G. R. No.

97753(212 SCRA 448) 10 August 1992

CALTEX (PHILIPPINES), INC., petitioner,

vs.
COURT OF APPEALS and SECURITY BANK AND TRUST COMPANY, respondents.

FACTS:

This case involves a petition for review on certiorari, seeks for reversal of the decision of
the respondent court (CA-G.R. CV No. 236151) which affirms and modify, the decision of the
RTC; dismissing the complaint filed therein by herein petitioner against respondent bank. Thus,
this was brought by the facts that the Security Bank and Trust Company (Security Bank), a
commercial banking institution, issued 280 certificates of time deposit (CTDs) in favor of Angel
dela Cruz and then deposited it to the Security Bank the total amounting to P1,120,000.00.
Thereafter, Angel purchase fuels products at Caltex using CTDs but informed the bank Manager
of respondent Bank that she lost all CTDs accompanied by her affidavit of loss; she then received
a placement. Nevertheless, Angel obtained a loan from Security Bank amounting to P875,000.00
effected with a notarized Deed of Assignment of Time Deposit. In some time, the credit manager
from petitioner Bank verifies the CTDs declared lost by Angel, which thereafter inform the Security
Bank that it’s on their possession. Therefore, the Security Band requested for the copy the
following from the Caltex:
1. a copy of the document evidencing the guarantee agreement with Mr. Angel dela Cruz;
and
2. the details of Mr. Angel's obligation against which Caltex proposed to apply the time
deposits
However, Caltex refused it, despite the demand from Security bank, which resulted to rejection
on the demand of Caltex for payment, until such time the CTDs were set off due to matured loan.
The petitioner filed a complaint to the RTC but then declared dismissed.

ISSUE:
Whether CTDs are negotiable.
RULING:
Yes, the SC held that the negotiability or non-negotiability of an instrument is determined
from the writing, that is, from the face of the instrument itself. Provided under Section 1 Act No.
2031, otherwise known as the Negotiable Instruments Law, enumerates the requisites for an
instrument to become negotiable:
(a) It must be in writing and signed by the maker or drawer;
(b) Must contain an unconditional promise or order to pay a sum certain in money;
(c) Must be payable on demand, or at a fixed or determinable future time;
(d) Must be payable to order or to bearer; and -check
(e) Where the instrument is addressed to a drawee, he must be named or otherwise indicated
therein with reasonable certainty.

Further, the documents provide that the amounts deposited shall be repayable to the
depositor. Nevertheless, if it was really the intention of respondent bank to pay the amount to
Angel de la Cruz only, it could have with facility so expressed that fact in clear and categorical
terms in the documents, instead of having the word "BEARER" stamped on the space provided
for the name of the depositor in each CTD.