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Roman Catholic Bishop of Malolos, Inc. vs. IAC
Short Facts:
The Bishop of Malolos filed a complaint to force Robes-Francisco Realty to
pay the value of the land sold to them. The realty asked to pay in an
instalment basis but was only granted a grace period of 5 days after which
they failed to pay so they asked an extension of 30 days. This was denied
by the Bishop. The realty protested saying that they already tendered the
payment on the last day of the 5-day grace period but was not accepted
by the Bishop. Lower court said that if the realty has sufficient funds, it
would not have asked for an extension. IAC found out later that the realty
had sufficient funds and so they ruled that the realty had tendered
payment.
FACTS:
The Roman Catholic Bishop of Malolos, Inc. seeks the reversal of the
decision by the IAC ordering him to accept the balance being paid by
Robes-Francisco Realty and Development Corporation. The case arose
from a complaint filed by the Bishop of Malolos in order to force the realty
to pay the value of the land, which the petitioner sold to the company. The
realty was not able to pay the amount due on the stipulated date and
thereby asked the Bishop of Malolos to allow them to pay the amount due
in 3 equal instalments of 6 months each. Bishop of Malolos denied the
request but granted a grace period of five days. After the fifth day, Robes-
Francisco Realty wrote to the petitioner asking for an extension of 30 more
days which the Bishop of Malolos also denied through a formal letter.
Consequently, the realty protested saying that the petitioner refused to
accept tender of payment and demanded that the deed of absolute sale be
executed. Atty. Francisco, the president of Robes-Francisco Realty, insists
that she tendered payment on the last day of the five-day grace period.
However, the petitioner refused to accept it. Lower court said that if
indeed Atty. Francisco has enough funds at that time, she would not have
asked for a longer extension. The realty appealed the decision of the lower
court. This time, the IAC found that the realty had sufficient funds, thus
ipso facto concluded that the latter had tendered payment.
ISSUES:
1. W/N the finding that private respondent (the realty) had sufficient
funds (consisting of money market placement) is enough proof
that indeed it tendered payment for its obligation by the last day
of the grace period.
2. W/N an offer of a check is a valid tender of payment of an
obligation.
CADIZ. DELOS SANTOS. DYSANGCO. LENCIO. MANONGSONG. MONZON. PEDAYO. VERACRUZ.
HELD:
1. No.
2. No.
DECISION:
1. The fact that private respondent has sufficient funds on or before
the grace period does not constitute proof of tender of payment of
its obligation within said period since tender of payment involves a
positive and unconditional act by the obligor for his obligations.
Tender of payment cannot be presumed by mere inference from
surrounding circumstances.
2. The fact that respondent used a certified personal check to pay of
its obligation does not mean that he tendered valid payment. The
first paragraph of Art 1239 of the civil code provides that the
payment of debt in money shall be made in the currency stipulated
and if it is not possible to deliver such currency, the currency,
which is the legal tender in the Philippines.
As provided for in the case of Philippines Airlines vs. CA, a check does not
constitute valid tender of payment. Since negotiable instrument is only
substitute for money and not money, the delivery of such an instrument
does not operate as payment. This is true whether it is an ordinary or
managers check. Mere delivery of checks does not extinguish obligation
unless the actual document is realized. An offer of a check in payment of a
debt is not a valid tender of payment and may be refused receipt by the
obligee or creditor.
The offer of payment by respondent is not valid. The decision of the IAC
was annulled.
BPI Express Card Corporation vs. CA
Short Facts:
Atty. Marasigan who owns a BPI credit card failed to pay his credit on due
time because of a meeting in the province. He then issued a post-dated
check in P15,000 to cover the credit due. It was accepted by the bank.
Five days after issuing the check BPI informed through letter that Atty.
Marasigans credit card is suspended and he should refrain from using it.
He did not receive the letter until December 8 when Atty. Marasigan
entertained his guests in Caf Adriatico where his credit card was
dishonored.
FACTS:
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Private respondent, Atty. Ricardo Marasigan was given by BPI a credit card
with credit limit of P3,000.00 which increased eventually to P5,000.00. He
oftentimes exceeded his credit limit but this was never taken against him
by the bank even if he paid using a check.
On October 1989, he inadvertently failed to pay his credit due to some
meeting he had to attend in the Quezon province. As soon as he arrived,
he issued a post-dated check amounting to P15,000.00 to cover the
amount, which the petitioner bank accepted.
On November 28, or 5 days from the time he issued the check, the BPI
sent through ordinary mail a letter informing Atty. Marasigan of the
suspension of his credit privileges. He was also told through that same
letter to refrain from using the card in order to avoid embarrassing
situations. This letter was not received before December 8, 1989 when
Atty. Marasigan entertained some guests at Caf Adriatico. Since his credit
line was suspended, one of his guests had to pay the bill, embarrassing
him. Thus, respondent filed a complaint for damages against petitioner
bank, which was granted by the CA.
ISSUE: W/N the fact that an employee of the BPI express card
unconditionally accepted the subject post-dated check, amounts to tender
of payment.
RATIO: No, it does not amount to tender of payment.
HELD: BPI has a right to suspend the credit card of the private respondent
following the terms and conditions he signed. Since private respondent
made no payment within thirty days from his original billing/statement,
BPI has every right to suspend his credit privileges. The issuance of
private respondent of a post-dated check was not effective payment thus,
he still has not settled his obligation which justified BPIs action. Settled is
the doctrine that a check is only substitute for money and not money, thus
the delivery of such does not operate payment.
Caltex v. Court of Appeals
Legend:
Angel dela Cruz to whom the CTDs were issued; delivered the CDTs to
Caltex and to Security Bank
Security Bank issued CTDs; applied CTDs to offset bank loan
Caltex to whom the CTDs were delivered as security
Short Facts:
CADIZ. DELOS SANTOS. DYSANGCO. LENCIO. MANONGSONG. MONZON. PEDAYO. VERACRUZ.
Security Bank and Trust Company issued Certificates of Time Deposit in
favor of Angel dela Cruz. Dela Cruz then delivered the CTDs to Caltex in
connection with his purchase of fuel products. Dela Cruz claimed that the
CTDs were lost so the bank issued him another copy, resulting in two sets
of CTDs. Dela Cruz assigned the CTDs to Security Bank to offset the loan
he obtained from the bank. Caltex sought to verify the CDTs with the bank
but the bank, after Caltexs failure to provide information about its
transaction with Dela Cruz, used the CTDs as payment for Dela Cruzs
loan. Caltex filed a petition to collect the amount covered by the CTDs.
Facts:
On various dates, Security Bank and Trust Company (defendant)
issued 280 certificates of time deposit (CTDs) in favor of Angel dela
Cruz after dela Cruz deposited with them an aggregate amount of PHP
1,120,000.
Angel dela Cruz then delivered the said CTDs to plaintiff Caltex
(Phils), Inc. in connection with his purchase of fuel products from the
latter.
Subsequently, Angel dela Cruz informed Timoteo Tiangco, the banks
Sucat branch manager, that he lost all the CTDs. Dela Cruz filed an
Affidavit of Loss as requested by the bank and the bank replaced his
CTDs.
Mr. dela Cruz obtained a loan from the defendant bank and executed
a Deed of Assignment of Time Deposit, authorizing the bank to apply
the CTDs to the payment of whatever amount may be due on the loan
upon its maturity.
The Credit Manager of Caltex went to the bank and presented for
verification the CTDs delivered by dela Cruz, alleging that the same
were delivered to them as security for purchases made by the dela
Cruz with Caltex.
The defendant bank rejected the claim of Caltex after failing to furnish
a copy of document evidencing the said transaction involving Mr. dela
Cruz and Caltex.
The loan obtained by Mr. dela Cruz matured and the bank set off and
applied the time deposits in dispute to the payment of the loan.
Caltex filed a case with the RTC praying that the defendant bank be
ordered to pay them the aggregate value of the CTDs along with
accrued and compounded interests plus damages. RTC ruled in favor
the bank.
The case was brought to CA but the CA affirm the lower courts
decision and ruled that the CTDs were not negotiable instruments
therefore depriving Caltex the right over the value of the disputed time
deposits. This is because:
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o While the word BEARER appears on the instrument, the
document provides that the amount deposited shall be
repayable to the depositor.
o Thus the CTDs are not payable to whoever claims to be the
bearer but only to the depositor, who is Angel dela Cruz.
Issue:
1) Whether or not the CTDs are negotiable instruments
2) Whether or not the plaintiff is entitled to the amounts signified by the
CTDs
Held:
1) Yes. The CTDs are negotiable instruments. The CTDs meet the
requisites set forth in Section 1 of Act No 2031 (Negotiable Instruments
Law).
2) No. Caltex is not entitled to the amounts indicated in the CTDs.
Ratio:
First Issue:
Bone of contention is requisite (d): Must be payable to order or to bearer
The documents provide that the amount deposited shall be repayable
to the depositor. And in this case, according to the document, the
depositor is the bearer.
o The documents do not say that the depositor is Angel dela
Cruz. Rather the amounts are payable to BEARER or whoever
may be the bearer at the time of presentment.
o If it was really the intention of the bank to pay the amount to
dela Cruz only, it could have expressed such in clear and
categorical terms, instead of using the word bearer.
Angel dela Cruz is the depositor only insofar as the bank is concerned.
Other parties not privy to the transaction between Angel dela Cruz and
the bank would not be in a position to know that the depositor is not
the bearer stated in the CTDs.
o The Negotiable Instruments law seeks to avoid the need for
any party dealing with the instruments to go behind the plain
import of what is written on the face of the instrument to
unravel the true agreement of the parties.
Additional Doctrine to Remember:The negotiability or non-negotiability
of an instrument is determined from the writing, that is, from the
face of the instrument.
o While the writing may be read in light of surrounding
circumstances, the writing is the only outward and visible
expression of the parties intent. No other words are to be
added or substituted in its stead.
CADIZ. DELOS SANTOS. DYSANGCO. LENCIO. MANONGSONG. MONZON. PEDAYO. VERACRUZ.
o The duty of the court is ascertain, not what the parties may
have secretly intended versus what their words express, but
what is the meaning of the words they have used.
Second Issue:
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.
o The CTDs were delivered as mere security and not as
payment. This was evidenced by the Caltex Credit Managers
letter to the respondent which contained, among others, the
statement to guarantee his purchases of fuel products.
A negotiation for such purpose cannot be effected by
mere delivery of the instrument since the terms and
disposition of the security, in the event of non-
payment, must be provided for.
Both delivery and indorsement are required for this
kind of transaction.
o The Court held that there was no negotiation in the
sense of transfer of legal title to the CTDs in favor of the
petitioner. At most, the petitioner had the CTDs as holder
for value by reason of his lien.
Inciong v. CA
Legend:
Baldomero Inciong, Rene Naybe, Gregorio Pantanosa those who signed
the promissory note
Philippine Bank of Communications where they obtained the loan
Rudy Campos allegedly approached Inciong and invited him to join a
logs operations business
Short Facts:
Inciong, together with Naybe and Pantanosa, issued a promissory note in
favor of the Philippine Bank of Communications, obliging themselves to
pay P50,000 to said bank. They were invited by Campos to join the logs
operation business. The three debtors defaulted and the bank proceeded
against Inciong. Inciong, however, claims that his consent was vitiated by
fraud because he only intended to pay P5,000, while the promissory note
indicated P50,000. He claims that his allegations that fraud existed when
he signed the promissory note should be given merit by the court because
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parol evidence can overcome the contents of a PN, which is a mere witnesses," parol evidence may "overcome" the contents of the
commercial paper and not a public deed with formalities. promissory note.

Facts: Issue: W/N parol evidence may overcome the contents of a promissory
Inciongs liability resulted from the promissory note amounting to note.
P50,000.00 which he signed with Rene Naybe and Gregorio
Pantanosas, holding themselves solidarily liable to Philippine Bank Held: No. As a general rule: bills, notes and other instruments of a similar
of Communications. nature are not subject to be varied or contradicted by parol or extrinsic
o The promissors failed to pay on maturity. PBC sent telegrams evidence.
demanding payment thereof from Inciong. PBC then sent a
final letter of demand to Naybe. Ratio:
o Since both obligors did not respond to the demands, PBC filed The parol evidence rule does not specify that the written agreement
a complaint for collection of the sum of P50,000.00 against needs to be a public document. What is required is the agreement be
the three obligors. in writing:
o The complaint against Naybe and Pantanosas was later on "When the terms of an agreement have been reduced to
dismissed upon the motion of Inciong. Complaint against writing, it is considered as containing all the terms agreed
Inciong subsisted. upon and there can be, between the parties and their successors-
Inciong alleged that: in-interest, no evidence of such terms other than the contents of
o He was approached by Rudy Campos, who told him that he the written agreement."
was a partner of Pio Tio, the branch manager of PBC, in the
logs operation business. Campos invited him to join Naybe in o For the parol evidence rule to apply, a written contract need
the logs operation business, and assured him that their loan to not be in any particular form, or be signed by both parties.
PBC will be approved.
o He signed a promissory note with Naybe and Pantanosas. KEY TO NOTE that because the promissory note involved expressly
o He only agreed to be a co-maker for P5,000. He argues that states that the three signatories are jointly and severally liable, any
in signing the promissory note, his consent was vitiated one of them may be proceeded against for the entire obligation. The
by fraud as, contrary to their agreement that the loan PN reads:
was only for P5,000, the promissory note stated the
amount of P50,000. xxx I/we JOINTY and SEVERALLY promise to pay to the Philippine
Five copies of a blank promissory note were brought to Bank of Communications the sum of P50,000 xxx
him by Campos at his office. He affixed his signature
but in one copy, he indicated that he bound himself
only for the amount of P5,000.00.
The lower court, however, ruled against Inciong. His testimony was
uncorroborated. The court argued that:
o The typewritten figure "P50,000-" clearly appears directly
below the admitted signature of Inciong in the promissory
note.
o It was "rather odd" for petitioner to have indicated in a copy
and not in the original, of the promissory note, his supposed
obligation in the amount of P5,000.00 only.
o His
Inciong finally argues since the promissory note "is not a public
deed with the formalities prescribed by law but a mere
commercial paper which does not bear the signature of attesting

CADIZ. DELOS SANTOS. DYSANGCO. LENCIO. MANONGSONG. MONZON. PEDAYO. VERACRUZ.