PHILIPPINE EDUCATION CO., INC., vs. MAURICIO A.
amount represented by the money order in question had
SORIANO, ET AL., | G.R. No. L-22405, June 30, 1971
FACTS:
On April 18, 1958, Enrique Montinola purchased 10 money
orders of P200 each payable to E.P. Montinola from the
Manila Post Office. For payment therefor, he offered a
private check. However, since a private check is not a
generally accepted payment for money orders, he was
advised to see the Chief of the M.O Division. However, he
was able to leave the building instead with the 10 M.O.
without having paid. On the same date, an urgent
message was sent informing postmasters as well as banks
not to pay anyone of the M.O. aforesaid if presented for
payment. The Bank of America received a copy of the
same.
On April 23, 1958, one of the money orders was received
by appellant as part of its sales receipts. It deposited the
same the following day with the Bank of America, and one
day thereafter the latter cleared it with the Bureau of
Posts and received from the latter its face value of P200.
On September 27, 1961, Mauricio Soriano, chief of the
M.O division, notified the bank of America that the M.O.
had been found to have been irregularly issued and the
amount it represented had been deducted from the banks
clearing account. Thus, the bank debited the petitioners
account for the same amount.
Hence, this suit. The lower court ruled in favor of
petitioner and ordered that the defendants countermand
the notice given to the bank or indemnify the petitioner
the same amount with interest. On appeal, the decision
was reversed. Hence, this petition.
ISSUE: W/n the money order is a NI.
RULING:
NO. The weight of authority in the United States is that
postal money orders are not negotiable instruments, the
reason behind this rule being that, in establishing and
operating a postal money order system, the government is
not engaging in commercial transactions but merely
exercises a governmental power for the public benefit.
It is to be noted in this connection that some of the
restrictions imposed upon money orders by postal laws
and regulations are inconsistent with the character of
negotiable instruments. For instance, such laws and
regulations usually provide for not more than one
endorsement; payment of money orders may be withheld
under a variety of circumstances
Of particular application to the postal money order in
question are the conditions laid down in the letter of the
Director of Posts of October 26, 1948 to the Bank of
America for the redemption of postal money orders
received by it from its depositors. Among others, the
condition is imposed that "in cases of adverse claim, the
money order or money orders involved will be returned to
you (the bank) and the corresponding amount will have to
be refunded to the Postmaster, Manila, who reserves the
right to deduct the value thereof from any amount due
you if such step is deemed necessary." The conditions
thus imposed in order to enable the bank to continue
enjoying the facilities theretofore enjoyed by its
depositors, were accepted by the Bank of America. The
latter is therefore bound by them. That it is so is clearly
inferred from the fact that, upon receiving advice that the
been deducted from its clearing account with the Manila
Post Office, it did not file any protest against such action.
FIRESTONE TIRE & RUBBER COMPANY OF THE
PHILIPPINES vs. COURT OF APPEALS AND LUZON
DEVELOPMENT BANK
G.R. No. 113236, March 05, 2001
FACTS:
-Defendant Luzon Development Bank had as one of its
client-depositors the Fojas-Arca Enterprises Company.
Fojas-Arca maintained a special savings account with
defendant and the latter authorized and allowed
withdrawals of funds therefrom through special withdrawal
slips supplied by the bank itself. On January 1978, Fojas
Arca entered into a Franchise Dealership Agreement
whereby it was given the privilege to purchase on credit
and sell plaintiffs products.
-On January 14, 1978 up to May 15, 1978 Fojas Arca
purchased on credit Firestone products with the total
amount of P4,896,000. In payment thereof, he delivered to
plaintiff 6 special withdrawal slips. The plaintiff deposited
the slips with its current account with the CitiBank. The
defendant honored and paid the slips. Fojas-Arca
subsequently made several purchases on credit, and in
payment thereof, it issued 4 withdrawal slips. CitiBank
however already credited the account of plaintiff the
amount for the slips. However, among the 4 withdrawal
slips, only two were honored and paid by the defendant.
As a result, the Citibank debited plaintiffs account for the
total sum of P2,078,092.80 representing the amount of
the two withdrawal slips.
-Plaintiff demanded payment from the bank but to no
avail. Hence, a suit for damages was filed in court.
Defendant denied that special withdrawal slips were
honored and treated as if it were checks, the truth being
that when the special withdrawal slips were received by
defendant, it only verified whether or not the signatures
therein were authentic, and whether or not the deposit
level in the passbook concurred with the savings ledger,
and whether or not the deposit is sufficient to cover the
withdrawal; If at first defendant had given notice to
plaintiff it is merely an extension of usual bank courtesy to
a prospective client; that defendant is only dealing with its
depositor Fojas-Arca and not the plaintiff. The lower court
dismissed the complaint, so did the appellate court.
Hence, this petition.
ISSUE: W/n the withdrawals slips were NI if so
respondent bank should be held liable for damages
suffered by petitioner, due to its allegedly belated notice
of non-payment of the subject withdrawal slips.
RULING:
NO. Petitioner admits that the withdrawal slips in question
were non-negotiable. Hence, the rules governing the
giving of immediate notice of dishonor of negotiable
instruments do not apply in this case. Thus, respondent
bank was under no obligation to give immediate notice
that it would not make payment on the subject withdrawal
slips. Citibank should have known that withdrawal slips
were not negotiable instruments. It could not expect these
slips to be treated as checks by other entities. Payment or
notice of dishonor from respondent bank could not be
expected immediately, in contrast to the situation
involving checks.
-In the ordinary and usual course of banking operations,
current account deposits are accepted by the bank on the
basis of deposit slips prepared and signed by the
depositor, or the latter's agent or representative, who
indicates therein the current account number to which the
deposit is to be credited, the name of the depositor or
current account holder, the date of the deposit, and the
amount of the deposit either in cash or in check.
-The withdrawal slips deposited with petitioner's current
account with Citibank were not checks, as petitioner
admits. Citibank was not bound to accept the withdrawal
slips as a valid mode of deposit. But having erroneously
accepted them as such, Citibank - and petitioner as
account-holder - must bear the risks attendant to the
acceptance of these instruments. Petitioner and Citibank
could not now shift the risk and hold private respondent
liable for their admitted mistake.
PHILIPPINE NATIONAL BANK vs. ERLANDO T.
RODRIGUEZ AND NORMA RODRIGUEZ
G.R. No. 170325 | September 26, 2008
FACTS:
Respondent-spouses are engaged in the informal
lending business. PEMSLA on the other hand, is an
associoation of PNB employees. Both parties are
clients of PNB Amelia Branch. PEMSLA granted loan
to its members. Respondents would rediscount the
postdated checks issued to its members whenever
PEMSLA was short of funds. The spouses would
replace the PEMSLA checks with their own checks
issued in the name of members.
It was PEMSLAs policy not to extend loans of
members with outstanding debts. To subvert this
policy, PEMSLA officers devised a scheme whereby
they took out loans in the name of unsuspecting
members, without their knowledge or consent. The
PEMSLA Checks then issued were given to the
spouses for rediscounting. The officers carried this
out by forging the indorsement of the named payees
in the checks. In return, the spouses issued their
personal checks in the name of the members and
delivered them to PEMSLA. The PEMSLA checks were
then deposited by the spouses to their account.
The Rodriguez checks were deposited by PEMSLA it
its savings account without any indorsement from
the named payees. An irregular procedure carried
out by one of the officer of PEMSLA who was also a
bank teller. From 1998-1999 the spouses issued 69
checks amounting to P2,345,804. They were payable
to 47 individual payees. To put a stop to this
scheme, PNB closed the current account of PEMSLA,
as a result, the PEMSLA checks were dishonored.
The corresponding checks were deposited to
PEMSLA Savings account.
The spouses then filed suit for damages against
PNB, PEMSLA and MCP. They sought to recover the
value of the checks. The RTC ruled in their favor. On
appeal, the CA reversed the decision of the RTC, but
later reversed its own decision stating that the
checks were order instruments. Hence, this petition.
ISSUE: W/n the subject checks are payable to order
or to bearer and who bears the loss?
RULING: Payable to order. Bank bears the loss.
The distinction between bearer and order
instruments lies in their manner of negotiation.
Under Section 30 of the NIL, an order instrument
requires an indorsement from the payee or holder
before it may be validly negotiated. A bearer
instrument, on the other hand, does not require an
indorsement to be validly negotiated. It is
negotiable by mere delivery.
A review of US jurisprudence yields that an actual,
existing, and living payee may also be "fictitious" if
the maker of the check did not intend for the payee
to in fact receive the proceeds of the check. This
usually occurs when the maker places a name of an
existing payee on the check for convenience or to
cover up an illegal activity.[14] Thus, a check made
expressly payable to a non-fictitious and existing
person is not necessarily an order instrument. If the
payee is not the intended recipient of the proceeds
of the check, the payee is considered a "fictitious"
payee and the check is a bearer instrument.
In a fictitious-payee situation, the drawee bank is
absolved from liability and the drawer bears the
loss. When faced with a check payable to a fictitious
payee, it is treated as a bearer instrument that can
be negotiated by delivery. The underlying theory is
that one cannot expect a fictitious payee to
negotiate the check by placing his indorsement
thereon. And since the maker knew this limitation,
he must have intended for the instrument to be
negotiated by mere delivery. Thus, in case of
controversy, the drawer of the check will bear the
loss. This rule is justified for otherwise, it will be
most convenient for the maker who desires to
escape payment of the check to always deny the
validity of the indorsement. This despite the fact
that the fictitious payee was purposely named
without any intention that the payee should receive
the proceeds of the check.
However, there is a commercial bad faith exception
to the fictitious-payee rule. A showing of
commercial bad faith on the part of the drawee
bank, or any transferee of the check for that matter,
will work to strip it of this defense. The exception
will cause it to bear the loss. Commercial bad faith
is present if the transferee of the check acts
dishonestly, and is a party to the fraudulent scheme.
For the fictitious-payee rule to be available as a
defense, PNB must show that the makers did not
intend for the named payees to be part of the
transaction involving the checks. At most, the
bank's thesis shows that the payees did not have
knowledge of the existence of the checks. This lack
of knowledge on the part of the payees, however,
was not tantamount to a lack of intention on the
part of respondents-spouses that the payees would
not receive the checks' proceeds. Considering that
respondents-spouses were transacting with PEMSLA
and not the individual payees, it is understandable
that they relied on the information given by the
officers of PEMSLA that the payees would be
receiving the checks.
Verily, the subject checks are presumed order
instruments. This is because, as found by both
lower courts, PNB failed to present sufficient
evidence to defeat the claim of respondents-spouses
that the named payees were the intended recipients
of the checks' proceeds. The bank failed to satisfy a
requisite condition of a fictitious-payee situation -
that the maker of the check intended for the payee
to have no interest in the transaction.
Because of a failure to show that the payees were
"fictitious" in its broader sense, the fictitious-payee
rule does not apply. Thus, the checks are to be
deemed payable to order. Consequently, the
drawee bank bears the loss.
PRUDENTIAL BANK vs. COMMISSIONER OF
INTERNAL REVENUE
G.R. No. 180390, July 27, 2011
FACTS:
On July 23, 1999, petitioner received from the
respondent Commissioner of Internal Revenue (CIR)
a Final Assessment Notice and a Demand Letter for
deficiency Documentary Stamp Tax (DST) for the
taxable year 1995 on its Repurchase Agreement
with the Bangko Sentral ng Pilipinas, Purchase of
Treasury Bills from the BSP, and on its Savings
Account Plus product, in the total amount of
P18,982,734.38. Petitioner protested the
assessment on the ground that the documents
subject matter of the assessment are not subject to
DST. However, it was denied.
Thus, petitioner filed a Petition for Review before the
CTA. The CTA affirmed the assessment for deficiency
DST insofar as the SAP is concerned. Petitioner
moved for partial reconsideration but the same was
denied. On appeal, the CTA En Banc denied the
same.
ISSUE: W/n petitioners Savings Account Plus is
subject to DST.
RULING: YES. Petitioner contends that its SAP is not
subject to DST because it is not included in the list
of documents under Section 180 of the old NIRC, as
amended. Petitioner insists that unlike a time
deposit, its SAP is evidenced by a passbook and not
by a deposit certificate. In addition, its SAP is
payable on demand and not on a fixed determinable
future.
-DST is imposed on certificates of deposit bearing
interest pursuant to Section 180 of the old NIRC, as
amended, to wit:
Sec. 180. Stamp tax on all loan agreements,
promissory notes, bills of exchange, drafts,
instruments and securities issued by the
government or any of its instrumentalities,
certificates of deposit bearing interest and
others not payable on sight or demand. Xxx
-In China Banking Corporation v. Commissioner of
Internal Revenue, we held that the Savings Plus
Deposit Account, which has the following features:
1. Amount deposited is withdrawable anytime;
2. The same is evidenced by a passbook;
3. The rate of interest offered is the prevailing
market rate, provided the depositor would maintain
his minimum balance in thirty (30) days at the
minimum, and should he withdraw before the
period, his deposit would earn the regular savings
deposit rate;
-is subject to DST as it is essentially the same as the
Special/Super Savings Deposit Account in Philippine
Banking Corporation v. Commissioner of Internal
Revenue, and the Savings Account-Fixed Savings
Deposit in International Exchange Bank v.
Commissioner of Internal Revenue, which are
considered certificates of deposit drawing interests.
Similarly, in this case, although the money
deposited in a SAP is payable anytime, the
withdrawal of the money before the expiration of 30
days results in the reduction of the interest rate. In
the same way, a time deposit withdrawn before its
maturity results to a lower interest rate and
payment of bank charges or penalties.
The fact that the SAP is evidenced by a passbook
likewise cannot remove its coverage from Section
180 of the old NIRC, as amended. A document to be
considered a certificate of deposit need not be in a
specific form. Thus, a passbook issued by a bank
qualifies as a certificate of deposit drawing interest
because it is considered a written acknowledgement
by a bank that it has accepted a deposit of a sum of
money from a depositor.
ROMEO C. GARCIA, PETITIONER, VS. DIONISIO
V. LLAMAS, RESPONDENT.
G.R. No. 154127, December 08, 2003
FACTS:
On December 23, 1996, petitioner Garcia and de
Jesus borrowed P400,00 from respondent Llamas. On
the same day, they issued a promissory note
wherein they bound themselves jointly and severally
to pay the loan on or before January 23, 1997 with
5% interest per month. Since the loan has been long
overdue, and despite repeated demands,
respondent filed this suit.
On the other hand, Garcia alleged that he assumed
no liability under the promissory note because he
signed it merely as an accommodation party for de
Jesus and, alternatively, that he is relieved from any
liability arising from the note inasmusch as the loan
had been paid by de Jesus by means of a check date
April 17, 1997, and that in any event, the issuance
of the check novated or superseded the note.
Respondent replited that the loan remained unpaid
as the check bounced.
The trial court ruled in favor of respondent and
ordered that petitioner and de Jesus and solidarily
liable evidenced by the promissory note. On appeal
to the CA, it remanded the case of de Jesus to the
trial court and treated the judgment against Garcia
as summary judgment. Hence, this petition.
ISSUE: Whether or not the PN is a NI. Whether or
not Garcia is liable being merely an accommodation
party.
RULING: NO. By its terms, the note was made
payable to a specific person rather than to bearer or
to order -- a requisite for negotiability under Act
2031, the Negotiable Instruments Law (NIL). Hence,
petitioner cannot avail himself of the NIL's provisions
on the liabilities and defenses of an accommodation
party. Besides, a non-negotiable note is merely a
simple contract in writing and is evidence of such
intangible rights as may have been created by the
assent of the parties. The promissory note is thus
covered by the general provisions of the Civil Code,
not by the NIL.
Even granting arguendo that the NIL was applicable,
still, petitioner would be liable for the promissory
note. Under Article 29 of Act 2031, an
accommodation party is liable for the instrument to
a holder for value even if, at the time of its taking,
the latter knew the former to be only an
accommodation party. The relation between an
accommodation party and the party accommodated
is, in effect, one of principal and surety -- the
accommodation party being the surety. It is a settled
rule that a surety is bound equally and absolutely
with the principal and is deemed an original
promissor and debtor from the beginning. The
liability is immediate and direct.
CALTEX (PHILIPPINES), INC.VS. COURT OF
APPEALS AND SECURITY BANK AND TRUST
COMPANY
G.R. No. 97753, August 10, 1992
FACTS:
On various dates, defendant bank issued 280
certificate of time deposits (CTD) in favor of Angel
Dela Cruz who deposited with it the aggregate
amount of P1,120,000. Angel dela Cruz delivered
said certificates of time deposits to Caltex in
connection with his purchase of fuel products from
it. Sometime in 1982, dela Cruz informed the Bank
that he lost all certificates of deposits and was
advised to present a notarized affidavit of loss. Dela
Cruz complied with the same and was thus issed
280 replacement CTDs.
On March 25, 1982, dela Cruz obtained a loan from
the bank in the amount of P875,00 and assigned his
time deposit to the bank authorizing the bank to
have full control of the same, preterminate, set-off
and apply said time deposits to his loan upon
maturity. Sometime in November 1982, Mr. Aranas,
credit manager of Caltex Inc went to defendant bank
and presented for verification the CTD alleging that
the same were delivered to it as security for
purchases made with Caltex Philippines by said
depositors. On November 26, 1982, defendant
received a letter informing it of its possession of the
CTD and payment of the same. . On December 8,
1982, plaintiff was requested by herein defendant to
furnish the former a copy of the document
evidencing the guarantee agreement with Mr. Angel
dela Cruz as well as the details of Mr. Angel dela
Cruz' obligations against which plantiff proposed to
apply the time deposit but to no avail. Thus, the
bank rejected his claim of payment.
Subsequently, the loan of dela Cruz matured
prompting the bank to set off his time deposits to his
loan. Hence, this suit. The trial court dismissed the
complaint. The CA affirmed the same.
ISSUE: W/n the CTDs are NI. w/n the petitioner can
recover the value of the same.
RULING: YES. The CTDs in question are negotiable
instruments. Section 1 of Act No. 2031, otherwise
known as the Negotiable Instruments Law,
enumerates the requisites for an instrument to
become negotiable, viz:
On this score, the accepted rule is that the
negotiability or non-negotiability of an instrument is
determined from the writing, that is, from the face of
the instrument itself. In the construction of a bill or
note, the intention of the parties is to control, if it
can be legally ascertained. While the writing may be
read in the light of surrounding circumstances in
order to more perfectly understand the intent and
meaning of the parties, yet as they have constituted
the writing to be the only outward and visible
expression of their meaning, no other words are to
be added to it or substituted in its stead. The duty of
the court in such case is to ascertain, not what the
parties may have secretly intended as
contradistinguished from what their words express,
but what is the meaning of the words they have
used. What the parties meant must be determined
by what they said.
Contrary to what respondent court held, the CTDs
are negotiable instruments. The documents provide
that the amounts deposited shall be repayable to
the depositor. And who, according to the document,
is the depositor? It is the "bearer." The documents
do not say that the depositor is Angel de la Cruz and
that the amounts deposited are repayable
specifically to him. Rather, the amounts are to be
repayable to the bearer of the documents or, for
that matter, whosoever may be the bearer at the
time of presentment.
If it was really the intention of respondent bank to
pay the amount to Angel de la Cruz only, it could
have with facility so expressed that fact in clear and
categorical terms in the documents, instead of
having the word "BEARER" stamped on the space
provided for the name of the depositor in each CTD.
On the wordings of the documents, therefore, the
amounts deposited are repayable to whoever may
be the bearer thereof. Thus, petitioner's aforesaid
witness merely declared that Angel de la Cruz is the
depositor "insofar as the bank is concerned," but
obviously other parties not privy to the transaction
between them would not be in a position to know
that the depositor is not the bearer stated in the
CTDs. Hence, the situation would require any party
dealing with the CTDs to go behind the plain import
of what is written thereon to unravel the agreement
of the parties thereto through facts aliunde. This
need for resort to extrinsic evidence is what is
sought to be avoided by the Negotiable Instruments
Law and calls for the application of the elementary
rule that the interpretation of obscure words or
Stipulations in a contract shall not favor the party
who caused the obscurity.[12]
NO. Unfortunately for petitioner, although the CTDs
are bearer instruments, a valid negotiation thereof
for the true purpose and agreement between it and
De la Cruz, as ultimately ascertained, requires both
delivery and indorsement. For, although petitioner
seeks to deflect this fact, the CTDs were in reality
delivered to it as a security for De la Cruz purchases
of its fuel products.
Petitioner's insistence that the CTDs were
negotiated to it begs the question. Under the
Negotiable Instruments Law, an instrument is
negotiated when it is transferred from one person to
another in such a manner as to constitute the
transferee the holder thereof, and a holder may be
the payee or indorsee of a bill or note, who is in
possession of it, or the bearer thereof. In the present
case, however, there was no negotiation in the
sense of a transfer of the legal title to the CTDs in
favor of petitioner in which situation, for obvious
reasons, mere delivery of the bearer CTDs would
have sufficed. Here, the delivery thereof only as
security for the purchases of Angel de la Cruz (and
we even disregard the fact that the amount involved
was not disclosed) could at the most constitute
petitioner only as a holder for value by reason of his
lien. Accordingly, a negotiation for such purpose
cannot be effected by mere delivery of the
instrument since, necessarily, the terms thereof and
the subsequent disposition of such security, in the
event of non-payment of the principal obligation,
must be contractually provided for.
BANCO DE ORO SAVINGS AND MORTGAGE
BANK VS. EQUITABLE BANKING
CORPORATION, et., al.
G.R.No. L-74917, January 20, 1988
FACTS:
Sometime in March, April, May and August of
1983, plaintiff Equitable Banking Corporation
drew 6 crossed Managers check in the
aggregate amount of P45,982.23 and payable
to certain member establishments of Visa Card.
Subsequently, the checks were deposited with
the defendant to the credit of its depositor, a
certain Aida Trencio.
Defendant Banco De Oro stamped at the back
of the check All prior and/or lack of
endorsement guaranteed. They then sent the
checks to PCHC for clearing. Accordingly,
plaintiff Equitable paid the checks; its clearing
account was debited for value of the Checks
and defendants clearing account was credit for
the same amount. However, plaintiff discovered
that the endorsements appearing at the back of
the checks were forged and/or unauthorized or
otherwise belong to persons other than the
payees.
Thus, pursuant to PCHC rules, plaintiff
presented the checks directly to BDO for
purposes of claiming reimbursement but to no
avail. Hence, plaintiff filed a complaint praying
that defendant be required to pay the amount
of the checks. The arbiter ruled in favor of
plaintiff and ordered payment of the same
amount. Upon motion for reconsideration, the
Board of directors affirmed the arbiters
decision. Hence, this petition.
ISSUE:W/n PCHC has jurisdiction to adjudicate
the case. W/n not the subject checks are
negotiable instruments.
RULING: YES. The PCHC makes no distinction as
to the character or nature of the checks subject
of its jurisdiction. The pertinent provisions
quoted in petitioners memorandum simply refer
to check(s). Where the law does not distinguish,
we shall not distinguish.
In the case of Reyes vs. Chuanico (CA-G.R. No.
208.13-R, Feb. 5, 1962) the Appellate Court
categorically stated that there are four kinds of
checks in this jurisdiction; the regular check;
the cashier's check; the travelers check; and
the crossed check. The Court, further
elucidated, that while the Negotiable
Instruments Law does not contain any provision
on crossed checks, it is common practice in
commercial and banking operations to issue
checks of this character, obviously in
accordance with Article 541 of the Code of
Commerce. Attention is likewise called to
Section 185 of the Negotiable Instruments Law:
Sec. 185. Check defined. A check is a bill of
exchange drawn on a bank payable on demand.
Except as herein otherwise provided, the
provisions of this act applicable to a bill of
exchange payable on demand apply to a
check.
and the provisions of Section 61 (supra) that
the drawer may insert in the instrument an
express stipulation negating or limiting his own
liability to the holder. Consequently, it appears
that the use of the-term check in the Articles
of Incorporation of PCHC is to be perceived as
not limited to negotiable checks only, but to
checks as is generally known in use in
commercial or business transactions.
The petitioner by its own acts and
representation can not now deny liability
because it assumed the liabilities of an
endorser by stamping its guarantee at the back
of the checks.
The petitioner having stamped its guarantee of
all prior endorsements and/or lack of
endorsements (Exh. A-2 to F- 2) is now
estopped from claiming that the checks under
consideration are not negotiable instruments.
The checks were accepted for deposit by the
petitioner stamping thereon its guarantee, in
order that it can clear the said checks with the
respondent bank. By such deliberate and
positive attitude of the petitioner it has for all
legal intents and purposes treated the said
checks as negotiable instruments and
accordingly assumed the warranty of the
endorser when it stamped its guarantee of prior
endorsements at the back of the checks. It led
the said respondent to believe that it was
acting as endorser of the checks and on the
strength of this guarantee said respondent
cleared the checks in question and credited the
account of the petitioner.

The PCHC Rules and Regulations should not be

interpreted to be applicable only to checks
which are negotiable instruments but also to
non-negotiable instruments, and that the PCHC
has jurisdiction over this case even as the
checks subject of this litigation are admittedly
non-negotiable.

Moreover, petitioner is estopped from raising

the defense of non-negotiability of the checks
in question. It stamped its guarantee on the
back of the checks and subsequently presented
these checks for clearing and it was on the
basis of these endorsements by the petitioner
that the proceeds were credited in its clearing
account.