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    Commercial Law (Dean Sundiang)

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    Gee Guevarra
    Commercial Law (Dean Sundiang)

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    Commercial Law (Dean Sundiang)

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    Gee Guevarra
    337 views17 pages
    Commercial Law (Dean Sundiang)

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    Commercial Law (Dean Sundiang)

    Copyright:

    © All Rights Reserved
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    Download as pdf
    337 views17 pages

    Commercial Law (Dean Sundiang)

    Uploaded by

    Gee Guevarra
    Commercial Law (Dean Sundiang)

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    © All Rights Reserved
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    [Negotiable Instruments Law ‘Accommodation Party Ultra Vires Act of a Corporation 1. Atty. Argel, in accommodation of his clients, the spouses Karl and Barbie Beltran, issued a check drawn against Royal Bank and payable to Krystel Filer. Since the check was under the account of Otcho Enterprises, Inc, the same was signed by its officers Atty. Argel and Santos. The check was dishonored for insufficiency of funds a) Is Otcho Enterprises, Inc. lisbleon the accommodation instrument? 'b) May its officers, Atty. Argel and Santos be held personaly liable? ‘Suggested Answers: 4) No, Oteho Enterprises, Ine. may not be held liable onthe accommodation instrument ‘Section 29 of the Negotiable Instruments Law provides that an accommodation party is one who has signed the instument as maker, drawer, acceptor, or indorser, without receiving. value ‘therefor, and forthe purpose of lending his name to some other person. Such petson is liable on the instrument to a holder for value, notwithstanding such holder, at the time of taking the instrament, knew him to be only an accommodation party ‘The provision does not include nor apply to corporations which are accommodation partis, This is because the issue or indorsement of negotiable paper by a corporation without consideration ‘and forthe accommodation of another i ula vires. Heace, one who has taken the instrument ‘with knowledge ofthe accommodation nature thereof cannot recover against a corporation where it is only an accommodation party. (CrisologosJose vs. Court of Appeals, GR 80599, 15 September 1989) “Hence, Otcho Enterprises, Ine. may not beheld ible, ‘consequences arising from their acts in connection therewith. (Crisolagovlose vs. Court of “Appeals, GR 80599, 15 September 1989) Hence, Atty, Argel and Santos maybe held personaly Hable Forgery ‘1 "The back side ofa chock isued by the Bureau of Treasury bears the following signatures, in this order. 1) Emir Pipo; 2) Luis Singson; 3) Jan Alonzo; and 4) Avon Reotuta. The check was tnceshed by Avon Reotuar at Republic Bank, which was later advised by the said bureau that the atloged indorsement on the reverse side ofthe aforesaid check by the payee, Emir Pipo was a forgery since the later had allegedly died. ‘Does the existence of one forged signature in a negotiable instrument render void all the other negotiations ofthe check with respec tothe other parties whose signature are genuine? ‘Suggested Answer: “No, the existence of ene forged signature in negotiable instrument will not reader void all the ‘ther negotiations of the check with respect othe ater parties whose signature are gomuine Itowas held in the case of Republic Bank vs. Bbrada, GR L-40796, 31 July 1975, where a check thas covera indorsements on it, it i only the negotiation based on the forged or unauthorized signatre which is inoperative. It is only the negotiation predicated on the forged indorsement that should be declared inoperative “The negotiation of the checkin question from Emir Pipo, the orginal payee, to Luis Singson, the second indorser, should be declared of n0 effect, but the negotiation ofthe aforesaid check from ‘Lis Singson to Jan Alonzo, the third indorser, and from Jan Alonzo to Avon Reotutar who did rot know of the forgery, should be considered valid and enforceable, baring any claim of foreery Roles, Chino later discovered that the check of P1,000 was altered to P91,000 and date was changed from Nov 24 to Nov 14. Hence, Chino demanded that Metrobank recredit the amount of 'P91,000,00 to his account. Metrobank, however, refused. 4) Ifyou were the lawyer for Metrobank, how would you counter the action for recovery’? 'b) May Chino recover from Metrobank? Suggested Answers: 8.) Asa lawyer for Metrobank, [ would advise that a Third-Party Complaint be filed agninst the collecting bank, Westmont Bank on account ofits unqualified indorsement stamped at the dorsal side of the check. As the unqualitiedindorser, it assumed the lability of general indorser, and thus, among others, warranted those mentioned ia Section 66 of the Negowable Instruments Law ‘hat the instrument is genuine and in all respect what it purports to be, valid and subsisting and that upon presentment the check shall be acceptod accdrding ois tenor. In addition, Metrobank, may claim that Chino was negligent and partly responsible in leaving spaces on the check, which made the frandulent insertion of the amount and figures thereon possible. ». Yes, Chino may recover from Metrobank, ‘The drawee bank, is under strict liability to pay tothe order of the payee in accordance with the Aeawer’s instructions as reflected onthe face and by the terms ofthe check. Payment made under materially altered instrument is not payment done in accordance with the instruction of the Arawor. Since the drawoe bank did not pay aooording to tho orignal tenor of the instrument, as rected by the drawer, then it has no right to claim reimbursement from the drawer, much less, the right to deduct the erronoous payment it made fiom the drawer's account which it was expected to treat with utmost fidelity. @fezrobamk vs. Cabilzo, G.R. No. 154469 06 December 2006. Section 124 of the Negotiable Instruments Law provides that where a negotiable instrument is trnterinll alter without the necent af all nartoeliahle theron ite unio mvoont a0 anainet » Crossed Cheek ‘A Tenorio Press issuod in favor of Jenny a posdated crossed check, ia payment of newsprint ‘gah Tenay promised to deliver. Jenny sold and negotiated the check to Excel In at discount Freel did aot ask fenay the purpose of eressng the check. Since Jenny failed to deliver the onan, Tenorio ordord the craweebenk to stop payment onthe check. Bors of Fool 49 collect from Tenorio filed. Excel wants to know ftom you as counsel a1) What ae the effects of rossing a check’? +b) Whether as second indore and holder af the erossed check, it holder in de corse? ©) Whether Tenoro's defense of lack of consideration as agaist Jenny is also availble as against Excel? Suggested Answers: 2.) The effets of erossing a check are: the chesk may not be encased but only deposited inthe hak; tbe chook say be negotiated oaly once to one who hasan aecount with «bank; andthe act Of crosing the check serves as a warning to the bolder that te chock has been isued for & Gefnite purpose so that he must inguir i he has reeived the check purus to tat purpose, Gthenwise he is not a bolder in due course. (Ccanpo », Gatchallan, GR No. 1-15126, 30 November 1961) 'b) No, the second indorser is nots holder in due course. In the case of Bataan Cigar and Cigarete Factory, Ine » Court of Appeals. Gr. No. 93048, 3 ‘March 1994, itwas held that crossing of checks should pu the holder on inquiry and upon im devolves the duty to ascertain the indorsers tle tothe check or the nature of his possesion. Failing in this respect, the holder i. declared guilty of goss negligence amounting to legal bsenve of good faith, contrary to Section 52(c) of the Negotiable Instruments Law, and as such, Material Alteration” 5. A check for P$0,000.00 was drawn against drawee bank and made payable to XYZ Marketing ‘or onder The check was deposited with payee's account at ABC Bank which then sent the check for clearing to drawee bank. The check was ishonoured by the drawee bank on ground thatthe serial number thereof had boen altered. XYZ: marketing sued the drawee bank Ist proper forthe drawee bank to dishonor the check for the reason that it had been altered?” Suggested Answer: No, it was improper fr the drawee bask to dishonor the check on the ground thatthe serat snurnbor thereof ad been altered “Am alteration is said to be material fit alters the éfectof the instrument. It is one wich changes the itoms which ate required to be stated under Section I ofthe Negotiable Instruments Law. The serial number of a check is not an essential requisite for negotibilty under Section 1. Its used merely to identify the issuing ageney. Is alteration had no material effect whatsoever on the integrity of the check. (Philippine National Bank v Court of Appeals, GR No. 107508, 25 April 1936) Complete, Undelivered (Section 16) 6, Development Bank of Rizal (DBR) seeks to collect from Marie P1,000,000 based on a promissory note issued by the latter. Marie, issued 2 crossed checks each worth P500,000 payable to DBR with the intent of setting ts account with DBR. For some reason the checks ‘wore never delivered to DBR oF any ofits aulorized representatives, The checks landed with Lee, who deposited it1o a different accouat even withont Marie's indorsement. The bank onthe other hand presumed regularity and credited the checks to Lee's account Can the Development Bank of Rizal sue Marie forthe value ofthe checks? 1 was held in the case of Development Bank or Rial v Sima Wel, GR No, 85419, 9 March 1993 that without the delivery of said checks to payee, it did not acquire any right or interest therein sand cannot therefore assert any cause of action founded on said checks against the drawer. ‘Therefore, Development Bank of Rizal cannot sue Marie for the value ofthe checks. Holder in due Course 7. Anita Gatchatian was interested in buying a car witen she was offered by Manuel Gonzales to ‘ear owned by the Ovanip, A grossed check for P60O payable to Ocampo was isued by Anita as evidence of her good faith, Gonzales said thatthe ctiesk will only befor safekeeping and will ‘be returned to her te following day. A Stop Payment Order was made by Anita for the failure of Gonzales to appeet. It was later found out that Gonzales used the check as payment to the campo clinic forthe hospitalization fees oF his wife and was given PIS8.25 as change May Ocampo be considered a holder in due course? Suggested Answer: 'No, Ocampo is nota holder in due course ‘Section 52 of the Negotiable Instruments Lav provides that @ holder in due course is a holder ‘who has taken the instrument under the following conditions: (c) That he took it in good faith and for value; and (—) That atthe time it was negotiated to him, he had no notice of any infirmity {nth instrament or defect in the tile ofthe person negotiating it ‘There are circumstances that should have put Ocampo to inguity as to the why Gonzales possessed the check aud why he used it pay the elinic. Anita hed no obligation or Hability to ‘the Ocampo Clini; the amount of the check did not comespond exactly with the obligation of Gonzales to Dr. Ocampo; and that it was a crossed check which means that the check could only be deposited but may aot be converted into cash. It was payee's duty to ascertain from the holder Manuel Gonzales what the nature of the latter’s tile to the check was or the nature of his Forgery 8, Twenty-three (23) checks issued by MWSS using its own personalized checks, instead of the official PNB Commercial blank checks were deposited by the payees Dizon, Sison and Mendoza in their respective current accounts with the PCIB and PBC. Thru the Central Bank Clearing, those checks were presented for payment by PCIB aad PBC to the defendant PNB, and were paid, At the time of their presentation to PNB, these checks bear the standard indorsement which reads “all prior indorsement and/or lack of endorsement guaranteed” Subsequent investigation however, conducted by the NBL showed that Dizon, Sison and Mendoza wete all fictitious persons. MWSS claims these checks to be forged and/or spurious although there are close similarities between the geauine signatures and the alleged forgeries. MWSS requested PNB to credit back the ammouat of these checks but PNB refased todo the same. a) IF you were MWSS, whet would your arguments be to support your claim of immediate restoration to your account forthe total amount of these checks? 1) If you were PNB, what would your arguments be to support your refusal to credit back the amouut claimed? ©) Ifyou were the judge, how would rule onthe case? Suggested Answers: ) ICT were MWSS, I would argue that since the signatures of the chocks were forgeries, the respondent drawee bank must bear the loss. A bank is bound to know the signatures of its ceustomors; and if it pays a forged check it must be considered as making the payment out ofits obligation funds, and cannot ordinarily charge the amount so paid to the account ofthe depositor whose name was forged 'b) IFT were PNB, T would argue that the checks in question were rogular on its face in all Fespects, including the genuineness ofthe signatures of authorized MWSS signing officers and there was nothing on it face that could have aroused any suspicion as to its genineness and duc execution; and that MWSS was guilty of negligence which was Uke proximate eause ofthe loss. ©) I would rein favor of PNB. The 23 checks were prepared by the MWSS using its own personalized checks, instead of the official PNB Commercial blank checks. In the exercise of this special privilege, however, the MWS failed 10 provide the needed security measures. There was gross negligence in the printing of i personalized checks. Even if the twenty-three (23) checks in question are considered forgeries, considering the gross negligence of MWSS, it is bared ftom seting up the defense of forgery. MWSS was in a better position to detect and prevent the fraudulent cencashment ofits checks, MASS v CA, G.R. No. 1-62943 14 July 1986) 9. Jun was about 10 leave for a business trp. AS his usual practic, lie signed several blank checks, He instructed Ruth, his seeretay, to fill them as payment for his obligations. Ruth filled ‘one check with her name as payee. She placed P30,000.00 thereon, indorsed and delivered it to ‘Marie, who accepted the cheek in good faith as payment for goods she delivered to Ruth Eventually, Ruth regretted what she did and apologized to Jun, Immediately he directed the

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