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    Caltex Vs CA

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    Hiroshi Carlos
    The court held that: 1) The certificates of time deposit (CTDs) issued by the private respondent bank were negotiable instruments as they stated that the amount was repayable to the "bearer". 2) However, the petitioner could not rightfully recover the amounts of the CTDs as there was no valid negotiation through endorsement and delivery, even if the CTDs were bearer instruments. 3) The CTDs were admitted by the petitioner to have been provided by Cruz as security for fuel purchases in a letter to the private respondent, and this admission is conclusive under the doctrine of estoppel.

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    Caltex Vs CA

    Uploaded by

    Hiroshi Carlos
    108 views6 pages
    The court held that: 1) The certificates of time deposit (CTDs) issued by the private respondent bank were negotiable instruments as they stated that the amount was repayable to the "bearer". 2) However, the petitioner could not rightfully recover the amounts of the CTDs as there was no valid negotiation through endorsement and delivery, even if the CTDs were bearer instruments. 3) The CTDs were admitted by the petitioner to have been provided by Cruz as security for fuel purchases in a letter to the private respondent, and this admission is conclusive under the doctrine of estoppel.

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    Caltex vs CA

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    The court held that: 1) The certificates of time deposit (CTDs) issued by the private respondent bank were negotiable instruments as they stated that the amount was repayable to the "bearer". 2) However, the petitioner could not rightfully recover the amounts of the CTDs as there was no valid negotiation through endorsement and delivery, even if the CTDs were bearer instruments. 3) The CTDs were admitted by the petitioner to have been provided by Cruz as security for fuel purchases in a letter to the private respondent, and this admission is conclusive under the doctrine of estoppel.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    108 views6 pages

    Caltex Vs CA

    Uploaded by

    Hiroshi Carlos
    The court held that: 1) The certificates of time deposit (CTDs) issued by the private respondent bank were negotiable instruments as they stated that the amount was repayable to the "bearer". 2) However, the petitioner could not rightfully recover the amounts of the CTDs as there was no valid negotiation through endorsement and delivery, even if the CTDs were bearer instruments. 3) The CTDs were admitted by the petitioner to have been provided by Cruz as security for fuel purchases in a letter to the private respondent, and this admission is conclusive under the doctrine of estoppel.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 6

    Caltex vs CA

    G.R. No. 97753


    August 10, 1992
    Petitioner: CALTEX (PHILIPPINES), INC.
    Respondents: COURT OF APPEALS and SECURITY BANK
    AND TRUST COMPANY
    Topic: Elements of N.I; Indorsement; estoppel
    Facts:
    Private respondent Security Bank and Trust
    Company, a commercial banking institution, issued
    several certificates of time deposit in favor of Angel dela
    Cruz, a depositor of Private Respondent.
    Cruz delivered such CTDs to the Petitioner as proof
    of payment for the formers purchase of fuel products
    from the latter. However, Cruz informed Private
    Respondent that the CTDs were lost and asked for the reissuance of copies of the CTDs which the latter did.
    Thereafter, Cruz negotiated and obtained a loan from
    Private Respondent. In order to satisfy the loan, Cruz
    executed a notarized Deed of Assignment of Time Deposit
    which authorizes the Private Respondent to apply the
    CTDs to his loan upon maturity.
    Subsequently, Petitioner went to the defendant for
    the verification of the CTDs and asked the Private
    Respondent to pre-terminate the same.

    PR requested Petitioner to furnish the former a copy


    of the document evidencing the guarantee agreement
    with Cruz and the details of Cruzs obligations against the
    Petitioner but the latter failed to do so, therefore,
    Petitioners demand and claim for payment was rejected
    by the PR.
    The loan matured and fell due hence the PR set-off
    and applied the CTDs to satisfy the loan.
    Petitioner filed a complaint praying that PR pay the
    former the sum of money covered by the CTDs. The
    complaint was however dismissed by the trial court on
    the ground that the CTDs were non-negotiable
    considering that the word of the instrument indicates that
    it is only repayable to the depositor and the word
    bearer in the said instrument only refers to the
    depositor itself.
    Issue:
    1)WON the CTDs in this case are negotiable.
    2)WON Petitioner can rightfully recover on the CTDs.
    3)WON the CTDs were intended as payment for the
    purchase of the fuel products.
    Held:
    1)Yes. On this score, the accepted rule is that the
    negotiability or non-negotiability of an instrument is
    determined from the writing, that is, from the face of
    the instrument itself. The duty of the court in such
    case is to ascertain, not what the parties may have

    secretly intended as contradistinguished from what


    their words express, but what is the meaning of the
    words they have used. What the parties meant must
    be determined by what they said.
    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.
    On the wordings of the documents, therefore, the
    amounts deposited are repayable to whoever may be
    the bearer thereof. Thus, petitioner's aforesaid
    witness merely declared that Angel de la Cruz is the
    depositor "insofar as the bank is concerned," but
    obviously other parties not privy to the transaction
    between them would not be in a position to know
    that the depositor is not the bearer stated in the
    CTDs.
    2)No. Unfortunately for petitioner, although the CTDs
    are bearer instruments, a valid negotiation thereof
    for the true purpose and agreement between it and
    De la Cruz, as ultimately ascertained, requires both
    delivery and indorsement.
    Under the Negotiable Instruments Law, an
    instrument is negotiated when it is transferred from
    one person to another in such a manner as to
    constitute the transferee the holder thereof, and a
    holder may be the payee or indorsee of a bill or note,

    who is in possession of it, or the bearer thereof. In


    the present case, however, there was no negotiation
    in the sense of a transfer of the legal title to the
    CTDs in favor of petitioner in which situation, for
    obvious reasons, mere delivery of the bearer CTDs
    would have sufficed.

    3)No. In a letter addressed to PR, Petitioner wrote: ". . .


    These certificates of deposit were negotiated to us by
    Mr. Angel dela Cruz to guarantee his purchases of
    fuel products".
    This admission is conclusive upon petitioner, its
    protestations notwithstanding. Under the doctrine of
    estoppel, an admission or representation is rendered
    conclusive upon the person making it, and cannot be
    denied or disproved as against the person relying
    thereon.

    Doctrines:
    1. This need for resort to extrinsic evidence is what is
    sought to be avoided by the Negotiable
    Instruments Law and calls for the application of the
    elementary rule that the interpretation of obscure
    words or stipulations in a contract shall not favor
    the party who caused the obscurity.
    - The person who made the obscurity in the
    instrument is estopped from claiming the
    otherwise he stated.

    2. Under the doctrine of estoppel, an admission or


    representation is rendered conclusive upon the
    person making it, and cannot be denied or
    disproved as against the person relying thereon.
    3. Accordingly, a negotiation for such purpose cannot
    be effected by mere delivery of the instrument
    since, necessarily, the terms thereof and the
    subsequent disposition of such security, in the
    event of non-payment of the principal obligation,
    must be contractually provided for.
    - Indorsement and delivery are necessary for the
    validity of the negotiable instrument.
    4. Under the Negotiable Instruments Law, an
    instrument is negotiated when it is transferred
    from one person to another in such a manner as to
    constitute the transferee the holder thereof, and a
    holder may be the payee or indorsee of a bill or
    note, who is in possession of it, or the bearer
    thereof.
    - How is an instrument negotiated?
    5. The pertinent law on this point is that where the
    holder has a lien on the instrument arising from
    contract, he is deemed a holder for value to the
    extent of his lien.
    - Holder who has lien on the instrument is
    considered as a holder for value to the extent of
    his lien.
    6. As such holder of collateral security, he would be a
    pledgee but the requirements therefor and the
    effects thereof, not being provided for by the
    Negotiable Instruments Law, shall be governed by

    the Civil Code provisions on pledge of incorporeal


    rights.
    - Pledge and security, not being covered by NIL, is
    goverened by the CC.

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