Equitable Banking Corporation vs.

IAC Casville then sent three postdated checks to Nell to equal the 427,300 that
Petitioners: Edward Nell was paid as a marginal deposit. The post dated checks from Casville were
Respondents: Liberato Casals, Equitable Banking Corporation intended to cover the checks issued by Nell to Equitable they also registered
the garrett skidders under a chattel mortgage.
DOCTRINE
Nell eventually tried to cash the checks with Equitable Bank but these checks
Where the instrument is payable to order, the payee must be named or where dishonored, they were also informed that the 427,300 line of credit
otherwise indicated therein with reasonable certainty. they extended to Casals were deposited in to Casals account with Equitable
Bank and were withdrawn. Nell accuses Equitable Bank to be solidarily liable
with Casals
PROVISION
Sec. 8. When payable to order. - The instrument is payable to order
where it is drawn payable to the order of a specified person or to him or ISSUES
his order. It may be drawn payable to the order of :
1. W/N Equitable Bank is liable to Edward Nell?
(a) A payee who is not maker, drawer, or drawee; or
RULING & RATIO
(b) The drawer or maker; or No. The subject check was ambiguous. The payee was not indicated with
reasonable certainty. The Court finds that the check in question was payable
(c) The drawee; or only to the defendant bank and to no one else. Although the words "A/C OF
CASVILLE ENTERPRISES INC. "appear on the face of the check after or
(d) Two or more payees jointly; or under the name of defendant bank, the payee was still the latter. The
addition of said words did not in any way make Casville Enterprises, Inc. the
(e) One or some of several payees; or payee of the instrument for the words merely indicated for whose account or
in connection with what account the check was issued by the plaintiff. In this
(f) The holder of an office for the time being. case it was Nell who caused the obscurity and according to Article 1377 of
the Civil Code. The interpretation shall not favor the one who caused the
Where the instrument is payable to order, the payee must be named or obscurity.
otherwise indicated therein with reasonable certainty.
DISPOSITION
FACTS Equitable Banking Corporation is absolved from any and all liabilities to the
private respondent, Edward J. Nell Company
Liberato Casals went to plaintiff Edward J. Nell Company that he was
interested in buying one of the plaintiff's garrett skidders. Nell was a dealer of
machineries, equipment and supplies. Casals was president of Casville
Enterprises, Inc. which had a credit line with Equitable Banking Corporation.
Casals informed Nell Co. that its application for a letter of credit had been
approved by Equitablebut informed the company that a sum of P427,300 was
needed to stand as collateral in favor of Equitable Bank and change the
registry of the property. Nell Co. issued a check for the said amount in favor
of Equitable even if the marginal deposit were supposed to be produced by
Casville. This check read:

payable to the "order of EQUITABLE BANKING CORPORATION A/C

CASVILLE ENTERPRISES, INC."

Kool Kids 2016 | ALS 2D N-08-04-Equitable-Banking-v.-IAC.pdf

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