The document summarizes a court case between Banco de Oro Savings and Mortgage Bank (plaintiff) and Equitable Banking Corporation (defendant) regarding several crossed manager's checks totaling PHP 345,987.53 that were deposited with the defendant but were later found to have forged endorsements. The plaintiff demanded reimbursement from the defendant under clearing house rules, but the defendant refused. An arbitrator ruled in favor of the plaintiff, ordering the clearing accounts to be adjusted. The defendant appealed. The court case discusses the facts of the transaction, the issue of whether the checks were negotiable, and rules that the clearing house has jurisdiction and that the checks were negotiable instruments.
The document summarizes a court case between Banco de Oro Savings and Mortgage Bank (plaintiff) and Equitable Banking Corporation (defendant) regarding several crossed manager's checks totaling PHP 345,987.53 that were deposited with the defendant but were later found to have forged endorsements. The plaintiff demanded reimbursement from the defendant under clearing house rules, but the defendant refused. An arbitrator ruled in favor of the plaintiff, ordering the clearing accounts to be adjusted. The defendant appealed. The court case discusses the facts of the transaction, the issue of whether the checks were negotiable, and rules that the clearing house has jurisdiction and that the checks were negotiable instruments.
The document summarizes a court case between Banco de Oro Savings and Mortgage Bank (plaintiff) and Equitable Banking Corporation (defendant) regarding several crossed manager's checks totaling PHP 345,987.53 that were deposited with the defendant but were later found to have forged endorsements. The plaintiff demanded reimbursement from the defendant under clearing house rules, but the defendant refused. An arbitrator ruled in favor of the plaintiff, ordering the clearing accounts to be adjusted. The defendant appealed. The court case discusses the facts of the transaction, the issue of whether the checks were negotiable, and rules that the clearing house has jurisdiction and that the checks were negotiable instruments.
BANCO DE ORO SAVINGS AND MORTGAGE BAN, petitioner, vs. E!"ITAB#E BANING COR$ORATION, $%I#I$$INE C#EARING %O"SE COR$ORATION, AND REGIONA# TRIA# CO"RT O& !"E'ON CIT(, BRANC% )CII *92+, respondents. FACTS: It appears that some time in March, April, May and August 1983, plaintiff through its Visa Card epartment, dre! si" crossed Manager#s chec$ %&"hi'its (A( to ()(, and herein referred to as Chec$s* having an aggregate amount of )orty )ive +housand ,ine -undred and &ighty +!o . /30111 %234,98/./3* 2esos and paya'le to certain mem'er esta'lishments of Visa Card. 5u'se6uently, the Chec$s !ere deposited !ith the defendant to the credit of its depositor, a certain Aida +rencio. )ollo!ing normal procedures, and after stamping at the 'ac$ of the Chec$s the usual endorsements. All prior and0or lac$ of endorsement guaranteed the defendant sent the chec$s for clearing through the 2hilippine Clearing -ouse Corporation %2C-C*. Accordingly, plaintiff paid the Chec$s7 its clearing account !as de'ited for the value of the Chec$s and defendant#s clearing account !as credited for the same amount, +hereafter, plaintiff discovered that the endorsements appearing at the 'ac$ of the Chec$s and purporting to 'e that of the payees !ere forged and0or unauthori8ed or other!ise 'elong to persons other than the payees. 2ursuant to the 2C-C Clearing 9ules and 9egulations, plaintiff presented the Chec$s directly to the defendant for the purpose of claiming reim'ursement from the latter. -o!ever, defendant refused to accept such direct presentation and to reim'urse the plaintiff for the value of the Chec$s7 hence, this case. In its Complaint, plaintiff prays for :udgment to re6uire the defendant to pay the plaintiff the sum of 234,98/./3 !ith interest at the rate of 1/; per annum from the date of the complaint plus attorney#s fees in the amount of 211,111.11 as !ell as the cost of the suit. In accordance !ith 5ection 38 of the Clearing -ouse 9ules and 9egulations, the dispute !as presented for Ar'itration7 and Atty. Ceasar <ueru'in !as designated as the Ar'itrator. After an e"haustive investigation and hearing the Ar'iter rendered a decision in favor of the plaintiff and against the defendant ordering the 2C-C to de'it the clearing account of the defendant, and to credit the clearing account of the plaintiff of the amount of 234,98/./3 !ith interest at the rate of 1/; per annum from date of the complaint and Attorney#s fee in the amount of 24,111.11. ,o pronouncement as to cost !as made. 1 In a motion for reconsideration filed 'y the petitioner, the =oard of irectors of the 2C-C affirmed the decision of the said Ar'iter in this !ise> In vie! of all the foregoing, the decision of the Ar'iter is confirmed7 and the 2hilippine Clearing -ouse Corporation is here'y ordered to de'it the clearing account of the defendant and credit the clearing account of plaintiff the amount of )orty )ive +housand ,ine -undred &ighty +!o . /30111 %234,98/./3* 2esos !ith interest at the rate of 1/; per annum from date of the complaint, and the Attorney#s fee in the amount of )ive +housand %24,111.11* 2esos. ISSUE: ?ere the su':ect chec$s non@negotia'le and if not, does it fall under the am'it of the po!er of the 2C-CA 9BCI,D> Vie!ing these provisions the conclusion is clear that the 2C-C 9ules and 9egulations should not 'e interpreted to 'e applica'le only to chec$s !hich are negotia'le instruments 'ut also to non@negotia'le instruments and that the 2C-C has :urisdiction over this case even as the chec$s su':ect of this litigation are admittedly non@negotia'le. G.R. No. 977,- Au.u/0 10, 1992 CA#TE) *$%I#I$$INES+, INC., petitioner, vs. CO"RT O& A$$EA#S an1 SEC"RIT( BAN AND TR"ST COM$AN(, respondents. Bito, Lozada, Ortega & Castillo for petitioners. Nepomuceno, Hofilea & Guingona for private. FACTS: 1. En various dates, defendant, a commercial 'an$ing institution, through its 5ucat =ranch issued /81 certificates of time deposit %C+s* in favor of one Angel dela Cru8 !ho deposited !ith herein defendant the aggregate amount of 21,1/1,111.11, as follo!s> %Foint 2artial 5tipulation of )acts and 5tatement of Issues, Eriginal 9ecords, p. /1G7 efendant#s &"hi'its 1 to /81*7 CT CT ates !erial Nos. "uantit# $mount // )e'. 8/ 91111 to 911/1 /1 281,111 /H )e'. 8/ G3H1/ to G3H91 91 3H1,111 / Mar. 8/ G3G11 to G3G31 31 1H1,111 3 Mar. 8/ 911/G to 9113H /1 81,111 4 Mar. 8/ G3G9G to 93811 3 1H,111 4 Mar. 8/ 899H4 to 8998H // 88,111 4 Mar. 8/ G113G to 91141 3 1H,111 8 Mar. 8/ 91111 to 911/1 /1 81,111 9 Mar. 8/ 911/3 to 91141 /8 11/,111 9 Mar. 8/ 89991 to 91111 11 31,111 9 Mar. 8/ 91/41 to 91/G/ // 88,111 III IIII +otal /81 21,1/1,111 JJJJJ JJJJJJJJ /. Angel dela Cru8 delivered the said certificates of time %C+s* to herein plaintiff in connection !ith his purchased of fuel products from the latter %Eriginal 9ecord, p. /18*. 3. 5ometime in March 198/, Angel dela Cru8 informed Mr. +imoteo +iangco, the 5ucat =ranch Manger, that he lost all the certificates of time deposit in dispute. Mr. +iangco advised said depositor to e"ecute and su'mit a notari8ed Affidavit of Coss, as re6uired 'y defendant 'an$#s procedure, if he desired replacement of said lost C+s %+5,, )e'ruary 9, 198G, pp. 38@41*. 3. En March 18, 198/, Angel dela Cru8 e"ecuted and delivered to defendant 'an$ the re6uired Affidavit of Coss %efendant#s &"hi'it /81*. En the 'asis of said affidavit of loss, /81 replacement C+s !ere issued in favor of said depositor %efendant#s &"hi'its /8/@4H1*. 4. En March /4, 198/, Angel dela Cru8 negotiated and o'tained a loan from defendant 'an$ in the amount of &ight -undred 5eventy )ive +housand 2esos %28G4,111.11*. En the same date, said depositor e"ecuted a notari8ed eed of Assignment of +ime eposit %&"hi'it 4H/* !hich stated, among others, that he %de la Cru8* surrenders to defendant 'an$ (full control of the indicated time deposits from and after date( of the assignment and further authori8es said 'an$ to pre@terminate, set@off and (apply the said time deposits to the payment of !hatever amount or amounts may 'e due( on the loan upon its maturity %+5,, )e'ruary 9, 198G, pp. H1@H/*. H. 5ometime in ,ovem'er, 198/, Mr. Aranas, Credit Manager of plaintiff Calte" %2hils.* Inc., !ent to the defendant 'an$#s 5ucat 'ranch and presented for verification the C+s declared lost 'y Angel dela Cru8 alleging that the same !ere delivered to herein plaintiff (as security for purchases made !ith Calte" 2hilippines, Inc.( 'y said depositor %+5,, )e'ruary 9, 198G, pp. 43@ H8*. G. En ,ovem'er /H, 198/, defendant received a letter %efendant#s &"hi'it 4H3* from herein plaintiff formally informing it of its possession of the C+s in 6uestion and of its decision to pre@terminate the same. 8. En ecem'er 8, 198/, plaintiff !as re6uested 'y herein defendant to furnish the former (a copy of the document evidencing the guarantee agreement !ith Mr. Angel dela Cru8( as !ell as (the details of Mr. Angel dela Cru8( o'ligation against !hich plaintiff proposed to apply the time deposits %efendant#s &"hi'it 4H3*. 9. ,o copy of the re6uested documents !as furnished herein defendant. 11. Accordingly, defendant 'an$ re:ected the plaintiff#s demand and claim for payment of the value of the C+s in a letter dated )e'ruary G, 1983 %efendant#s &"hi'it 4HH*. 11. In April 1983, the loan of Angel dela Cru8 !ith the defendant 'an$ matured and fell due and on August 4, 1983, the latter set@off and applied the time deposits in 6uestion to the payment of the matured loan %+5,, )e'ruary 9, 198G, pp. 131@131*. 1/. In vie! of the foregoing, plaintiff filed the instant complaint, praying that defendant 'an$ 'e ordered to pay it the aggregate value of the certificates of time deposit of 21,1/1,111.11 plus accrued interest and compounded interest therein at 1H; per annum, moral and e"emplary damages as !ell as attorney#s fees. ISSUE: %1* that the su':ect certificates of deposit are non@negotia'le despite 'eing clearly negotia'le instruments RULING: ?e disagree !ith these findings and conclusions, and here'y hold that the C+s in 6uestion are negotia'le instruments. 5ection 1 Act ,o. /131, other!ise $no!n as the ,egotia'le Instruments Ca!, enumerates the re6uisites for an instrument to 'ecome negotia'le, viz> %a* It must 'e in !riting and signed 'y the ma$er or dra!er7 %'* Must contain an unconditional promise or order to pay a sum certain in money7 %c* Must 'e paya'le on demand, or at a fi"ed or determina'le future time7 %d* Must 'e paya'le to order or to 'earer7 and %e* ?here the instrument is addressed to a dra!ee, he must 'e named or other!ise indicated therein !ith reasona'le certainty. +he C+s in 6uestion undou'tedly meet the re6uirements of the la! for negotia'ility. +he parties# 'one of contention is !ith regard to re6uisite %d* set forth a'ove. It is noted that Mr. +imoteo 2. +iangco, 5ecurity =an$#s =ranch Manager !ay 'ac$ in 198/, testified in open court that the depositor reffered to in the C+s is no other than Mr. Angel de la Cru8. """ """ """ Atty. Calida> 6 In other !ords Mr. ?itness, you are saying that per 'oo$s of the 'an$, the depositor referred %sic* in these certificates states that it !as Angel dela Cru8A !itness> a Kes, your -onor, and !e have the record to sho! that Angel dela Cru8 !as the one !ho cause %sic* the amount. Atty. Calida> 6 And no other person or entity or company, Mr. ?itnessA !itness> a ,one, your -onor. 7 """ """ """ Atty. Calida> 6 Mr. ?itness, !ho is the depositor identified in all of these certificates of time deposit insofar as the 'an$ is concernedA !itness> a Angel dela Cru8 is the depositor. 8 """ """ """ En this score, the accepted rule is that the negotia'ility or non@negotia'ility of an instrument is determined from the !riting, that is, from the face of the instrument itself. 9 In the construction of a 'ill or note, the intention of the parties is to control, if it can 'e legally ascertained. 10 ?hile the !riting may 'e read in the light of surrounding circumstances in order to more perfectly understand the intent and meaning of the parties, yet as they have constituted the !riting to 'e the only out!ard and visi'le e"pression of their meaning, no other !ords are to 'e added to it or su'stituted in its stead. +he duty of the court in such case is to ascertain, not !hat the parties may have secretly intended as contradistinguished from !hat their !ords e"press, 'ut !hat is the meaning of the !ords they have used. ?hat the parties meant must 'e determined 'y !hat they said. 11 Contrary to !hat respondent court held, the C+s are negotia'le instruments. +he documents provide that the amounts deposited shall 'e repaya'le to the depositor. And !ho, according to the document, is the depositorA It is the ('earer.( +he documents do not say that the depositor is Angel de la Cru8 and that the amounts deposited are repaya'le specifically to him. 9ather, the amounts are to 'e repaya'le to the 'earer of the documents or, for that matter, !hosoever may 'e the 'earer at the time of presentment. If it !as really the intention of respondent 'an$ to pay the amount to Angel de la Cru8 only, it could have !ith facility so e"pressed that fact in clear and categorical terms in the documents, instead of having the !ord (=&A9&9( stamped on the space provided for the name of the depositor in each C+. En the !ordings of the documents, therefore, the amounts deposited are repaya'le to !hoever may 'e the 'earer thereof. +hus, petitioner#s aforesaid !itness merely declared that Angel de la Cru8 is the depositor (insofar as the 'an$ is concerned,( 'ut o'viously other parties not privy to the transaction 'et!een them !ould not 'e in a position to $no! that the depositor is not the 'earer stated in the C+s. -ence, the situation !ould re6uire any party dealing !ith the C+s to go 'ehind the plain import of !hat is !ritten thereon to unravel the agreement of the parties thereto through facts aliunde. +his need for resort to e"trinsic evidence is !hat is sought to 'e avoided 'y the ,egotia'le Instruments Ca! and calls for the application of the elementary rule that the interpretation of o'scure !ords or stipulations in a contract shall not favor the party !ho caused the o'scurity. 12 G.R. No. 744,1 May 2,, 1988 E!"ITAB#E BANING COR$ORATION, petitioner, vs. T%E %ONORAB#E INTERMEDIATE A$$E##ATE CO"RT an1 T%E ED2ARD J. NE## CO., respondents. %illiam &. 'eto for petitioner. (elaez, $driano & Gregorio for respondents. FACTS: