Caltex (philippines ),inc. vs.

Court of appeals and Security Bank and Trust company FACTS Security Bank and Trust Company issued 280 Certificates of Time Deposit in favor Angel de la Cruz who deposited with the said bank the amount 1,120,000.00. De la Cruz delivered said CTDs to Caltex (Phil) Inc. in connection with his purchased of fuel products from the latter. A portion of CTDs include: This is to Certify that BEARER has deposited in this Bank the sum of PESOS: FOUR THOUSAND ONLY, xxx , repayable to said depositor xxx. Later on, de la Cruz informed the bank that he lost all said CTD. In accordance with respondent banks procedure, de la Cruz executed and delivered said bank the Affidavit of Loss. Thereafter, 280 replacements CTDs were issued to him. Angel de la Cruz negotiated and obtained a loan from defendant bank in amount of 875,000. On the same date, said depositor executed a notarized Deed of Assignment of Time Deposit in favor of the defendant bank.. However, Caltex, went to the defendant bank and presented for verification the CTDs declared lost by Angel alleging the same were delivered to Caltex as security for purchase made with Caltex Phil, by said depositor. Caltex sent a letter to the bank informing of its possession of the CTDs and of its ask to pre-terminate the same . Not having finish the copy of requested document evidencing the guarantee agreement, the bank rejected the petitioners demand and claim for payment, when the loan of said Angel de la Cruz mature and fell due, the bank set-off and applied the time deposits to the payment of the same. The petitioner filed a complaint praying the defendant bank be ordered to pay the value of the said CTDs plus interest. The trial court dismissed the instant complaint. On appeal, the court affirmed the lower courts decision. Hence, petition for review on certiorari wherein petitioner faults respondent court in ruling the subject

certificate of deposit are non-negotiable despite being clearly negotiable instruments. ISSUE Whether or not the CTDs in question is payable to bearer, who is the depositor indicated therein which will render the same non-negotiable. HELD No. The court hold that the CTDs in question are negotiable instruments said CTDs meet the requirements of law for negotiability. The documents provide that the amounts deposited shall be repayable to the depositor. According to the document, the depositor is the bearer. The document did not say that said Angel de la Cruz is the depositor and the amounts are repayable specifically to him. Rather, the amounts are to be repayable to the bearer of the documents or for that matter, whoever may be the bearer at the time of presentment. The accepted rule is that the negotiability or non-negotiability of an instrument is determined from the writing, that is, from the face of the instrument itself. In the construction of a bill or note, the intention of the parties is to control, if it can legally ascertained. While the writing may be read in the light surrounding circumstances in order to more perfectly understand the intent and meaning of the parties, yet as they have constituted the writing to be the only outward and expression of their meaning, no other words are to be added to it or substituted in its stead. The duty of the court in such case to ascertain, not what the parties may have secretly intended as contradistinguished from what their words express. But what is the meaning of the words they have used. What the parties meant must be determined by what they said.

Juanita salas vs. hon.court of appeals and first finance and leasing corporation FACTS Petitioner Salas bought certain vehicle from VMS Corp. for 58,138,200, as evidenced by a promissory note. This note was subsequently endorsed to Filinvest Finance and Leasing Corporation which financed the purchase. Petitioner defaulted in her installments due to a discrepancy in the engine in the sales invoice. Certificate of registration and declared of chattel mortgage, which fact she discovered when the vehicle figured in accident. The respondent corporation filed an action for a sum of money before RTC for failure to pay. The trial court rendered decision in favor of the defendant corporation, ordering to pay the latter 28,114,40 with interest therein at a rate of 14%. Both parties appealed the said decision. Petitioner prayed for the reversal of the trial courts decision on the ground of fraud, bad faith and misrepresentation of VMS for having delivered a different vehicle. The CA modified the appealed decision ordering the petitioner to pay instead remaining balance of assumed amount for the purchase of motor vehicle. However, said decision was reversed later on, with the same court ordering VMS instead to return to petitioner sum of 7,855,70. Said decision was pending consideration upon appeal by VMS.

ISSUE: Within the promissory note in question is a negotiable instrument which will bar completely all the defenses of the petitioner against private respondent

HELD A careful study of the questioned promissory note shows that it is a negotiable instrument, having complied with the requisites under the NIL as follows; (a) it is in writing and signed by the maker Juanita Salas; (b) it contains an unconditional promise to pay the amount of 58,138.20; (c) it is a payable at fixed or determinable future time which is p1,614.95 monthly for 36 months due and payable on the 21st day of each month starting March 21, 1980 thru and inclusive Feb. 21,1983.. (d) it is payable toVMS Corp, or order and as such, (e) the drawee is named or indicated with certainty. It was negotiated by indorsement in writing on the instrument itself payable to the order of Filinvest Finance and leasing corporation and it is an indorsement of the entire instrument.