Caltex (Philippines) vs.

CA (212 SCRA 448, 10 August 1992)

Facts:
Security bank issued Certificates of Time Deposit to Angel Dela Cruz which she
later used to purchase fuel products from Caltex. However, later after the said
transaction, Angel Dela Cruz went to the issuing bank and claimed that the CTDs
were lost.

Upon compliance with some formal requirements, Angel was issued

replacements. Thereafter, he secured a loan from the bank where he assigned
the certificates as security. Here comes the petitioner, averred that the
certificates were not actually lost but were given as security for payment for fuel
purchases.
The bank demanded some proof of the agreement but the petitioner failed to
comply. The loan matured and the time deposits were terminated and then
applied to the payment of the loan.
Calex demands the payment of the certificates but to no avail.

Issue:
Whether or not  a certificate of time deposit is a negotiable instrument.

Held:
Yes. The Court ruled that the certificates of time deposit are negotiable
instruments as they meet the requirements provided for by law.

For an an instrument to be negotiable, it must conform to the requirements, as

follows:
Section 1 of the Negotiable Instruments Law.
It must be in writing and signed by the maker or drawer;
Must contain an unconditional promise or order to pay a sum certain in money;
Must be payable on demand, or at a fixed or determinable future time;
Must be payable to order or to bearer; and
Where the instrument is addressed to a drawee, he must be named or otherwise
indicated therein with reasonable certainty.