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Negotiable Instruments Law (NIL)

Syllabus

I. General Consideration

a. Governing Law
b. History of NIL
c. Functions of Negotiable Instruments

Cases:

BPI vs. Spouses Royeco, GR 176664, July 21, 2008

Firestone Tire & Rubber vs. CA, GR 113236, March 5, 2001
Cebu International vs. CA & Alegre, GR 123031, October 12, 1999
Papa vs. AU Valencia, GR 105188, January 23, 1998

d. Features of Negotiable Instruments

e. Kinds of Negotiable Instruments
f. Parties to Negotiable Instruments
g. Distinguished from Non-negotiable Instruments

Case:

Sesbreno vs. CA, GR 89252, May 24, 1993

h. Incidents or stages in the life of a negotiable instrument

II. Negotiability

a. How to determine negotiability

b. Effect of estoppel
c. Requisites of Negotiability

Cases:

Caltex vs. CA, GR 97753, August 10, 1992

Metrobank vs. CA, GR 88866, February 18, 1991
Phil. Educ. vs. Soriano, GR L-22405, June 30, 1971

i. Must be in writing
ii. Must contain an unconditional promise or order to pay a sum
certain in money
iii. Payable on demand or at a fixed or determinable future time
iv. Payable to order or bearer
Cases: PNB vs Rodriguez, GR 170325, Sep. 26, 2008
Ang Tek vs. CA, GR L-2516, Sep. 25, 1950

d. Omissions and provisions that do not affect negotiability

Ilano vs. Espaol, GR 161756, Dec. 16, 2005

III. Interpretation of Instruments

a. Rules that apply in case of ambiguity

Cases:

Sps. Evangelista vs. Mercator, GR 148864, Aug. 21, 2003

Sapiera vs. CA, GR 128927, Sep. 14, 1999
People vs. Romero, GR 112985, April 21, 1999

IV. Transfer and Negotiation

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a. Modes of Transfer
b. How negotiation takes place

Case: BPI vs. CA, GR 136202, Jan. 25, 2007

c. Indorsement

Case: Far East vs. Gold Palace, GR 168274, Aug. 20, 2008

d. Negotiation by prior party

e. Striking out of indorsement
f. Consideration for issuance and subsequent transfer

V. Holders
a. Rights of holders in due course
b. Holders in due course

Cases:

Dino vs. Loot, GR 170912, Apr. 19, 2010

Sps. Violago vs. BA Finance, GR 158262, July 21, 2008
Hi-Cement vs. Insular Bank, GR 132403, Sep. 28, 2007
Yang vs. CA, GR 138074, Aug. 15, 2003
Atrium vs. CA, GR 109491, Feb. 28, 2001
Mesina vs. IAC, GR 70145, Nov. 13, 1986
De Ocampo vs. Gatchalian, GR L-15126, Nov. 30, 1961
i. Rights of holders in due course
c. Shelter rule
d. Rights of holder in bills in set

VI. Parties who are liable

a. Maker

Case:

Astro Electronics vs. Phil. Export, GR 136729, Sep. 23, 2003

b. Drawer
c. Acceptor

Cases:

Far East vs. Gold Palace, GR 168274, August 20, 2008

Phil. Commercial vs. CA, GR 121413, Jan. 29, 2001

d. Indorser

Cases

Metrobank vs. BA Finance, GR 179952, December 4, 2009

Allied bank vs. Lim Sio Wan, GR 133179, Mar. 27, 2008
Metrobank vs. Phil Bank, GR 141408, Oct. 18, 2007
Gonzales vs. RCBC, GR 156294, Nov. 29, 2006
BPI vs. CA, GR 112392, Feb. 29, 2000
Metropol vs. Sambok, GR L-39641, Feb. 28, 1983

e. Persons negotiating by delivery

f. Agent

Cases:

Solid bank vs. Mindanao, GR 153535, July 28, 2005

Francisco vs. CA, GR 116320, Nov. 29, 1999
Phil. Bank of Commerce vs. Aruego, GR L-25836-37, Jan. 31, 1981
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g. Accommodation Parties

Cases:

Aglibot vs. Santia, GR 185945, December 5, 2012

Gonzales vs. Phil Comm, GR 180257, Feb. 23, 2011
Garcia vs. Llamas, GR 154127, Dec. 8, 2003
Agro vs. CA, GR 117660, Dec. 18, 2000
Travel on vs. CA, GR L-561169, June 26, 1992
Stelco vs. CA, GR 96160, June 17, 1992
Crisologo vs. CA, GR 80599, Sep. 1989
Sadaya vs. Sevilla, GR L-17845, Apr. 27, 1967

VII. Defenses

a. Minority and other causes of incapacity

b. Non-delivery vs. Conditional Delivery

Cases:

RCBC vs. Hi Tri, GR 192413, June 13, 2012

Bank of America vs. Phil. Racing, GR 150228, July 30, 2009
Dy vs. People, GR 158312, Nov. 14, 2008
Development Bank vs. Sima, GR 85419, Mar. 9, 1993

c. Filling up blanks
d. Fraud
e. Material Alteration

Cases:

Metrobank vs. Cabilzo, GR 154469, Dec. 6, 2006

International Corporate Bank vs. CA, GR 129910, Sep. 5, 2006
PNB vs. CA, GR 107508, Apr. 25, 1996
Montinola vs. PNB, GR L-2861, Feb. 26, 1951

f. Ante Dating or Post Dating

g. Insertion of a wrong date
h. Absence or failure of consideration
i. Duress and intimidation
j. Illegality
k. Prescription
l. Forgery

Cases:

Samsung vs. Far East, GR 129015, Aug. 13, 2004

BPI vs. Casa, GR 149454, May 28, 2004
Ilusorio vs. CA, GR 139130, Nov. 27, 2002
Westmont vs. Ong, GR 132560, Nov. 27, 2002
Phil. Commercial vs. CA, GR 121413, Jan. 29, 2001
Associated Bank vs. CA, GR 107382, Jan. 31, 1996
Gempesaw vs. CA, GR 92244, Feb. 9, 1993
Republic Bank vs. CA, GR 42725, April 22, 1991
Banco de Oro vs. Equitable Banking, GR 74917, Jan. 20, 1988
MWSS vs. CA, GR L-62943, July 14, 1986
Metrobank vs. The First National, GR L-55079, Nov. 19, 1982
Jai-Alai vs. BPI, GR L-29432, Aug. 6, 1975
Republic Bank vs. Ebrada, GR L-40796, July 31, 1975

VIII. Enforcement of Liability

a. Steps to charge parties liable
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b. Presentment for payment

Cases:

International Corporate vs. Sps. Gueco, GR 141968, Feb. 12, 2001

Wong vs. CA, GR 117857, Feb. 2, 2001

c. Presentment and Acceptance

Case: Prudential vs. IAC, GR 74886, Dec. 8, 1992

d. Acceptance
e. Notice of dishonor

Cases:

Gonzales vs. Philippine Commercial, GR 180257, Feb. 23, 2011

Lopez vs. People, GR 166810, June 26, 2008
State Investment vs. CA, GR 101163, Jan. 11, 1993

f. Rules regarding foreign bills

Cases:

Velasquez vs. Solidbank, GR 157309, Mar. 28, 2008

BPI vs. CIR, GR 137002, July 27, 2006
Allied Bank vs. CA, GR 125851, July 11, 2006

IX. Discharge
a. Discharge of persons primarily liable
i. Payment in due course
ii. Renunciation
iii. Cancellation

Case: State Investment vs. Moulic, GR 101163, Jan. 11, 1993

iv. Acts that discharge simple contracts

Case: Salazar vs. Brothers, GR 171998, October 20, 2010

v. Principal Debtor becomes the holder

b. Discharge of persons secondarily liable

i. Discharge of prior party

ii. Tender of payment
iii. Release of principal debtor
iv. Extension of term

X. Checks

a. Kinds of checks
i. Cashier’s and managers

Cases:

RCBC vs. Hi Tri, GR 192413, June 13, 2012

SBTC vs. RCBC, GR 170984, Jan. 30, 2009
BPI vs Roxas, GR 157833, Oct. 15, 2007
Equitable vs. Ong, GR 156207, Sep. 15, 2006

ii. Certified Checks

iii. Cross checks

Cases:
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Salazar vs. JY Brothers, GR 171998, October 20, 2010

Bank of America vs. Associated, GR 141001, May 21, 2009
People vs. Reyes, GR 154159, Mar. 31, 2005
Bataan Cigar vs. Ca, GR 93048, Mar. 3, 1994

iv. Memorandum and Traveller’s Checks

b. Checks and ordinary bills of exchange

c. Relationship between payee, drawee and drawer

Cases:

Villanueva vs. Nilte, GR 148211, July 25, 2006

Tan vs. CA, GR 108555, December 20, 1994
Citytrust vs. IAC, GR 84281, May 27, 1994

d. Collection of Checks
e. Stopping of Payment
i. Ironclad rule
f. Crimes involving Checks

Case: Macalalag vs. People, GR 164358, Dec. 20, 2006