Professional Documents
Culture Documents
Course Outline
MZR Villanueva-Castro
PRELIMINARY CONSIDERATIONS
1. Governing laws
CASES: Phil. Educ. Co., Inc. vs. Soriano, 39 SCRA 587; Tibajia, Jr.
vs. CA, 223 SCRA 163; Philippine Airlines vs. CA, 181 SCRA 557
CASE: Ang Tek Lian vs. CA, 87 Phil. 383; PNB vs. Rodriguez,
G.R. No. 170325, September 26, 2008
CASE: Philippine National Bank vs. Manila Oil Refining & By-
Products Company, 43 Phil 445
CASES: Republic Planters Bank vs. CA, 216 SCRA 738; Sps.
Evangelista vs. Mercator Finance Corp., et al, August 21, 2003;
Ilano vs. Hon. Espanol, G.R. No. 161756, 16 December 2005
NEGOTIATION
1. Modes of transfer
CASES: Read again: Sesbreo vs. CA, 222 SCRA 466; Consolidated
Plywood Inc. vs. IFC Leasing 149 SCRA 448
4. Concept of delivery
2
CASES: De la Victoria vs. Hon. Burgos, 245 SCRA 374; Development
Bank of Rizal vs. Sima Wei, 219 SCRA 736
5. Indorsement
a. concept
b. how made (Sec. 31 & 32, NIL)
c. kinds:
(1) special and blank (Sec. 34 & 35, NIL)
(2) conditional (Sec. 39, NIL)
(3) qualified (Sec. 38, NIL)
(4) restrictive (Sec. 36 & 37, NIL)
d. other rules on indorsement
(1) indorsement of an instrument payable to bearer (Sec. 40,
NIL)
(2) where instrument is payable to two or more persons (Sec.
21, NIL)
(3) instrument is drawn or indorsed to a person as cashier
(Sec. 42, NIL)
(4) where name of payee or indorsee is misspelled (Sec. 43,
NIL)
(5) indorsement in a representative capacity (Sec. 44, NIL)
(6) presumption as to time of indorsement (Sec. 45, NIL)
(7) place of indorsement (Sec. 46, NIL)
(8) striking out of indorsement (Sec. 48, NIL)
(9) transfer of an order instrument without indorsement (Sec.
49, NIL)
HOLDERS
CASES: De Ocampo vs. Gatchalian, 03 SCRA 596; Yang vs. CA, G.R.
No. 138074, August 15, 2003; Mesina vs. IAC, 145 SCRA 497
3
LIABILITY OF PARTIES
CASES: Philippine National Bank vs. Picornell, et al, 46 Phil 716; Astro
Electronics vs. Roxas, et al., September 23, 2003; Garcia vs. Dionisio,
December 8, 2003; Crisologo-Jose vs. CA, Sept. 15, 1989; Sadaya vs.
Sevilla, 19 SCRA 924; Travel-On vs. CA, 210 SCRA 352; Agro-
Conglomerates Inc. vs. CA, 348 SCRA 350; Gonzales vs. RCBC, 29
November 2006; Ang vs. Associated Bank, 05 September 2007; Far East
vs. Gold Palace Jewelry, G.R. No. 168274, August 20, 2008
DEFENSES
2. Real defenses:
a. minority and ultra vires acts (Sec. 22, NIL)
b. non-delivery of an incomplete instrument (Sec. 15, NIL)
c. fraud in factum
d. forgery and want of authority (Sec. 23, NIL)
(1) forgery of makers signature
(2) of indorsers signature
(3) of drawers signature
(4) forgery of bearer instruments
3. Personal defenses:
a. ante-dating or post-dating (Sec. 12, NIL)
4
b. insertion of wrong date (Sec. 13, NIL)
c. filling-up blanks beyond authority (Sec. 14, NIL)
d. want of delivery of a complete instrument (Sec. 16, NIL)
e. absence or failure of consideration (Sec. 28, NIL)
f. simple fraud, duress, intimidation, force or fear, illegality
of consideration, breach of faith (Sec. 55, 56 & 57, NIL)
CASES: Salas vs. CA, January 22, 1990; Philippine National Bank vs. CA,
256 SCRA 491; International Corporate Bank vs. CA, 05 September 2006;
Associated Bank vs. CA, January 31, 1996; Jai-Alai vs. BPI, 66 SCRA 29;
Republic vs. Ebrada, July 31, 1975; Philippine National Bank vs. Quimpo,
March 14, 1988; Gempesaw vs. CA, February 9, 1993; Philippine
Commercial International Bank vs. Court of Appeals, 350 SCRA 446;
MWSS vs. CA, 143 SCRA 20; Ilusorio vs. CA, 393 SCRA 89; Samsung
Construction vs. Far East Bank, 15 August 2004; Metrobank vs. Cabilzo,
06 December 2006; Bank of America vs. Philippine Racing Club, G.R. No.
150228, July 20, 2009
ENFORCEMENT OF LIABILITY
5
(b) rule in case party primarily liable is already dead
(Sec. 76, NIL)
(c) presentment to partners (Sec. 77, NIL)
(d) presentment to joint debtors (Sec. 78, NIL)
4. Notice of dishonor
a. when dishonor of the instrument occurs:
(1) dishonor by non-payment (Sec. 83, NIL)
(2) dishonor by non-acceptance (Sec. 149, NIL)
c. who should give notice
(1) holder
(2) agent
(3) party who may be compelled to pay
d. form of notice (Sec. 43 & 44, NIL)
e. to whom notice is given
(1) party secondarily liable or agent (Sec. 97, NIL)
(2) notice where party is dead (Sec. 98, NIL)
(3) notice to partners (Sec. 99, NIL)
(4) notice to persons jointly liable (Sec. 100, NIL)
(5) notice to bankrupt (Sec. 101, NIL)
CASES: Far East Realty Investment, Inc. vs. CA, 166 SCRA 256; Wong vs.
CA, February 2, 2001; International Corporate Bank vs. Sps. Gueco,
February 12, 2001; Far East Realty vs. CA, October 5, 1988; State
Investment House vs. CA, 217 SCRA 32; Asia Banking Corporation vs.
Javier, 44 Phil 777; Nyco Sales Corporation vs. BA Finance Corporation,
200 SCRA 637; Arceo, Jr. vs. People of the Philippines, G.R. No. 142641,
17 July 2006; Allied Banking vs. CA, GG Sportswear, 11 July 2006
DISCHARGE OF INSTRUMENTS
1. Concept of discharge
2. How instrument is discharged (Sec. 119, NIL)
a. payment in due course (Sec. 88, NIL)
(1) by the principal debtor (Sec. 119 [a])
(2) by the accommodated party (Sec. 119[b])
b. intentional cancellation
(1) rule in case of unintentional cancellation (Sec. 123,
NIL)
c. any act that discharge simple contracts
d. principal debtor becomes a holder
6
CHECKS
CASES: New Pacific Timber vs. Hon. Seneris, December 19, 1980; PNB vs.
National City Bank of New York, 63 Phil 711; Bataan Cigar vs. CA, 230
SCRA 648; Stelco Marketing Corporation vs. CA, June 17, 1992; State
Investment House vs. CA, 175 SCRA 311; Papa vs. A.U. Valencia, 284
SCRA 643; Villanueva vs. Nite, G.R. No. 148211, 25 July 2006; Equitable
PCI vs. Ong, 15 September 2006; Security Bank & Trust Company vs.
RCBC, G.R. Nos. 170984 & 170987, January 30, 2009
7
8