NEGOTI ABLEI NTRUME M ENTSLAW LLB4202Cas eDi ges t sComp mpi l at i on
SAN MI GUELCOR ORPORATI ON VS. BARTOLOMEPUZON J R. G. R.No .1 6 7 5 6 7 S e pt e mb mb e r2 2 , 2 0 1 0 FACTS:
Re s pondent Puzon was a dea l e r of be e r pr oduc t s of pe t i t i oner SMC MC f orPar añaqueCi t y.Puzonpur c has edSMC MCpr oduc t sonc r edi t .Toensur epayme mentand a sabus i ne s spr a c t i c e ,S MC MC r e qui r e dhi mt oi s s uepos t da t e dc h e c kse q ui v a l e ntt ot he v a l ueoft hepr o duc t spur c h a s e do nc r e di tb e f o r et hes a me mewe we r er e l e a s e dt ohi m.Sa i d c hec kswe wer er et ur nedt oPuzon whent het r ans ac t i onsc over edbyt hes echeckswer e pai dors e t t l e di nf ul l . S ub s e q ue nt l y ,Puz o npur c h a s e dpr o duc t so nc r e di ta mo mo unt i ngt oP1 1 , 8 2 0 , 3 2 7f o r whi c hhei s s ued,andgavet oSMC MC,BPIChec kNos.27904( f orP309, 500. 00)and27903 ( f orP1 1, 51 0, 8 27. 0 0)t oc ove rt hes a i dt r ans a c t i on. Puzonvi s i t edSM MC Coffi ffic c eandwhi l eont hes am me epl ac e,t hef or merr eques t edt os eeBPI Chec k No.17 65 7.Howe ve r ,whenhegothol d ofBPIChec k No.27 90 3whi c h was a t t a c h e dt oabo ndpa pe rt o ge t he rwi t hBPIChe c kNo .1 7 6 5 7hea l l e g e dl yi mme di a t e l y l e f tt heoffic ewi wi t hhi sa c c o unt a nt ,br i ngi ngt hec he c k swi wi t ht he m. m. S MC MC s e n tade ma ma ndl e t t e rt oPuz o n,ho we we v e r ,t hel a t t e ri g no r e di t .Thus ,S MC MC fil e dac o mp mpl a i nt . I SSUE:
Whet hert hepost dat edc hec kswer ei s s uedbyPuzoni npayme mentofhi sbee rpur chas es orwe r eus e dme r e l ya ss e c ur i t yt oe ns ur epa yme ntofhi sobl i ga t i on.
HELD: THECHE HECK WASNOTGI VEN ASPAYME MENTOFRESPONDENT’ SOBLI GATI ON.
Todet er mi newhet hert heown wner s hi p oft hes ubj ec tc hec k wast r ansf er r ed t o SMC MC,i ti sRELEVANTt oc ons i dert heI NTENTOFTHERESPON ONDENT NT.Ont hi spoi nt , t heNe g ot i a b l eI ns t r ume ntLa w pr o vi de s : 1
Ca s t i l l o, Ma r kAng e l oB.
NEGOTI ABLEI NTRUMENTSLAW LLB4202Cas eDi ges t sCompi l at i on
Se c .1 2 .Ant e d a t e da ndp o s t d a t e d–Th ei ns t r u me n ti sno ti nv a l i df o rt h er e a s o no nl y t h a ti ti sa nt e d a t e do rpo s t d a t e d ,p r o v i d e dt h i si sno td o nef o ra ni l l e g a lo rf r a ud ul e n t p ur p o s e .Th ep e r s o nt owh o ma ni ns t r ume nts od a t e di sd e l i v e r e da c q ui r e st h et i t l e t h e r e t oa so f t h ed a t eo fd e l i v e r y . ( Und e r s c o r i ngs up p l i e d . ) I tmus tbeemphas i zed t hatt het er m “del i ver y” us ed i nt heaf or ement i oned pr ovi s i on meanst hatt hepar t y del i ver i ng di ds of ort hepur poseofgi vi ng effec t t he r e t o.Ot he r wi s e ,i tc a n no tbes a i dt ha tt he r eha sbe e n de l i v e r yo ft hene g ot i a bl e i ns t r ume nt .Onc et he r ei sde l i v e r y , t hepe r s o nt owhom t hei ns t r ume nti sde l i v e r e dge t s t het i t l et ot hei ns t r ume ntc ompl e t e l ya ndi r r e voc a bl y . Toappl y ,i ft hesubj ec tc hec kwasgi venbyPuzont oSMC i npa ymentoft he obl i ga t i on,t hepur pos eofg i vi nge ffe c tt ot hei ns t r ume nti se vi de ntt hust i t l et oor o wne r s hi po ft hec he c kwa st r a ns f e r r e dupo nde l i v e r y .Howeve r ,i ft hec hec kwasnot gi ven aspayment ,t her e bei ng no i nt entt o gi ve effec tt ot he i ns t r ument ,t hen owner s hi poft hec hec kwasnott r ans f er r edt oSMC. Thee v i de n c eofS MC f a i l e dt oe s t a b l i s ht ha tt hec h e c kwa sg i v e ni npa y me nto f t heobl i ga t i onofPuz on.The r ewa snopr o vi s i ona lr e c e i ptoro ffic i a lr e c e i pti s s ue df or t he amount of t he c he c k.Wha t was i s s ue d was a r e c e i pt f or t h ed o c u me nt , a“POSTDATED CHECKSLI P . ” yment F ur t he r mor e , t hee v i de nc epr o ve st ha tt hec h e c kwa sa c c e p t e d,notaspa , buti n a c c or da nc ewi t ht hel o ngs t a ndi ngpol i c yo fS MC t or e qui r ei t sde a l e r st oi s s u epos t da t e d c h e c kst oc o v e ri t sr e c e i v abl e s .Thec he c kwa so nl yme a ntt oc o v e r t het r a ns a c t i ona ndi nt he me ant i mePuzon wast o pay f ort he t r ans ac t i on by s omeot herme ansot hert han t he c he c k .Thi sbe i ngs o, t i t l et ot hec h e c kdi dnott r a ns f e rt oSMC; i tr e ma i ne dwi t hPuz on.
He nc e ,t hec he c k swa sno tgi v e na spa yme nto fr e s po nde nt ’ so b l i g a t i o nb utwe r eus e d me r e l ya ss e c ur i t yt oe ns ur epa yme nto fhi so b l i g a t i o n.
2
Ca s t i l l o, Ma r kAng e l oB.
