BASED ON AGBAYANIS BOOK AND ATTY. MERCADOS LECTURES
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BY: MA. ANGELA LEONOR C. AGUINALDO ATENEO LAW 2D BATCH 2010 ! On the other hand, mere payment of the paper at the termination of its course doesnt act as an act of estoppel ! Payment is the final act which extinguishes a bill ! Acceptance is the promise to pay in the future and continues the life of the bill
RIGHT OF THE HOLDER TO SUE DRAWER WHERE CHECK NOT CERTIFIED ! The drawer of a check certifies that it will be paid on presentment but not that it will be certified ! This is the theory on which the law discharging the drawer and indorsers upon certification is based ! Certification is different from acceptance in that the refusal of the drawee bank to certify doesnt amount to a dishonor of the check ! There is no need for a notice of non-certification and the check must still be presented for paymenht
CASE DIGESTS: SECTION 187
187 PANLILIO V. DAVID 50 PHIL 105
FACTS: Panlilio and David are both bidders for lease of a big chunk of land owned by the government. Panlilio had a higher bid than David. Both of their bids were accompanied by uncertified checks, the amount for Davids is lesser than that of Panlilios. Later, David equaled the bid of Panlilo by adding cash to the amount of his check. With this, the lease was awarded to David. His check was encashed and the proceeds were deposited with the Treasury. This award was questioned by Panlilio by averting that the bid of David should have been denied since the check he offered was uncertified. This prompted the withdrawal of the award to David and instead, the lease was awarded to Panlilio, whom it was thought to have submitted a certified check. After knowing that he too didnt have a certified check, his award was cancelled. Both appealed this to the appellate court.
HELD: The rule that the check to be offered should be certified is an office rule. It sought to prevent the presentation of frivolous bids and to avoid difficulties in the collection of the amount of the accepted bid. The Director of Lands therefore had the authority to reject both bids in question on the ground that they werent accompanied by certified checks. Nonetheless, this doesnt mean that if he accepted one of them, a merely formal defect would vitiate the award. When Davids bid was accepted and the amount of the bid was paid and covered into the Treasury, the government could hardly be heard to say that the award was invalid because the amount paid was originally represented in part by an uncertified check.
188 NEW PACIFIC TIMBER V. SENERIS 101 SCRA 686
FACTS: New Pacific Timber and Supply was the defendant in a case for collection of money. Upon failure to comply with the compromise agreement, a writ of execution was issued and its properties were levied. Prior though to the auction sale, petitioner deposited with the trial court a cashiers check but private respondent refused to accept.
HELD: The check deposited by the petitioner is no ordinary check but a cashiers check. It is a well-known and accepted practice in the business sector that a cashiers check is deemed as cash. Moreover, since the said check had been certified by the drawee bank, by the certification, the funds represented by the check are transferred from the credit of the maker to that of the payee or holder, and for all intents and purposes, the latter becomes the depositor of the drawee bank, with rights and duties of one in such situation. The certification by the bank is equivalent to acceptance. It is an understanding that the check is good then, and shall continuegood, and this agreement is binding on the bank as its notes in circulation, a certificate of deposit payable to the order of the depositor, or any other obligation it can assume. The object of certifying the check as regards both parties is to enable the holder to use it as money. Hence the exception to the rule on Section 64 of the CB Act to the effect that a check which has been cleared and credited to the account of the creditor shall be equivalent to a delivery to a creditor in cash in an amount equal to the amount credited to his account shall apply in this case.
189 PNB V. NATIONAL CITY BANK OF NY 63 PHIL 711
FACTS: Unknown persons negotiated with Motor Services Company checks, which were part of the stipulation in payment of automobile tires purchased from the latters store. It purported to have been issued by Pangasinan Transportation Company. The said checks were indorsed at the back by said unknown persons, the Motor company believing at that time that the signatures contained therein were genuine. The checks were later deposited with the companys account in National City Bank of NY. The
The Small-Business Guide to Government Contracts: How to Comply with the Key Rules and Regulations . . . and Avoid Terminated Agreements, Fines, or Worse