SURIGAO CENTURY SAWMILL CO. vs.

COURT OF APPEALS
218 SCRA 619, February 9, 1993
Facts: Standard Plywood Corporation (STANDARD) leased a barge, LCT 'TANTOY," from
Surigao Century Sawmill Co., Inc. (SURIGAO), for delivery of plywood from Butuan City to its
consignee, A-1 Construction, Inc. in Surigao City. This was covered by a Contract of Lease and
a bill of lading. The cargo was insured by Phoenix Assurance Co., Inc.
The shipment failed to reach the consignee resulting in damages to STANDARD. Consequently,
Phoenix settled its obligation to STANDARD and, was subrogated to the rights and interest of
the latter. Failing to satisfy it’s demand to SURIGAO, PHOENIX filed a complaint with Manila
RTC. SURIGAO filed a motion to dismiss on the ground of improper venue citing stipulation in
the lease contract of the barge that any disagreement arising out of the lease shall be settled in
the proper court in Surigao del Norte.
Issue: Whether the bill of lading should prevail over the lease contract for purpose of venue.
Ruling: Yes. In determining which document should prevail, we should look into the real intent
of the parties and/or the characteristics of the documents. A bill of lading serves three distinct
functions: first, as a receipt for the goods; second, as contract of carriage; and third, as
documentary evidence of title to the goods. The reliance, therefore, of private respondent
Phoenix on the bill of lading which serves in the contract of carriage to support its cause of
action against petitioner is well-taken. The cause of action is the recovery of the damage ex-
contractu on account and on the basis of the bill of lading.
FAR EAST BANK AND TRUST COMPANY vs. QUERIMIT
G.R. No. 148582, January 16, 2002
Facts: Respondent Estrella Querimit was issued four Certificates of Deposit by the petitioner
Far East Bank and Trust Company (FEBTC) pursuant to her deposit amounting to $60,000.00.
The certificates were payable to bearer at 4.5% interest per annum. Respondent kept her
dollars in the bank to earn interest and so that she could use it after retirement.
After respondent’s husband died, she went to FEBTC to withdraw her deposit but the latter
refused, saying that Querimit’s husband has already withdrawn the money. In trial, the RTC
favored Querimit, ruling that FEBTC failed to prove that the certificates of deposit were paid out
of its funds since the subject certificates remain with Querimit. Court of Appeals affirmed, hence
this petition.
Issue: Whether the subject certificates of deposit were paid out by the petitioner
Ruling: No. The principles governing other types of bank deposits are applicable to certificates
of deposit, as are the rules governing promissory notes when they contain an unconditional
promise to pay a sum certain of money absolutely. The principle that payment, in order to
discharge a debt, must be made to someone authorized to receive it is applicable to the
payment of certificates of deposit. Thus, a bank will be protected in making payment to the
holder of a certificate indorsed by the payee, unless it has notice of the invalidity of the
indorsement or the holder’s want of title. A bank acts at its peril when it pays deposits evidenced
by a certificate of deposit, without its production and surrender after proper indorsement. As a
rule, one who pleads payment has the burden of proving it. Even where the plaintiff must allege
non-payment, the general rule is that the burden rests on the defendant to prove payment,
rather than on the plaintiff to prove payment. The debtor has the burden of showing with legal
certainty that the obligation has been discharged by payment.
In this case, the certificates of deposit were clearly marked payable to “bearer,” which means, to
“[t]he person in possession of an instrument, document of title or security payable to bearer or
indorsed in blank.” Petitioner should not have paid respondent’s husband or any third party
without requiring the surrender of the certificates of deposit.
ABUBAKAR vs. THE AUDITOR GENERAL
81 Phil. 359,
Facts: Respondent Auditor General refused to authorize the payment of treasure warrant for
P1000 which was issued in favor of Placido S. Urbanes, but is now in the hands of Benjamin
Abbubakar.
The petitioner argues that he is a holder in good faith and for value of a negotiable instrument
and is entitled to the rights and privileges of a holder in due course, free from defenses.
Issue: Whether the subject treasury warrants are within the scope of the Negotiable
Instruments Law.
Ruling: No. 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. (Section 3 last sentence and section 1[b] of the Negotiable Instruments Law.) In the
United States, government warrants for the payment of money are not negotiable instruments
nor commercial paper.