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NI is a written contract for the payment of F. Negotiable Instruments compared with other
money intended as a substitute for money, and papers:
it passes from one person to another just like
money in such a manner as to constitute a There are certain documents of title with limited
holder in due course to enforce payment free negotiability which are also widely used in
from equitable or personal defenses against commercial transactions but have been held to
parties prior to him. be non-negotiable because they do not have the
requisites that are essential under the NIL. They
C. Classes of negotiable instruments are beyond the scope of the NIL and are,
therefore, governed by other laws. Among such
a. Promissory note are:
An unconditional promise in writing made by
one person to another, signed by the maker, a. Document of title
engaging to pay on demand, or at a fixed or
b. Letter of Credit Filriters registered owner of Central Bank
A letter from a merchant or bank or banker Certificate of Indebtedness (CBCI). Filriters
in one place, addressed to another, in transferred it to Philfinance by one of its
another place or country requesting the officers without authorization from the
addressee to pay money or deliver goods to company. Subsequently, Philfinance
a third party therein named, the writer of transferred same CBCI to Traders Royal Bank
the letter undertaking to provide him the (TRB) under a repurchase agreement. When
money for the goods or to repay him. It is a Philfinance failed to do so, The TRB tried to
letter requesting one person to make register in its name in the CBCI. The Central
advances to a third person on the credit of Bank did not want to recognize the transfer.
the writer.
Docketed as Civil Case No. 83-17966 in the
c. Certificate of stock Regional Trial Court of Manila, Branch 32,
It is a written instrument signed by a proper the action was originally filed as a Petition
officer of a corporation stating that the for Mandamus 5 under Rule 65 of the Rules
person named therein is the owner of a of Court, to compel the Central Bank of the
designated number of shares of its stock. It is Philippines to register the transfer of the
also without an unconditional promise or subject CBCI to petitioner Traders Royal
order to pay a sum certain in money. Bank (TRB).
Before the instruments become negotiable Likewise, respondent judge sustained the
instruments, the instrument must conform contention of the private respondent that he
to the requirements under the Negotiable has a right to refuse payment of the amount
Instrument Law. Otherwise instrument shall of P13, 130 in cash because the said amount
not bind the parties. is less than the judgment obligation, which is
a partial payment as provided in Article 1248
2. New Pacific Timber vs Seneris of the New Civil Code.
Facts
In a complaint for a collection of sum of Petitioner filed an ex-parte motion for
money, petitioner failed to comply with his issuance of certificate of satisfaction of
judgment after his levied properties were all 130.00 in cash covers the judgment
sold during the auction sale. Petitioner obligation of P63,000.00 as mentioned in the
question the order of the judge for denial of writ of execution, then, we see no valid
the said motion alleging that said judge reason for the private respondent to have
capriciously and whimsically abused his refused acceptance of the payment of the
discretion on the ground that there was obligation in his favor.
already a full satisfaction of the judgment
before the auction sale was conducted. 3. Roman Catholic Church of Malolos vs IAC
FACTS:
Issue: July 7, 1971: A contract over the land
WON there was a valid refusal to accept the was executed between the Roman
payment of the judgment obligation made Catholic Bishop of Malolos (bishop) as
by the petitioner consisting of P50, 000.00 in vendor and the through its then
Cashier’s Check and P13, 130.00 in cash. president, Mr. Carlos F. Robes, as
vendee, stipulating for a downpayment
Held: of P23,930 and the balance of P100,000
No. A cashier’s check of the Equitable Bank plus 12% interest per annum to be paid
Corporation is not an ordinary check. It is a within 4 years from execution of the
well-known and accepted practice in the contract.
business sector that a Cashier’s Check is The contract likewise provides for
deemed as cash. cancellation, forfeiture of previous
payments, and reconveyance of the land
Where a check is certified by the bank on in case of failure to pay within the period
which it is drawn, the certification is March 12, 1973: private respondent,
equivalent to acceptance. By the through its new president, Atty. Adalia
certification of drawee bank, the funds Francisco, addressed a letter 6 to Father
represented by the check are transferred Vasquez, parish priest of San Jose Del
from the credit of the maker to that of the Monte, Bulacan, requesting to be
payee or holder, and for all intents and furnished with a copy of the subject
purposes, the latter becomes the depositor contract and the supporting documents
of the drawee bank. Said certification implies July 17, 1975: after the expiration of the
that the check is drawn upon sufficient funds stipulated period for payment, Atty.
in the hands of the drawee that they have Francisco wrote the formal request that
been set apart for its satisfaction, that they her company be allowed to pay the
shall be so applied whenever the check is principal amount of P100,000 in 3 equal
presented for payment. The object of installments of 6 months each with the
certifying a check, as regards to both parties, 1st installment and the accrued interest
is to enable the holder to use it as money. of P24,000 to be paid immediately upon
When the holder procures the check to be approval
certified, the check operates as an July 29, 1975: Bishop through its counsel,
assignment of a part of the funds to the Atty. Carmelo Fernandez, formally
creditors. Certification of a check is an denied the request but granted a grace
exception to the rule enunciated under Sec period of 5 days from the receipt of the
63 of the CB Act. denial to pay the total balance of
P124,000
Considering that the whole amount August 4, 1975: private respondent,
deposited by the petitioner consisting of through its president, Atty. Francisco,
Cashier’s Check of P50, 000.00 and P13,
wrote the counsel of the petitioner
requesting an extension of 30 days from
to fully settle its account. – denied
RTC: favored Bishop declaring the down
payment as forfeited
ISSUE:
W/N there is tender of payment by issuance
of a certified check
HELD: NO. RTC reinstated.
Tender of payment involves a positive
and unconditional act by the obligor of
offering legal tender currency as
payment to the obligee for the former’s
obligation and demanding that the latter
accept the same.
tender of payment cannot be presumed
by a mere inference from surrounding
circumstances
sheer proof of sufficient available funds
to meet more than the total obligation
within the grace period - NOT sufficient
On the contrary, the respondent court
finds itself remiss in overlooking or
taking lightly the more important
findings of fact made by the trial court
which are entitled to great weight on
appeal and should be accorded full
consideration and respect and should
not be disturbed unless for strong and
cogent reasons
certified personal check which is not
legal tender nor the currency stipulated,
and therefore, can not constitute valid
tender of payment
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
4. Osmena vs Citibank
5. BPI Express Card Corporation vs CA
6. Philippine Bank of Commerce vs Aruego
7. Philippine Airline vs CA