WETTLAUFER vs.

BAXTER
DOCTRINE: The note, which was payable to Baxter alone, and did not contain the words “to order” or “to bearer” was not a
negotiable instrument. These words are indispensable to make the paper a negotiable instrument within the meaning of the act.
Without words of negotiability, purchasers take the bill or note subject to all defenses which were available between the original
parties. It will not be rendered negotiable by subsequent transfer in negotiable form.
Sec. 9 of the NIL states that, “the instrument is payable to bearer when the only or last indorsement is an indorsement in blank”
but this does not mean that an indorsement in blank converts a non-negotiable note on its face or by its terms into a negotiable
one. By signing his name at the back of the note, Baxter was merely an assignor and not liable.

BORROMEO vs. SUN

DOCTRINE: The NIL can be applied only by analogy. The SC applied Sec. 14 of the NIL by analogy in a case involving a Deed of
Assignment of shares of stocks which was signed in blank to facilitate future assignment of the same shares. The Court observed
that the situation is similar to Sec. 14 where the blanks in an instrument may be filled up by the holder, the signing in blank being
with the assumed authority to do so.
Although the Deed of Assignment is dated January 16, 1974 while the questioned signature was found to be circa 1954-1957 is of
no moment. It does not necessarily mean that the deed is a forgery.

GSIS vs. CA and SPS. RACHO

DOCTRINE: Under Sec. 29 of the NIL: “an accommodation party is one who has signed an instrument as maker, drawer, acceptor
of indorser without receiving value therefor, but is held liable on the instrument to a holder for value although the latter knew
him to be only an accommodation party.”
HOWEVER the promissory note, as well as the mortgage deeds subject of this case, are clearly not negotiable instruments. These
documents do not comply with Sec. 1(4) of the NIL because they are neither payable to order nor to bearer. The note is payable
to a specified party, the GSIS. Absent the aforesaid requisite, the provisions of Act No. 2031 would not apply; governance shall be
afforded, instead, by the provisions of the Civil Code and special laws on mortgages. Art. 2085 of the NCC provides that third
persons who are not parties to the principal obligation may secure the latter by pledging or mortgaging their own property. The
supposed requirement of prior demand on the private respondents is not needed.

KAUFFMAN vs. PNB

DOCTRINE: Before the provisions of the Negotiable Instruments Law can come into operation, there must be a document in
existence of the character described in Sec. 1 of the NIL, and no rights properly speaking arise in respect to said instrument until
it is delivered. In the case before us there was an order transmitted by PNB to its New York branch for the payment of a specified
sum of money to Kauffman, but this order was not made payable "to order or "to bearer," as required in Sec. 1(d) of the NIL.
Also, inasmuch as it never left the possession of the bank, or its representative in New York City, there was no delivery in the
sense intended in Sec. 16 of the same Law. The official receipt delivered by the bank to the purchaser of the telegraphic order
cannot itself be viewed in the light of a negotiable instrument, although it affords complete proof of the obligation actually
assumed by the bank.
NONETHELESS, under Art. 1257 of the NCC, “should the contract contain any stipulation in favor of a third person, he may
demand its fulfillment, provided he has given notice of his acceptance to the person bound before the stipulation has been
revoked.” Thus, the right of Kauffman to maintain the present action is clear enough.

CALTEX vs. CA
DOCTRINE: The SC held that the Certificates of Time Deposit are negotiable instruments. The documents provide that the
amounts deposited shall be repayable to the depositor. According to the document, the depositor 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.
SALAS vs. CA and FILINVEST FINANCE & LEASING CORPORATION
DOCTRINE: A careful study of the questioned promissory note shows that it is a negotiable instrument, having complied with the
requisites under the law as follows: [a] it is in writing and signed by the maker Juanita Salas; [b] it contains an unconditional
promise to pay the amount of P58,138.20; [c] it is payable at a fixed or determinable future time which is "P1,614.95 monthly for
36 months due and payable on the 21st day of each month starting March 21, 1980 thru and inclusive of Feb. 21, 1983;" [d] it is
payable to Violago Motor Sales Corporation, or order. It was negotiated by indorsement in writing on the instrument itself
payable to the Order of Filinvest Finance and Leasing Corporation and it is an indorsement of the entire instrument.
Under the circumstances, there appears to be no question that Filinvest is a holder in due course, having taken the instrument
under the following conditions: [a] it is complete and regular upon its face; [b] it became the holder thereof before it was
overdue, and without notice that it had previously been dishonored; [c] it took the same in good faith and for value; and [d]
when it was negotiated to Filinvest, the latter had no notice of any infirmity in the instrument or defect in the title of VMS
Corporation. Thus, Filinvest holds the instrument free from any defect of title of prior parties, and free from defenses available to
prior parties among themselves, and may enforce payment of the instrument for the full amount thereof. This being so, Salas
cannot set up against Filinvest the defense of nullity of the contract of sale between her and VMS.

ROMEO GARCIA, vs. DIONISIO V. LLAMAS

DOCTRINE: The SC held that the note is not a negotiable instrument. The note1 was made payable to a specific person [Received
from Atty. Llamas] rather than to bearer or to order-- a requisite for negotiability under Act 2031, the NIL. Hence, Garcia 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.

JIMENEZ vs. BUCOY

DOCTRINE: The SC held that the subject note2 amounted in effect to "a promise to pay P10,000 six months after the war, without
interest." An acknowledgment may become a promise by the addition of words by which a promise of payment is naturally
implied, such as, "payable," "payable" on a given day, "payable on demand," "paid . . . when called for," . . .
To constitute a good promissory note, no precise words of contract are necessary, provided they amount, in legal effect, to a
promise to pay. In other words, if over and above the mere acknowledgment of the debt, there may be collected from the words
used a promise to pay it, the instrument may be regarded as a promissory note. "Due A. B. $325, payable on demand," or, "I
acknowledge myself to be indebted to A in $109, to be paid on demand, for value received," or, "I O. U. $85 to be paid on May
5th," are held to be promissory notes, significance being given to words of payment as indicating a promise to pay."

FIRESTONE TIRE & RUBBER CO. vs. CA and LUZON DEVELOPMENT BANK
DOCTRINE: LDB 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, LDB 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 LDB could not be expected immediately, in contrast to the situation involving checks.
In the case at bar, it appears that Citibank, with the knowledge that respondent Luzon Development Bank, had honored and paid
the previous withdrawal slips, automatically credited petitioner's current account with the amount of the subject withdrawal
slips, then merely waited for the same to be honored and paid by respondent bank. It presumed that the withdrawal slips were
"good." Citibank could not have missed the non-negotiable nature of the withdrawal slips. The essence of negotiability which
characterizes a negotiable paper as a credit instrument lies in its freedom to circulate freely as a substitute for money. The
WITHDRAWAL SLIPS in question lacked this character.

1
Received from Atty. Llamas, P400,000 payable on or before January 23, 1997. It is understood that our liability under this loan is jointly and severally.
2
Received from Miss Pacifica Jimenez the total amount of P10,000, payable six months after the war, without interest.
LEE vs. CA and PHILIPPINE BANK OF COMMUNICATIONS
DOCTRINE: Under Sec. 24 of the NIL, “Every negotiable instrument is deemed prima facie to have been issued for valuable
consideration and every person whose signature appears thereon to have become a party thereto for value. While the subject
promissory notes and letters of credit issued by the PBCom made no mention of delivery of cash, it is presumed that said
negotiable instruments were issued for valuable consideration.
While the presumption found under the Negotiable Instruments Law may not necessarily be applicable to trust receipts and
letters of credit, the presumption is that the drafts drawn in connection with the letters of credit have sufficient consideration.
However, aside from their bare denials petitioners did not present sufficient and competent evidence to rebut the evidence of
private respondent PBCom. Petitioner MICO did not proffer a single piece of evidence, apart from its bare denials, to support its
allegation that the loan transactions, real estate mortgage, letters of credit and trust receipts were issued allegedly without any
consideration.

PHILIPPINE EDUCATION CO., INC. vs. SORIANO

DOCTRINE: The SC held 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.

ABUBAKAR, vs. THE AUDITOR GENERAL

DOCTRINE: The SC held that a treasury warrant is not within the scope of the negotiable instruments law. For one thing, the
document bearing on its face the words "payable from the appropriation for food administration," is actually an order for
payment out of "a particular fund," and is not unconditional, and does not fulfill one of the essential requirements of a
negotiable instrument. In the United States, government warrants for the payment of money are not negotiable instruments nor
commercial paper.

METROPOLITAN BANK & TRUST COMPANY vs. CA, GOLDEN SAVINGS & LOAN ASSOCIATION, INC.
DOCTRINE: The SC held that the treasury warrants in question are not negotiable instruments. Clearly stamped on their face is
the word "non-negotiable." Moreover, it is indicated that they are payable from a particular fund, to wit, Fund 501. The
indication of Fund 501 as the source of the payment to be made on the treasury warrants makes the order or promise to pay
"not unconditional" and the warrants themselves non-negotiable. There should be no question that the exception on Sec. 3 of
the NIL is applicable in the case at bar, to wit: “An order or promise to pay out of a particular fund is not unconditional.”
Metrobank cannot contend that by indorsing the warrants in general, Golden Savings assumed that they were "genuine and in all
respects what they purport to be," in accordance with Sec. 66 of the NIL. This law is not applicable to the non-negotiable
treasury warrants. The indorsement was made by Gloria Castillo not for the purpose of guaranteeing the genuineness of the
warrants but merely to deposit them with Metrobank for clearing.

SESBREÑO vs.CA, DELTA MOTORS CORPORATION AND PILIPINAS BANK

DOCTRINE: The negotiation of a negotiable instrument must be distinguished from the assignment or transfer of an instrument
whether that be negotiable or non-negotiable. Only an instrument qualifying as a negotiable instrument under the relevant
statute may be negotiated either by indorsement thereof coupled with delivery, or by delivery alone where the negotiable
instrument is in bearer form. A negotiable instrument may, however, instead of being negotiated, also be assigned or transferred.
A non-negotiable instrument may not be negotiated, but it may be assigned or transferred, absent an express prohibition against
assignment or transfer written in the face of the instrument. The words "not negotiable," stamped on the face of an
instrument did not destroy its assignability, but the sole effect was to exempt the instrumentl from the statutory provisions
relative thereto. Though not negotiable, it may still be transferred by assignment; the assignee taking subject to the equities
between the original parties. In the present case, the subject note, while marked "non-negotiable," was not at the same time
stamped "non-transferable" or "non-assignable." It contained no stipulation which prohibited Philfinance from assigning or
transferring, in whole or in part, that Note.

PNB vs. ZULUETA

DOCTRINE: The document is negotiable and is governed by the Negotiable Instruments Law, but this statute does not certain any
express provision on the question. Draft is a foreign bill of exchange, because while drawn in New York, it is payable here. (Sec.
129 of NIL) Although the amount payable is expressed in dollars, it is still negotiable, for it may be discharged with pesos of
equivalent amount. The problem arises when we try to determine the "equivalent amount", because the rate of exchange
fluctuates from day to day.
There are decisions in America to the effect that, "the rate of exchange in effect at the time the bill should have been paid"
controls. Such decisions agree with the provisions of the Bills of Exchange Act of England and could be taken as enunciating the
correct principle, inasmuch as our Negotiable Instruments Law, practically copied the American Uniform Negotiable Instruments
Law which in turn was based largely on the Bills of Exchange Act of England of 1882. Zulueta's obligation having been incurred
before the creation of the 17% tax, it may not be validly burdened with such tax, because the law imposing it could not be
deemed to have impaired obligations already existing at the time of its approval.

PNB vs. Sps. RODRIGUEZ

DOCTRINE: A check that is payable to a specified payee is an order instrument. However, under Section 9(c) of the NIL, a check
payable to a specified payee may nevertheless be considered as a bearer instrument if it is payable to the order of a fictitious or
non-existing person, and such fact is known to the person making it so payable. 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. 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 the case under review, the Rodriguez checks were payable to specified payees. 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. 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.

ANG TEK LIAN, vs. CA

DOCTRINE: Under the NIL, 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. 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.
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. 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. In the present case, the form of the check was totally unconnected with its dishonor. It was returned
unsatisfied because the drawer had insufficient funds, not because the drawer's indorsement was lacking.

PNB vs. MANILA OIL REFINING & BY-PRODUCTS COMPANY, INC.

DOCTRINE: Under the NIL, Sec. 5 provides that "The negotiable character of an instrument otherwise negotiable is not affected
by a provision which “(b) Authorizes a confession of judgment if the instrument be not paid at maturity." The SC held that such is
a portion of a uniform law which merely provides that, in jurisdiction where judgment notes are recognized, such clauses shall
not affect the negotiable character of the instrument. Moreover, the same section of the Negotiable Instruments Law concludes
with these words: "But nothing in this section shall validate any provision or stipulation otherwise illegal."
Warrants of attorney are void as against public policy, because they enlarge the field for fraud, because under these instruments
the promisor bargains away his right to a day in court, and because the effect of the instrument is to strike down the right of
appeal accorded by statute. Provisions in notes authorizing attorneys to appear and confess judgments against makers should
not be recognized in our jurisdiction by implication and should only be considered as valid when given express legislative
sanction.

EQUITABLE BANKING CORPORATION vs. IAC and THE EDWARD J. NELL CO.
DOCTRINE: The SC held that the subject check was equivocal and patently ambiguous. By making the check read: Pay to the
EQUITABLE BANKING CORPORATION Order of A/C OF CASVILLE ENTERPRISES, INC. the payee ceased to be indicated with
reasonable certainty in contravention of Sec. 8 of the NIL. As worded, it could be accepted as deposit to the account of the party
named after the symbols "A/C," or payable to the Bank as trustee, or as an agent, for Casville Enterprises, Inc., with the latter
being the ultimate beneficiary. That ambiguity is to be taken contra proferentem that is, construed against NELL who caused the
ambiguity and could have also avoided it by the exercise of a little more care. Thus, Art. 1377 of the Civil Code, provides: The
interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity.
NELL's own acts and omissions in connection with the drawing, issuance and delivery of the subject check and its implicit trust in
Casals, were the proximate cause of its own defraudation: (a) The original check was payable to the order solely of "Equitable
Banking Corporation." NELL changed the payee in the subject check, however, to "Equitable Banking Corporation, A/C of Casville
Enterprises Inc.," upon Casals request. NELL also eliminated both the cash disbursement voucher accompanying the check.

PHILIPPINE NATIONAL BANK vs. CONCEPCION MINING COMPANY, INC., ET AL.,

DOCTRINE: Under Sec. 17(g) of the NIL, “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.” Further, Art. 1216 of the NCC provides that , “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.”
In view of the above quoted provisions, and as the promissory not was executed jointly and severally by the same parties
namely, Concepcion Mining Company, Inc. and Vicente Legarda and Jose 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.

REPUBLIC PLANTERS BANK vs.CA and FERMIN CANLAS

DOCTRINE: The promissory notes are negotiable instruments and must be governed by the Negotiable Instruments Law. Under
the Negotiable lnstruments Law, persons who write their names on the face of promissory notes are makers and are liable as
such. By signing the notes, the maker promises to pay to the order of the payee or any holder according to the tenor
thereof. Based on the above provisions of law, there is no denying that Fermin Canlas is one of the co-makers of the promissory
notes. As such, he cannot escape liability arising therefrom.
Where an instrument containing the words "I promise to pay" is signed by two or more persons, they are deemed to be jointly
and severally liable thereon. An instrument which begins" with "I" ,We" , or "Either of us" promise to, pay, when signed by two or
more persons, makes them solidarily liable. The fact that the singular pronoun is used indicates that the promise is individual as
to each other; meaning that each of the co-signers is deemed to have made an independent singular promise to pay the notes in
full.
In the case at bar, the solidary liability of private respondent Fermin Canlas is made clearer and certain, without reason for
ambiguity, by the presence of the phrase "joint and several" as describing the unconditional promise to pay to the order of
Republic Planters Bank. A joint and several obligation in common law corresponds to a civil law solidary obligation; that is, one of
several debtors bound in such wise that each is liable for the entire amount, and not merely for his proportionate share. By
making a joint and several promise to pay to the order of Republic Planters Bank, private respondent Fermin Canlas assumed the
solidary liability of a debtor and the payee may choose to enforce the notes against him alone or jointly with Yamaguchi and
Pinch Manufacturing Corporation as solidary debtors.
CONSOLIDATED PLYWOOD INDUSTRIES, INC. vs. IFC LEASING AND ACCEPTANCE CORPORATION

DOCTRINE: The SC held that the promissory note1 in question is not a negotiable instrument. The instrument in order to be
considered negotiable must contain the so-called 'words of negotiability, must be payable to 'order' or 'bearer'. These words
serve as an expression of consent that the instrument may be transferred. This consent is indispensable since a maker assumes
greater risk under a negotiable instrument than under a non-negotiable one. These are the only two ways by which an
instrument may be made payable to order. There must always be a specified person named in the instrument. It means that the
bill or note is to be paid to the person designated in the instrument or to any person to whom he has indorsed and delivered the
same. Without the words "or order" or"to the order of, "the instrument is payable only to the person designated therein and is
therefore non-negotiable. Any subsequent purchaser thereof will not enjoy the advantages of being a holder of a negotiable
instrument but will merely "step into the shoes" of the person designated in the instrument and will thus be open to all defenses
available against the latter."

Therefore, considering that the subject promissory note is not a negotiable instrument, it follows that IFC can never be a holder
in due course but remains a mere assignee of the note in question. Thus, Consolidated may raise against IFC all defenses
available to it as against Industrial Products Marketing.

SPS. AGUILAR vs. CITYTRUST FINANCE CORPORATION

DOCTRINE: Since the Aguilars’ payment to Perez is deemed payment to World Cars, the promissory note, chattel mortgage and
other accessory documents they executed which were to take effect only in the event the checks would be dishonored were
deemed nullified, all the checks having been cleared. Since the condition for the instruments to become effective was fulfilled,
the obligation on the part of the Aguilars to be bound thereby did not arise and World Cars did not thus acquire rights
thereunder following Art. 1181 of the Civil Code which provides, “In conditional obligations, the acquisition of rights, as well as
the extinguishment or loss of those already acquired, shall depend upon the happening of the event which constitutes the
condition.”
As no right against the Aguilars was acquired by World Cars under the promissory note and chattel mortgage, it had nothing to
assign to Citytrust. Consequently, Citytrust cannot enforce the instruments against the Aguilars, for an assignee cannot acquire
greater rights than those pertaining to the assignor. At all events, the Aguilars having fully paid the car before they became aware
of the assignment of the instruments to Citytrust when they received notice thereof by Citytrust, they were released of their
obligation thereunder.

SPS. LIM vs. CA and PEOPLE OF THE PHILIPPINES

DOCTRINE: Under Sec. 191 of the Negotiable Instruments Law the term "issue" means the first delivery of the instrument
complete in form to a person who takes it as a holder. On the other hand, the term "holder" refers to the payee or indorsee of a
bill or note who is in possession of it or the bearer thereof.
Although LINTON sent a collector who received the checks from petitioners at their place of business in Kalookan City, they were
actually issued and delivered to LINTON at its place of business in Balut, Navotas. The receipt of the checks by the collector of
LINTON is not the issuance and delivery to the payee in contemplation of law. The collector was not the person who could take
the checks as a holder, i.e., as a payee or indorsee thereof, with the intent to transfer title thereto. Neither could the collector be
deemed an agent of LINTON with respect to the checks because he was a mere employee. Consequently, venue or jurisdiction
lies either in the Regional Trial Court of Kalookan City or Malabon.

DE LA VICTORIA vs. BURGOS

DOCTRINE: Based on the last sentence of Sec. 16 of the NIL, "Where the instrument is no longer in the possession of a party
whose signature appears thereon, a valid and intentional delivery by him is presumed." Yet, the presumption is not conclusive
because the last portion of the provision says "until the contrary is proved." Proof to the contrary is its own finding that the
checks were in the custody of petitioner. Inasmuch as said checks had not yet been delivered to Mabanto, Jr., they did not belong
to him and still had the character of public funds. Accordingly, before there is actual delivery of the check, the payee has no
power over it; he cannot assign it without the consent of the Government. As a necessary consequence of being public fund, the
checks may not be garnished to satisfy the judgment. The rationale behind this doctrine is obvious consideration of public policy.

DEVELOPMENT BANK OF RIZAL vs. SIMA WEI

1
FOR VALUE RECEIVED, I/we jointly and severally promise to pay to the INDUSTRIAL PRODUCTS MARKETING, the sum of P 1,093,789.71, the said principal sum,
to be payable in 24 monthly installments.
DOCTIRNE: Courts have long recognized the business custom of using printed checks where blanks are provided for the date of
issuance, the name of the payee, the amount payable and the drawer's signature. All the drawer has to do when he wishes to
issue a check is to properly fill up the blanks and sign it. However, the mere fact that he has done these does not give rise to any
liability on his part, until and unless the check is delivered to the payee or his representative. A negotiable instrument, of which a
check is, is not only a written evidence of a contract right but is also a species of property. A negotiable instrument must be
delivered to the payee in order to evidence its existence as a binding contract. Section 16 of the Negotiable Instruments Law,
which governs checks, provides in part, “Every contract on a negotiable instrument is incomplete and revocable until delivery of
the instrument for the purpose of giving effect thereto.”
Thus, the payee of a negotiable instrument acquires no interest with respect thereto until its delivery to him. Delivery of an
instrument means transfer of possession, actual or constructive, from one person to another. Without the initial delivery of the
instrument from the drawer to the payee, there can be no liability on the instrument. Moreover, such delivery must be intended
to give effect to the instrument.

Notwithstanding the above, it does not necessarily follow that the drawer Sima Wei is freed from liability to petitioner Bank
under the loan evidenced by the promissory note agreed to by her. Her allegation that she has paid the balance of her loan with
the two checks payable to petitioner Bank has no merit for these checks were never delivered to petitioner Bank. And even
granting, without admitting, that there was delivery to petitioner Bank, the delivery of checks in payment of an obligation does
not constitute payment unless they are cashed or their value is impaired through the fault of the creditor. None of these
exceptions were alleged by respondent Sima Wei.

RCBC vs. Hi-TRI DEVELOPMENT CORP.

DOCTRINE: There are checks of a special type called managers or cashiers checks. These are bills of exchange drawn by the
banks manager or cashier, in the name of the bank, against the bank itself. Typically, a managers or a cashiers check is procured
from the bank by allocating a particular amount of funds to be debited from the depositors account or by directly paying or
depositing to the bank the value of the check to be drawn. Since the bank issues the check in its name, with itself as the drawee,
the check is deemed accepted in advance. Ordinarily, the check becomes the primary obligation of the issuing bank and
constitutes its written promise to pay upon demand. Nevertheless, the mere issuance of a managers check does not ipso
facto work as an automatic transfer of funds to the account of the payee. In case the procurer of the managers or cashiers check
retains custody of the instrument, does not tender it to the intended payee, or fails to make an effective delivery,

RCBC acknowledges that the Managers Check was procured by respondents, and that the amount to be paid for the check would
be sourced from the deposit account of Hi-Tri. When Rosmil did not accept the Managers Check offered by respondents, the
latter retained custody of the instrument instead of cancelling it. As the Managers Check neither went to the hands of Rosmil nor
was it further negotiated to other persons, the instrument remained undelivered.

Since there was no delivery, presentment of the check to the bank for payment did not occur. An order to debit the account of
respondents was never made. In fact, petitioner confirms that the Managers Check was never negotiated or presented for
payment to its Ermita Branch, and that the allocated fund is still held by the bank. As a result, the assigned fund is deemed to
remain part of the account of Hi-Tri, which procured the Managers Check. The doctrine that the deposit represented by a
managers check automatically passes to the payee is inapplicable, because the instrument although accepted in advance remains
undelivered. Hence, respondents should have been informed that the deposit had been left inactive for more than 10 years, and
that it may be subjected to escheat1 proceedings if left unclaimed.

DY vs. PEOPLE

1
Escheat proceedings refer to the judicial process in which the state steps in and claims abandoned, left vacant, or unclaimed property, without there being an
interested person having a legal claim thereto. The law sets a detailed system for notifying depositors of unclaimed balances.
DOCTRINE: Section 191 of the Negotiable Instruments Law defines "issue" as the first delivery of an instrument, complete in
form, to a person who takes it as a holder. Significantly, delivery is the final act essential to the negotiability of an instrument.
Delivery denotes physical transfer of the instrument by the maker or drawer coupled with an intention to convey title to the
payee and recognize him as a holder. It means more than handing over to another; it imports such transfer of the instrument to
another as to enable the latter to hold it for himself.

In this case, even if the checks were given to W.L. Foods in blank, this alone did not make its issuance invalid. When the checks
were delivered to Lim, through his employee, he became a holder with prima facie authority to fill the blanks. The pertinent
provisions of Section 14 of the Negotiable Instruments Law are instructive:
SEC. 14. Blanks; when may be filled.-Where the instrument is wanting in any material particular, the person in possession thereof
has a prima facie authority to complete it by filling up the blanks therein. And a signature on a blank paper delivered by the
person making the signature in order that the paper may be converted into a negotiable instrument operates as a prima
facieauthority to fill it up as such for any amount.

Hence, the law merely requires that the instrument be in the possession of a person other than the drawer or maker. From such
possession, together with the fact that the instrument is wanting in a material particular, the law presumes agency to fill up the
blanks. Because of this, the burden of proving want of authority or that the authority granted was exceeded, is placed on the
person questioning such authority. Petitioner failed to fulfill this requirement.

SAN MIGUEL CORPORATION vs. PUZON

DOCTRINE: Considering that the second element of the crime of theft is that the thing taken belongs to another, it is relevant to
determine whether ownership of the subject check was transferred to petitioner. Under Sec. 12 of NIL, The instrument is not
invalid for the reason only that it is antedated or postdated, provided this is not done for an illegal or fraudulent purpose. The
person to whom an instrument so dated is delivered acquires the title thereto as of the date of delivery. However, that delivery
as the term is used in the aforementioned provision means that the party delivering did so for the purpose of giving effect
thereto. Otherwise, it cannot be said that there has been delivery of the negotiable instrument. Once there is delivery, the
person to whom the instrument is delivered gets the title to the instrument completely and irrevocably.

If the subject check was given by Puzon to SMC in payment of the obligation, the purpose of giving effect to the instrument is
evident thus title to or ownership of the check was transferred upon delivery. However, if the check was not given as payment,
there being no intent to give effect to the instrument, then ownership of the check was not transferred to SMC. The evidence
proves that the check was accepted, not as payment, but in accordance with the long-standing policy of SMC to require its
dealers to issue postdated checks to cover its receivables. The check was only meant to cover the transaction and in the
meantime Puzon was to pay for the transaction by some other means other than the check. This being so, title to the check did
not transfer to SMC; it remained with Puzon. The second element of the felony of theft was therefore not established. Petitioner
was not able to show that Puzon took a check that belonged to another. Hence, there was no probable cause for theft.

LUNARIA vs. PEOPLE

DOCTRINE: Petitioner makes much of the argument that the check was not "made" or "drawn" within the contemplation of the
law, nor was it for a consideration. Citing the Negotiable Instruments Law, Lunaria said the he could not have "drawn" and
"issued" the subject check because "it was not complete in form at the time it was given to Artaiz."

At the outset, it should be borne in mind that the exchange of the pre-signed checks without date and amount between the
parties had been their practice for almost a year by virtue of their money-lending business. They had authority to fill up blanks
upon information that a check can then be issued. Thus, under the Negotiable Instruments Law, Section 14 of which reads:
"Blanks, when may be filled. - Where the instrument is wanting in any material particular, the person in possession thereof has
prima facie authority to complete it by filling up the blanks therein. xxx"

This practice is allowed. Because of the presumption of authority, the burden of proof that there was no authority or that
authority granted was exceeded is carried by the person who questions such authority.

Records show that Lunaria had not proven lack of authority on the part of Artaiz to fill up such blanks. Having failed to prove lack
of authority, it can be presumed that Artaiz was within his rights to fill up blanks on the check.