SAN MIGUEL v. PUZON, JR.

G.R. No. 167567

September 22, 2010
Related law: Sec. 16; Sec. 12; NIL; Delivery for the purpose of giving e ect to an
instrument (i.e. for payment)
Question: Puzon was a dealer of San Miguel Corporation (SMC). Puzon
purchased SMC products on credit. SMC requires him to issue postdated
checks equivalent to the value of the products purchased to ensure payment.
The checks are to be return to Puzon once he settles his credit. In one instance,
Puzon went to SMC Sales Oce and allegedly requested to see particular
checks that he gave to SMC. When he got hold of them, he allegedly
immediately left the oce with the checks. SMC demanded for the return of the
checks which Puzon ignored. As such, SMC led a complaint against him for
theft. The prosecutor however found no probable cause for theft because of SMC
and Puzon relationship as one of creditor-debtor. Did SMC acquire title over the
checks issued by Puzon?
Answer: No. SMC did not acquire title over the postdated checks issued.
According to the Sec. 12 of the NIL, the person to whom an instrument is
delivered acquires the title to it. The delivery mentioned in Sec. 12 must be read
in conjunction with Sec. 16 of the NIL which says that the delivery must be for the
purpose of giving eect to the instrument. Since the checks were given merely
as security and not as payment for the credit, then the checks were not delivered
so as to give eect to them. As such, ownership was not transferred to SMC.
Hence, the checks that Puzon allegedly took were not properties belonging to
another. Consequently, there is no probable cause for theft.