or somenote or memorandm thereof, "e in writin!. Otherwise, it wold "enenforcea"le nless rati0ed, altho!h nder rticle 1358 of the *iil*ode, a contract of !aranty does not hae to appear in a p"licdocment.

. (he relation "etween an accommodation party and the partyaccommodated is, in eNect, one of principal and sretyLtheaccommodation party "ein! the srety. t is a settled rle that a


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srety is "ond e@ally and a"soltely with the principal and isdeemed an ori!inal promisor and de"tor from the "e!innin!.

7. t was held in re!o that nlike in a contract of sretyship, thelia"ility of the accommodation party remains not only primary "talso nconditional to a holder for ale, sch that een if theaccommodated party receies an e=tension of the period for payment

withot the consent of the accommodation party, the latter is stilllia"le for the whole o"li!ation and sch e=tension does not releasehim "ecase as far as a holder for ale is concerned, he is a solidarycode"tor. (he mere fact, then, that !li"ot issed her own checks to'antia made her personally lia"le to the latter on her checks withotthe need for 'antia to 0rst !o after P;** for the payment of its loan. twold hae "een otherwise had it "een shown that !li"ot was amere !arantor, e=cept that since checks were issed ostensi"ly inpayment for the loan, the proisions of the Ie!otia"le nstrments;aw mst take primacy in application.


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1#. People (P) v.


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issed the check not to ;i!aray, "t to some"ody else like *aYada,his "rother&inlaw, who then ne!otiated it to ;i!aray. Releantly,;i!aray con0rmed that he did not himself see or meet

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