BPI EXPRESS CARD CORPORATION, petitioner, vs.
COURT OF APPEALS
and RICARDO J. MARASIGAN, respondents.
Transaction:
Nov. 22, 1989 – BECC demand payment of balance of credit card amounting
to P8,987.84. Plaintiff failed to settle his credit card balance which prompted
BECC to demand payment in order for the plaintiff to continue to use his
credit card.
Upon issuance of the post-dated check dated Dec. 15, 2989, to BECC on
Nov. 25, 1989, the employee hold onto it for a week before notifying the
Collections head that postdated check was issued by the plaintiff.
Confident that he complied with the obligation. He used the credit card in
Café Adriatico to entertain some guests. When it got declined, one of his
guests used her credit card to pay the tab.
Plaintiff cancelled the payout of the postdated check and asked for the bill to
be delivered to him and said to cancel whatever arrangement they had due
to BECC suspension of his credit card.
Plaintiff filed a case for damages against BECC.
RTC – there was grave abuse by BECC for failure to inform him that his card
was cancelled. Awarded Moral Damages 100K, Exemplary 50K, and Atty’s.
fees – 20K.
CA – affirmed with modification. Lowered in half.
NI involved:
Issued a postdated check worth 15K on December 15, 1989 to cover
previous and future transaction.
Parties:
BPI Express Card Company and Atty. Marasigan (BECC complimentary
member that has a credit limit of 3K from Feb 1988 – Feb 1989 and 5K from
Feb 1989 onwards)
Issue:
WON the issuance of the post-dated check, plaintiff complied with the
payment arrangement so that credit card will not be suspended. - NO
WON BECC abused its right when it cancelled the plaintiff’s credit card. - NO
Law applied:
Article 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.
Ruling:
1. As agreed upon by the parties, on the following day, private respondent
did issue a check for P15,000. However, the check was postdated 15
December 1989. Settled is the doctrine that a check is only a substitute
for money and not money, the delivery of such an instrument does not,
by itself operate as payment. (Roman Catholic Bishop of Malolos,
Inc. vs. IAC, 191 SCRA 411-1990) This is especially true in the case of
a postdated check.
Thus, the issuance by the private respondent of the postdated check
was not effective payment. It did not comply with his obligation under
the arrangement with Miss Lorenzo. Petitioner corporation was therefore
justified in suspending his credit card.
2. To find the existence of an abuse of right under Article 19 the following
elements must be present: (1) There is a legal right or duty; (2) which is
exercised in bad faith; (3) for the sole intent of prejudicing or injuring
another.
In the credit card application – non payment for 30 days, BECC can
automatically suspend the credit card. No need to inform cardholder.
Hence, no bad faith.
ANG TEK LIAN, petitioner,
vs.
THE COURT OF APPEALS, respondent.
Transaction:
It appears that, knowing he had no funds therefor, Ang Tek Lian drew on
Saturday, November 16, 1946, the check Exhibits A upon the China Banking
Corporation for the sum of P4,000, payable to the order of "cash". He
delivered it to Lee Hua Hong in exchange for money which the latter handed
in act. On November 18, 1946, the next business day, the check was
presented by Lee Hua Hong to the drawee bank for payment, but it was
dishonored for insufficiency of funds, the balance of the deposit of Ang Tek
Lian on both dates being P335 only.
NI Involved:
Check issued under China Bank Corporation payable in Cash
Parties:
Ang Tek Lian – Drawer
Lee Hua Hong – Bearer
Issue:
WON Ang Tek Lian is not guilty of estafa under the RPC because he issued
a Check payable to order of “Cash” and not in the name of Lee Hua Hong. -
NO
Law Applied:
Article 315, paragraph (d), subsection 2 of the Revised Penal Code,
punishes swindling committed "By post dating a check, or issuing such
check in payment of an obligation the offender knowing that at the time he
had no funds in the bank, or the funds deposited by him in the bank were not
sufficient to cover the amount of the check, and without informing the payee
of such circumstances".
Negotiable Instruments Law (sec. 9 [d], a check drawn payable to the order
of "cash" is a check payable to bearer, and the bank may pay it to the person
presenting it for payment without the drawer's indorsement.
Ruling:
A check payable to the order of cash is a bearer instrument.
Where a check is made payable to the order of "cash", the word cash "does
not purport to be the name of any person", and hence the instrument is
payable to bearer. The drawee bank need not obtain any indorsement of the
check, but may pay it to the person presenting it without any indorsement...
(Zollmann, Banks and Banking, Permanent Edition, Vol. 6, p. 494.)
Of course, if the bank is not sure of the bearer's identity or financial solvency,
it has the right to demand identification and /or assurance against possible
complications, — for instance, (a) forgery of drawer's signature, (b) loss of
the check by the rightful owner, (c) raising of the amount payable, etc. The
bank may therefore require, for its protection, that the indorsement of the
drawer — or of some other person known to it — be obtained. But where the
Bank is satisfied of the identity and /or the economic standing of the bearer
who tenders the check for collection, it will pay the instrument without further
question; and it would incur no liability to the drawer in thus acting.
A check payable to bearer is authority for payment to holder. Where a check
is in the ordinary form, and is payable to bearer, so that no indorsement is
required, a bank, to which it is presented for payment, need not have the
holder identified, and is not negligent in falling to do so. . . . (Michie on Banks
and Banking, Permanent Edition, Vol. 5, p. 343.)
. . . Consequently, a drawee bank to which a bearer check is presented for
payment need not necessarily have the holder identified and ordinarily may
not be charged with negligence in failing to do so. See Opinions 6C:2 and
6C:3 If the bank has no reasonable cause for suspecting any irregularity, it
will be protected in paying a bearer check, "no matter what facts unknown to
it may have occurred prior to the presentment." 1 Morse, Banks and
Banking, sec. 393.Although a bank is entitled to pay the amount of a bearer
check without further inquiry, it is entirely reasonable for the bank to insist
that holder give satisfactory proof of his identity. . . . (Paton's Digest, Vol. I, p.
1089.)
Anyway, it is significant, and conclusive, that the form of the check Exhibit A
was totally unconnected with its dishonor. The Court of Appeals declared
that it was returned unsatisfied because the drawer had insufficient funds—
not because the drawer's indorsement was lacking.
PHILIPPINE NATIONAL BANK, plaintiff-appellee,
vs.
CONCEPCION MINING COMPANY, INC., ET AL., defendants-
appellants.
Transaction:
PNB filed a case to recover from the defendants the face of a promissory
note which read: Manila, March 12, 1954
NINETY DAYS after date, for value received, I promise to pay to the order of
the Philippine National Bank . . . .
In case it is necessary to collect this note by or through an attorney-at-law,
the makers and indorsers shall pay ten percent (10%) of the amount due on
the note as attorney's fees, which in no case shall be less than P100.00
exclusive of all costs and fees allowed by law as stipulated in the contract of
real estate mortgage. Demand and Dishonor Waived. Holder may accept
partial payment reserving his right of recourse again each and all indorsers.
(Purpose — mining industry)
CONCEPCION MINING COMPANY, INC.,
By:
(Sgd.) VICENTE LEGARDA
President
(Sgd.) VICENTE LEGARDA
(Sgd.) JOSE S SARTE
"Please issue check to —
Mr. Jose S. Sarte"
One of the co-makers, Don Vicente Legarda died and the defendants want
to include the estate of the deceased as a party-defendant.
NI Involved: Concepcion Mining issued a promissory note, pay to order to
PNB for a check issued by PNB to Mr. Jose Sarte.
Parties: PNB, Concepcion Mining Inc, Jose Sarte
Issue: WON the effects of the judgment be suspended for the reason that
the deceased Vicente L. Legarda should have been included as a party-
defendant and his liability should be determined in pursuance of the
provisions of the promissory note. - NO
Law Applied:
SEC. 17. Construction where instrument is ambiguous. — Where the
language of the instrument is ambiguous or there are omissions therein, the
following rules of construction apply:x x x xxx xxx
(g) Where an instrument containing the word "I promise to pay" is signed by
two or more persons, they are deemed to be jointly and severally liable
thereon.
ART. 1216. The creditor may proceed against any one of the solidary
debtors or some of them simultaneously. The demand made against one of
them shall not be an obstacle to those which may subsequently be directed
against the others so long as the debt has not been fully collected.
Ruling:
Applying the provisions, and as the promissory note was executed jointly
and severally by the same parties, namely, Concepcion Mining Company,
Inc. and Vicente L. Legarda and Jose S. Sarte, the payee of the
promissory note had the right to hold any one or any two of the signers
of the promissory note responsible for the payment of the amount of
the note. This judgment of the lower court should be affirmed.
Our attention has been attracted to the discrepancies in the printed record
on appeal. We note, first, that the names of the defendants, who are
evidently the Concepcion Mining Co., Inc. and Jose S. Sarte, do not appear
in the printed record on appeal. The title of the complaint set forth in the
record on appeal does not contain the name of Jose Sarte, when it should,
as two defendants are named in the complaint and the only defense of the
defendants is the non-inclusion of the deceased Vicente L. Legarda as a
defendant in the action. We also note that the copy of the promissory note
which is set forth in the record on appeal does not contain the name of the
third maker Jose S. Sarte. Fortunately, the brief of appellee on page 4 sets
forth said name of Jose S. Sarte as one of the co-maker of the promissory
note. Evidently, there is an attempt to mislead the court into believing that
Jose S. Sarte is not one of the co-makers. The attorney for the defendants
Atty. Jose S. Sarte himself and he should be held primarily responsible for
the correctness of the record on appeal. We, therefore, order the said Atty.
Jose S. Sarte to explain why in his record on appeal his own name as one of
the defendants does not appear and neither does his name appear as one of
the co-signers of the promissory note in question. So ordered.