NEGOTIABLE INSTRUMENTS NOTES

BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES

Page 80 of 190


BY: MA. ANGELA LEONOR C. AGUINALDO
ATENEO LAW 2D BATCH 2010
88 PHIL 178

FACTS:
*Remember the case with the Japanese occupation and the mutilated
check.

HELD:
Montinola could not be considered as a holder in due course. Why? For
one to be a holder in due course, one should take the instrument before it
has become overdue. Remember that in this case, Montinola took the
check which has long become overdue. He cannot even be in the slightest
be considered as a holder because the NIL defines a holder as being the
payee or the indorsee of the negotiable instrument. In this case, he wasn't
the payee nor was he the indorsee of the check in issue.

104 PEOPLE V. MANIEGO
148 SCRA 30

FACTS:
The accused were charged and later on found guilty of committing
malversation. Ubay was the disbursing officer in the Office of the Chief of
Finance in a military camp and together with his co-accused, were able to
take personal checks drawn against the PNB and BPI, of which Pamintuan
was the drawer and Maniego was the indorser. The checks were encashed
and used, to the prejudice of the government.

Maniego averred that the trial court erred in adjudging her as liable as an
indorser to the government.

HELD:
The contention of Maniego that as a mere indorser, she may not be liable
on account of the dishonor of the checks indorsed by her is untenable. The
holder or last indorsee of a negotiable instrument has the right to enforce
payment of the instrument for the full amount thereof and against all
parties liable thereon. Among the parties liable thereon is the indorser
unless he clearly indicates that his intention to be bound in some other
capacity. Maniego may also be considered as an accommodation party and
as such, is liable to a holder for value notwithstanding if the holder knew
that she was only an accommodation party.

105 UCPB V. IAC
183 SCRA 38

FACTS:
Petitioner bank issued a managers check in favor of Makati Bel-Air as
purchased by Altiura as payment for a condominium unit. Thereafter,
Altiura requested the bank to hold payment as there was a discrepancy
between the areas of the unit purchased to what has been agreed upon.
The bank then told Makati Bel-Air of this request. This request happened
two times. On the second time, Bel-Air denied such request, which
prompted the bank to file a complaint-interpleader so that the two other
parties could settle their claims with one another. This led to a civil case
and another. Altiura filed for rescission of the contract between him and
Bel-Air. Bel-Air filed counterclaims against the bank and Altiura. During
the pendency of these actions, the bank moved that it first deposit the
amount of the check in a special account, which was approved by the trial
court. Later on, it moved for the dismissal of the complaint it filed for the
reason that there is no more conflict between Altiura and Bel-Air. Bel-Air
returned the check to the bank. In resolving the motion to withdraw, the
court held that the motion is rendered moot and academic by its earlier
order ordering the bank to return the amount to Altiura. This was
appealed by the bank.

HELD:
Makati Bel-Air was a party to the contract of sale of the office condominium
unit to Altiura. Accordingly, it was aware that at the time it had received
the managers check, that there was or had arisen at least partial failure of
consideration since it was unable to comply with its obligation to deliver
the office space to Altiura. Makati Bel-Air was also aware that the bank
had been informed of the claimed defect in its title to the check or of its
right to the proceeds thereof. Vis a vis both Altiura and the bank, Makati
Bel-Air cannot be considered as a holder in due course.

106 YANG V. COURT OF APPEALS
409 SCRA 159

FACTS:
Yang and Chandimari entered into an agreement that the latter would issue
to the former a managers check in exchange for two checks that Yang has
payable to the order of David. The difference in amount would be the
profit of the two of them. It was further agreed upon that Yang would
secure a dollar draft, which Chandimari would exchange with another dollar
draft to be secured from a Hong Kong bank. At the agreed time of
rendezvous, it was reported by Yangs messenger that Chandimari didn't
show up and the drafts and checks were allegedly stolen. This wasn't true
however. Chandimari was able to get hold of the drafts and checks. He
was even able to deliver to David the two checks and was able to get
money in return. Consequently, Yang asked for the stoppage of payment