nil case digest compilation

7/17/2019 NIL Case Digest Compilation

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1. Bataan Cigar v. CA

BATAAN CIGAR AND CIGARETTE FACTORY, INC. , petitioner , vs. THE COURT OF APPEALS and STATEINVESTENT HOUSE, INC. , respondents.

SYLLABUS

COMMERCIAL LAW; NEGOTIABLE INSTRUMENTS LAW;HOLDER IN DUE COURSE; REQUISITES. — The NegotiabeI!"t#$%e!t" La& "tate" &hat 'o!"tit$te" a ho(e# i! ($e'o$#"e, th$") *Se'. + - A ho(e# i! ($e 'o$#"e i" a ho(e#&ho ha" tae! the i!"t#$%e!t $!(e# the /oo&i!g'o!(itio!") 0a1 That it i" 'o%2ete a!( #eg$a# $2o! it" /a'e;0b1 That he be'a%e the ho(e# o/ it be/o#e it &a" o3e#($e,a!( &itho$t !oti'e that it ha( bee! 2#e3io$"4 (i"ho!o#e(, i/ "$'h &a" the /a't; 0'1 That he too it i! goo( /aith a!( /o#3a$e; 0(1 That at the ti%e it &a" !egotiate( to hi% he ha(!o !oti'e o/ a!4 i!5#%it4 i! the i!"t#$%e!t o# (e/e't i! thetite o/ the 2e#"o! !egotiati!g it.*

ID.; ID.; E6ER7 HOLDER DEEMED PRIMA FACIE HOLDER INDUE COURSE. — Se'tio! +8 o/ the NIL /$#the# "tate" thate3e#4 ho(e# i" (ee%e( prima facie a ho(e# i! ($e 'o$#"e.Ho&e3e#, &he! it i" "ho&! that the tite o/ a!4 2e#"o! &hoha" !egotiate( the i!"t#$%e!t &a" (e/e'ti3e, the b$#(e! i"o! the ho(e# to 2#o3e that he o# "o%e 2e#"o! $!(e# &ho%he 'ai%", a'9$i#e( the tite a" ho(e# i! ($e 'o$#"e.

ID.; ID.; CHEC:; DEINED. — A 'he' i" (e5!e( b4 a& a" abi o/ e<'ha!ge (#a&! o! a ba! 2a4abe o! (e%a!(.

ID.; ID.; ID.; CROSSED CHEC:; :INDS. — C#o""e( 'he' i"o!e &he#e t&o 2a#ae i!e" a#e (#a&! a'#o"" it" /a'e o#a'#o"" a 'o#!e# the#eo/. It %a4 '#o""e( ge!e#a4 o#

"2e'ia4. A 'he' i" '#o""e( "2e'ia4 &he! the !a%e o/ a2a#ti'$a# ba!e# o# a 'o%2a!4 i" &#itte! bet&ee! the2a#ae i!e" (#a&!. It i" '#o""e( ge!e#a4 &he! o!4 the&o#(" *a!( 'o%2a!4* a#e &#itte! o# !othi!g i" &#itte! at abet&ee! the 2a#ae i!e". It %a4 be i""$e( "o that

2#e"e!t%e!t 'a! be %a(e o!4 b4 a ba!. 6e#itab4 theNegotiabe I!"t#$%e!t" La& 0NIL1 (oe" !ot %e!tio! *'#o""e('he'",* atho$gh A#ti'e +=> o/ the Co(e o/ Co%%e#'e#e/e#" to "$'h i!"t#$%e!t".

ID.; ID.; ID.; NEGOTIABILIT7 NOT AECTED B7 ITS BEINGCROSSED. — A''o#(i!g to 'o%%e!tato#", the !egotiabiit4o/ a 'he' i" !ot a e'te( b4 it" bei!g '#o""e(, &hethe#"2e'ia4 o# ge!e#a4. It %a4 ega4 be !egotiate( /#o% o!e2e#"o! to a!othe# a" o!g a" the o!e &ho e!'a"he" the'he' &ith the (#a&ee ba! i" a!othe# ba!, o# i/ it i"

e"2e'ia4 '#o""e(, b4 the ba! %e!tio!e( bet&ee! the2a#ae i!e". Thi" i" "2e'ia4 t#$e i! E!ga!( &he#e theNegotiabe I!"t#$%e!t La& o#igi!ate(.

ID.; ID.; ID.; EECTS O CROSSING A CHEC:. — C#o""i!g o/ a 'he' "ho$( ha3e the /oo&i!g e e't") 0a1 the 'he' %a4not be e!'a"he( b$t o!4 (e2o"ite( i! the ba!; 0b1 the'he' %a4 be !egotiate( o!4 o!'e — to o!e &ho ha" a!a''o$!t &ith a ba!; 0'1 a!( the a't o/ '#o""i!g the 'he'"e#3e" a" warning to the ho(e# that the 'he' ha" bee!i""$e( /o# a denite purpose "o that he %$"t i!9$i#e i/ he

ha" #e'ei3e( the 'he' 2$#"$a!t to that 2$#2o"e, othe#&i"e,he i" !ot a ho(e# i! ($e 'o$#"e.

ID.; ID.; ID.; CROSSING O CHEC: SHOULD ?UT HOLDER ONINQUIR7; EECT O OMISSION THEREO. — It i" the! "ette(that '#o""i!g o/ 'he'" "ho$( 2$t the ho(e# o! i!9$i#4 a!($2o! hi% (e3o3e" the ($t4 to a"'e#tai! the i!(o#"e#@" titeto the 'he' o# the !at$#e o/ hi" 2o""e""io!. aii!g i! thi"#e"2e't, the ho(e# i" (e'a#e( g$it4 o/ g#o"" !egige!'ea%o$!ti!g to ega ab"e!'e o/ goo( /aith, 'o!t#a#4 to Se'.



+0'1 o/ the Negotiabe I!"t#$%e!t" La&, a!( a" "$'h the'o!"e!"$" o/ a$tho#it4 i" to the ee't that the ho(e# o/ the'he' i" !ot a ho(e# i! ($e 'o$#"e.

ID.; ID.; ID.; ID.; ID.; DRAWER NOT OBLIGED TO ?A7 CHEC:S;CASE AT BAR.— I! the 2#e"e!t 'a"e, BCCI@" (e/e!"e i!"to22i!g 2a4%e!t i" a" goo( to SIHI a" it i" to Geo#ge :i!g.Be'a$"e, #ea4, the 'he'" &e#e i""$e( &ith the i!te!tio!that Geo#ge :i!g &o$( "$224 BCCI &ith the bae" o/ toba''o ea/. The#e bei!g /ai$#e o/ 'o!"i(e#atio!, SIHI i" !ota ho(e# i! ($e 'o$#"e. Co!"e9$e!t4, BCCI 'a!!ot beobige( to 2a4 the 'he'".

ID.; ID.; ID.; ID.; ID.; ID.; HOLDER CAN STILL COLLECT ROMIMMEDIATE INDORSER. — The /o#egoi!g (oe" !ot %ea!,

ho&e3e#, that #e"2o!(e!t 'o$( !ot #e'o3e# /#o% the'he'". The o!4 (i"a(3a!tage o/ a ho(e# &ho i" !ot aho(e# i! ($e 'o$#"e i" that the i!"t#$%e!t i" "$be't to(e/e!"e" a" i/ it &e#e !o!-!egotiabe. He!'e, #e"2o!(e!t'a! 'oe't /#o% the i%%e(iate i!(o#"e#, i! thi" 'a"e,Geo#ge :i!g.

FACTS!

?etitio!e#, Bataa! Ciga# Ciga#ette a'to#4, I!'.0BCCI1, a 'o#2o#atio! i!3o3e( i! the %a!$/a't$#i!g o/ 'iga#ette", e!gage( o!e o/ it" "$22ie#", :i!g Ti% ?$aGeo#ge 0he#ei! a/te# #e/e##e( to a" Geo#ge :i!g1, to (ei3e#, bae" o/ toba''o ea/ "ta#ti!g O'tobe# >8F.

I! 'o!"i(e#atio! the#eo/, BCCI, o! $4 >, >8Fi""$e( '#o""e( 'he'" 2o"t-(ate( "o%eti%e i! Ma#'h >88i! the tota a%o$!t o/ ?F,..

Re4i!g o! the "$22ie#@" #e2#e"e!tatio! that he&o$( 'o%2ete (ei3e#4 &ithi! th#ee %o!th" /#o%De'e%be# +, >8F, 2etitio!e# ag#ee( to 2$#'ha"e a((itio!a

,+ bae" o/ toba''o ea3e", (e"2ite the "$22ie#@" /ai$#eto (ei3e# i! a''o#(a!'e &ith thei# ea#ie# ag#ee%e!t. Agai!2etitio!e# i""$e( 2o"t(ate( crossed 'he'" i! the totaa%o$!t o/ ?>,>,., 2a4abe "o%eti%e i! Se2te%be#>88.

D$#i!g the"e ti%e", Geo#ge :i!g &a" "i%$ta!eo$"4(eai!g &ith 2#i3ate #e"2o!(e!t SIHI. O! $4 >8, >8F, he"o( at a (i"'o$!t 'he' TCBT ++>F + bea#i!g a! a%o$!to/ ?>=,., 2o"t (ate( Ma#'h >, >88, (#a&! b42etitio!e#, !a%i!g Geo#ge :i!g a" 2a4ee to SIHI. O!De'e%be# >8 a!( , >8F, he agai! "o( to #e"2o!(e!t'he'" TCBT No". F8 F8F, both i! the a%o$!to/ ?>,., 2o"t (ate( Se2te%be# >+ , >88#e"2e'ti3e4, (#a&! b4 2etitio!e# i! /a3o# o/ Geo#ge :i!g.

I! a" %$'h a" Geo#ge :i!g /aie( to (ei3e# the bae"o/ toba''o ea/ a" ag#ee( (e"2ite 2etitio!e#@" (e%a!(,BCCI i""$e( o! Ma#'h , >88, a "to2 2a4%e!t o#(e# o!a 'he'" 2a4abe to Geo#ge :i!g, i!'$(i!g 'he' TCBT++>F. S$b"e9$e!t4, "to2 2a4%e!t &a" a"o o#(e#e( o!'he'" TCBT No". F8 F8F o! Se2te%be# >= F,>88, #e"2e'ti3e4, ($e to Geo#ge :i!g@" /ai$#e to (ei3e#the toba''o ea3e".

Eo#t" o/ SIHI to 'oe't /#o% BCCI ha3i!g /aie(, it

i!"tit$te( the 2#e"e!t 'a"e, !a%i!g o!4 BCCI a" 2a#t4(e/e!(a!t.

ISSUE!

Whethe# SIHI, a "e'o!( i!(o#"e#, a ho(e# o/ '#o""e('he'", i" a ho(e# i! ($e 'o$#"e, to be abe to 'oe't /#o%the (#a&e#, BCCI.



RULING!

RTC! The t#ia 'o$#t 2#o!o$!'e( SIHI a" ha3i!g a 3ai( 'ai%

bei!g a ho(e# i! ($e 'o$#"e. It /$#the# "ai( that the !o!-i!'$"io! o/ :i!g Ti% ?$a Geo#ge a" 2a#t4 (e/e!(a!t i"i%%ate#ia i! thi" 'a"e, "i!'e he, a" 2a4ee, i" !ot a!i!(i"2e!"abe 2a#t4.

CA! AJ#%e( RTCK" (e'i"io!.

SC! Re3e#"e( CAK" (e'i"io!.

SIHI i" !ot a ho(e# i! ($e 'o$#"e a!( BCCI 'a!!otbe obige( to 2a4 the 'he'".

It i" the! "ette( that '#o""i!g o/ 'he'" "ho$( 2$tthe ho(e# o! i!9$i#4 a!( $2o! hi% (e3o3e" the ($t4 toa"'e#tai! the i!(o#"e#@" tite to the 'he' o# the !at$#e o/ hi"2o""e""io!. aii!g i! thi" #e"2e't, the ho(e# i" (e'a#e(g$it4 o/ g#o"" !egige!'e a%o$!ti!g to ega ab"e!'e o/ goo( /aith, 'o!t#a#4 to Se'. +0'1 o/ the NegotiabeI!"t#$%e!t" La&, > a!( a" "$'h the 'o!"e!"$" o/ a$tho#it4

i" to the ee't that the ho(e# o/ the 'he' i" !ot a ho(e# i!($e 'o$#"e.

I! the 2#e"e!t 'a"e, BCCI@" (e/e!"e i! "to22i!g2a4%e!t i" a" goo( to SIHI a" it i" to Geo#ge :i!g. Be'a$"e,#ea4, the 'he'" &e#e i""$e( &ith the i!te!tio! that Geo#ge:i!g &o$( "$224 BCCI &ith the bae" o/ toba''o ea/. The#e bei!g /ai$#e o/ 'o!"i(e#atio!, SIHI i" !ot a ho(e# i!($e 'o$#"e. Co!"e9$e!t4, BCCI 'a!!ot be obige( to 2a4the 'he'".

The /o#egoi!g (oe" !ot %ea!, ho&e3e#, that#e"2o!(e!t 'o$( !ot #e'o3e# /#o% the 'he'". The o!4(i"a(3a!tage o/ a ho(e# &ho i" !ot a ho(e# i! ($e 'o$#"e i"that the i!"t#$%e!t i" "$be't to (e/e!"e" a" i/ it &e#e !o!-

!egotiabe. He!'e, #e"2o!(e!t 'a! 'oe't /#o% thei%%e(iate i!(o#"e#, i! thi" 'a"e, Geo#ge :i!g.

". Ca#anan v. N$rt% Star

Ca#anan v. N$rt% Star Int&' Trav(' GR N$.1)"*+ 1-+11

?etitio!e#) E!g#. o"e Ca4a!a!, o&!e#ge!.%a!age# o/ EACI!tK Mgt. Co!t#a'to# Se#3i'e" 0#e'#$it%e!t age!'41

Re"2o!(e!t) No#th Sta# I!tK T#a3e I!'. 0e!gage( i! t#a3e

age!'4 b$"i!e""1Ca"e) A22ea o! CA (e'i"io! 5!(i!g Ca4a!a! 'i3i4 iabe/o# the 3a$e o/ the 53e 'he'" &hi'h a#e the "$be't o/ C#i%i!a Ca"e No". >+=8-+.

FACTS)

>. O! Ma#'h >, >88=, 6i#gi!ia Baagta", the Ge!e#aMa!age# o/ No#th Sta#, i! a''o%%o(atio! a!( $2o!the i!"t#$'tio! o/ Ca4a!a!, "e!t the a%o$!t o/ US, to 6ie& Sea 6e!t$#e" Lt(., i! Nige#ia /#o%he# 2e#"o!a a''o$!t i! Citiba! Maati.

. O! Ma#'h 8, >88=, 6i#gi!ia agai! "e!t US=, to6ie& Sea 6e!t$#e" b4 teeg#a2hi' t#a!"/e#, &ithUS>+, 'o%i!g /#o% 2etitio!e#.

. No#th Sta# e<te!(e( '#e(it to 2etitio!e# /o# theai#2a!e ti'et" o/ hi" 'ie!t", &ith the tota a%o$!to/ "$'h i!(ebte(!e"" $!(e# the '#e(it e<te!"io!"e3e!t$a4 #ea'hi!g ?+>,+.=.

To 'o3e# 2a4%e!t o/ the /o#egoi!g obigatio!", 2etitio!e#i""$e( the /oo&i!g 53e 'he'" to No#th Sta#)



>. Che' No) =F -- D#a&! Agai!"t ) Re2$bi'?a!te#" Ba! A%o$!t) 8+: Date(?o"t(ate()Ma4 >+, >88= --- ?a4abe to) No#th Sta#

. Che' No) =F -- D#a&! Agai!"t) Re2$bi'?a!te#" Ba! A%o$!t) F: Date(?o"t(ate()

Ma4 >+, >88= --- ?a4abe to) No#th Sta#. Che' No) =F= -- D#a&! Agai!"t) Re2$bi'?a!te#" Ba! --- A%o$!t) ,.

Date(?o"t(ate() Ma4 >+, >88= ?a4abe toNo#th Sta#

=. Che' No) FF D#a&! Agai!"t) ?CIB—A%o$!t) >.+M Date(?o"t(ate() A2#i >=, >88=?a4abe to No#th Sta#

+. Che' No) FF= D#a&! Agai!"t) ?CIB ---A%o$!t) +: Date(?o"t(ate() A2#i >=, >88=--- ?a4abe to) No#th Sta#

- U2o! 2#e"e!t%e!t) Che'" a%o$!ti!g to >.+M a!(+: bo$!'e( /o# i!"$J'ie!'4 o/ /$!(". The othe# 'he'" &e#e (i"ho!o#e( ($e to a "to2 o#(e# 2a4%e!t/#o% Ca4a!a!.

- No#th Sta#, th#o$gh it" 'o$!"e, &#ote to Ca4a!a!i!/o#%i!g hi% o/ the (i"ho!o#. No#th Sta# (e%a!(e(2a4%e!t b$t Ca4a!a! /aie( to 'o%24 &ith it"obigatio!. He!'e the 5i!g o/ I!/o#%atio! /o#C#i%i!a Ca"e /o# 3ioatio! o/ B? i! MeTC o/ Maati.

- ?etitio!e# 2ea(e( NOT GUILT7. B$t the MeTC#e!(e#e( $(g%e!t 5!(i!g Ca4a!a! g$it4 be4o!(

#ea"o!abe (o$bt. 0> 4ea# o/ i%2#i"o!%e!t 2$",+,. /o# the a%o$!t" o/ 'he'", =,F./o# i!te#e"t (e($'ti!g , &hi'h &a" a#ea(42ai(1.

- O! a22ea, the RTC a'9$itte( 2etitio!e# o/ the'#i%i!a 'ha#ge". RTC a"o #$e( that !o 'i3i iabiit4a" the#e &a" !o '#i%e 'o%%itte(.

- No#th Sta# ee3ate( the 'a"e to the CA. O! Ma4 >,, the CA 0aJ#%i!g MeTC (e'i"io!1 #e3e#"e( the(e'i"io! o/ the RTC i!"o/a# a" the 'i3i a"2e't i"'o!'e#!e( a!( he( 2etitio!e# 'i3i4 iabe /o# the

3a$e o/ the "$be't 'he'" he i""$e( "i!'e he !e3e#(e!ie( ha3i!g i""$e( the 53e 2o"t(ate( 'he'"&hi'h &e#e (i"ho!o#e(.

- He!'e, thi" a22ea.o ?etitio!e#K" 'o!te!tio!) Not 'i3i4 iabe "i!'e

No#th Sta# (i( !ot gi3e a!4 3a$abe'o!"i(e#atio!o Re"2o!(e!t) Che'" &e#e /o# 3a$e. ?a4%e!t

o/ : i" 2#oo/.

I//0() WON CA e##e( i! %ai!g hi% 'i3i4 iabe a!( WONthe i!"t#$%e!t &a" /o# 3a$e

H('d) CA (e'i"io! aJ#%e(.

We ha3e he( that $2o! i""$a!'e o/ a 'he', i! the ab"e!'eo/ e3i(e!'e to the 'o!t#a#4, it is presumed that the samewas issued for valuable consideration which may consist either in some right interest prot or benet accruing tothe party who ma!es the contract or some forbearancedetriment loss or some responsibility to act or labor or service given su"ered or underta!en by the other side.U!(e# the Negotiabe I!"t#$%e!t" La&, it i" 2#e"$%e( thate3e#4 2a#t4 to a! i!"t#$%e!t a'9$i#e" the "a%e /o# a'o!"i(e#atio! o# /o# 3a$e. A" 2etitio!e# aege( that the#e&a" !o 'o!"i(e#atio! /o# the i""$a!'e o/ the "$be't 'he'",it (e3o3e( $2o! hi% to 2#e"e!t 'o!3i!'i!g e3i(e!'e too3e#th#o& the 2#e"$%2tio! a!( 2#o3e that the 'he'" &e#ei! /a't i""$e( &itho$t 3a$abe 'o!"i(e#atio!. Sa(4,ho&e3e#, 2etitio!e# ha" !ot 2#e"e!te( a!4 '#e(ibe e3i(e!'eto #eb$t the 2#e"$%2tio!, a" &e a" No#th Sta#" a""e#tio!,that the 'he'" &e#e i""$e( a" 2a4%e!t /o# the USF+,2etitio!e# o&e(.

?etitio!e# 'ai%" that No#th Sta# (i( !ot gi3e a!43a$abe 'o!"i(e#atio! /o# the 'he'" "i!'e the USF+,&a" tae! /#o% the 2e#"o!a (oa# a''o$!t o/ 6i#gi!ia a!(!ot the 'o#2o#ate /$!(" o/ No#th Sta#. The 'o!te!tio!,ho&e3e#, (e"e#3e" "'a!t 'o!"i(e#atio!. The "$be't 'he'",bea#i!g 2etitio!e#" "ig!at$#e, "2ea /o# the%"e3e". The/a't that 2etitio!e# hi%"e/ "2e'i5'a4 !a%e( No#th Sta# a"the 2a4ee o/ the 'he'" i" a! a(%i""io! o/ hi" iabiit4 to



No#th Sta# a!( !ot to 6i#gi!ia Baagta", &ho a" %a!age#%e#e4 /a'iitate( the t#a!"/e# o/ /$!(". I!(ee(, it i" high4i!'o!'ei3abe that a! e<2e#ie!'e( b$"i!e""%a! ie2etitio!e# &o$( i""$e 3a#io$" 'he'" i! "ieabe a%o$!t" toa 2a4ee i/ the"e a#e &itho$t 'o!"i(e#atio!.

. Stat( Inv(/t2(nt H$0/( v. IAC

?etitio!e# State I!3e"t%e!t Ho$"e "ee" a #e3ie& o/ the(e'i"io! o/ #e"2o!(e!t I!te#%e(iate A22eate Co$#t0!o& Co$#t o/ A22ea"1 i! AC-G.R. C6 No. =+#e3e#"i!g the (e'i"io! o/ the Regio!a T#ia Co$#t o/Ma!ia, B#a!'h PPP6II (ate( A2#i , >8F= a!((i"%i""i!g the 'o%2ai!t /o# 'oe'tio! 5e( b4 2etitio!e#agai!"t 2#i3ate #e"2o!(e!t" S2o$"e" A!ita ?e!a Ch$aa!( Ha##i" Ch$a.

It a22ea#" that "ho#t4 be/o#e Se2te%be# +, >8F, Ne&Siat$!a Woo( I!($"t#ie", I!'. #e9$e"te( /o# a oa! /#o%2#i3ate #e"2o!(e!t Ha##i" Ch$a. The atte# ag#ee( to g#a!tthe "a%e "$be't to the 'o!(itio! that the /o#%e# "ho$(&ait $!ti De'e%be# >8F &he! he &o$( ha3e the %o!e4.I! 3ie& o/ thi" ag#ee%e!t, 2#i3ate #e"2o!(e!t-&i/e, A!ita?e!a Ch$a i""$e( th#ee 01 '#o""e( 'he'" 2a4abe to Ne&Siat$!a Woo( I!($"t#ie", I!'. a 2o"t(ate( De'e%be# ,>8F a" /oo&")

DRAWEE BAN: CHEC: NO. DATE

>. Chi!a Ba!i!g Co#2o#atio! +F8+ De'. , >8F

. I!te#!atio!a Co#2o#ate Ba! ==++=8 De'. , >8F

. Met#o2oita! Ba! T#$"t Co. +> De'. , >8F

The tota 3a$e o/ the th#ee 01 2o"t(ate( 'he'" a%o$!te(to ? 88,=+..

S$b"e9$e!t4, Ne& Siat$!a Woo( I!($"t#ie", I!'. e!te#e(i!to a! ag#ee%e!t &ith he#ei! 2etitio!e# State I!3e"t%e!tHo$"e, I!'. &he#eb4 /o# a!( i! 'o!"i(e#atio! o/ the "$% o/?,=,=.8> $!(e# a (ee( o/ "ae, the /o#%e# a""ig!e( a!((i"'o$!te( &ith 2etitio!e# ee3e! 0>>1 2o"t(ate( 'he'"

i!'$(i!g the a/o#e%e!tio!e( th#ee 01 2o"t(ate( 'he'"i""$e( b4 he#ei! 2#i3ate #e"2o!(e!t-&i/e A!ita ?ea Ch$a toNe& Siat$!a Woo( I!($"t#ie", I!'.

Whe! the th#ee 'he'" i""$e( b4 2#i3ate #e"2o!(e!t A!ita?e!a Ch$a &e#e aege(4 (e2o"ite( b4 2etitio!e#, the"e'he'" &e#e (i"ho!o#e( b4 #ea"o! o/ *i!"$J'ie!t /$!("*,*"to2 2a4%e!t* a!( *a''o$!t 'o"e(*, #e"2e'ti3e4.?etitio!e# 'ai%" that (e"2ite (e%a!(" o! 2#i3ate#e"2o!(e!t A!ita ?ea to %ae goo( "ai( 'he'", the atte#/aie( to 2a4 the "a%e !e'e""itati!g the /o#%e# to 5e a!a'tio! /o# 'oe'tio! agai!"t the atte# a!( he# h$"ba!(Ha##i" Ch$a be/o#e the Regio!a T#ia Co$#t o/ Ma!ia, B#a!'h

PPP6II (o'ete( a" Ci3i Ca"e No. F->+=.

?#i3ate #e"2o!(e!t"-(e/e!(a!t" 5e( a thi#( 2a#t4 'o%2ai!tagai!"t Ne& Siat$!a Woo( I!($"t#ie", I!'. /o##ei%b$#"e%e!t a!( i!(e%!i5'atio! i! the e3e!t that the4be he( iabe to 2etitio!e#-2ai!ti. o# /ai$#e o/ thi#( 2a#t4(e/e!(a!t to a!"&e# the thi#( 2a#t4 'o%2ai!t (e"2ite ($e"e#3i'e o/ "$%%o!", the atte# &a" (e'a#e( i! (e/a$t.

O! A2#i , >8F=, the o&e# 'o$#t 1 #e!(e#e( $(g%e!tagai!"t he#ei! 2#i3ate #e"2o!(e!t" "2o$"e", the (i"2o"iti3e2o#tio! o/ &hi'h #ea(")

WHEREORE, $(g%e!t i" he#eb4 #e!(e#e( i! /a3o# o/ the2ai!ti o# agai!"t the (e/e!(a!t" o#(e#i!g the (e/e!(a!t"to 2a4 oi!t4 a!( "e3e#a4 to the 2ai!ti the /oo&i!ga%o$!t")

>. ? 8,=+. &ith i!te#e"t at the #ate o/ > 2e# a!!$%/#o% eb#$a#4 =,>8F> $!ti /$4 2ai(;

. ? 8,8=+. a" a!( /o# atto#!e4@" /ee"; a!(

. the 'o"t" o/ "$it.



O! the thi#( 2a#t4 'o%2ai!t, thi#( 2a#t4 (e/e!(a!t Ne&Siat$!a Woo( I!($"t#ie", I!'. i" o#(e#e( to 2a4 thi#( 2a#t42ai!ti" A!ita ?e!a Ch$a a!( Ha##i" Ch$a a a%o$!t" "ai((e/e!(a!t"@ thi#(- 2a#t4 2ai!ti" %a4 2a4 to the 2ai!ti o!a''o$!t o/ thi" 'a"e. "

O! a22ea 5e( b4 2#i3ate #e"2o!(e!t" i! AC-G.R. C6 No.=+, the I!te#%e(iate A22eate Co$#t 0!o& Co$#t o/A22ea"1 #e3e#"e( the o&e# 'o$#t@" $(g%e!t i! the !o&a""aie( (e'i"io!, the (i"2o"iti3e 2o#tio! o/ &hi'h #ea(")

WHEREORE, 5!(i!g thi" a22ea %e#ito#io$", We Re3e#"ea!( Set A"i(e the a22eae( $(g%e!t, (ate( A2#i , >8F=a!( a !e& $(g%e!t i" he#eb4 #e!(e#e( (i"%i""i!g the'o%2ai!t, &ith 'o"t" agai!"t 2ai!ti-a22eee.

He!'e, thi" 2etitio!.

The 2i3ota i""$e i! thi" 'a"e i" &hethe# o# !ot 2etitio!e# i" a

ho(e# i! ($e 'o$#"e a" to e!tite it to 2#o'ee( agai!"t2#i3ate #e"2o!(e!t" /o# the a%o$!t "tate( i! the (i"ho!o#e('he'".

Se'tio! +0'1 o/ the Negotiabe I!"t#$%e!t" La& (e5!e" aho(e# i! ($e 'o$#"e a" o!e &ho tae" the i!"t#$%e!t *i!goo( /aith a!( /o# 3a$e*. O! the othe# ha!(, Se'tio! +0(12#o3i(e" that i! o#(e# that o!e %a4 be a ho(e# i! ($e'o$#"e, it i" !e'e""a#4 that *at the ti%e the i!"t#$%e!t &a"!egotiate( to hi% he ha( !o !oti'e o/ a!4 < < < (e/e't i! thetite o/ the 2e#"o! !egotiati!g it.* Ho&e3e#, $!(e# Se'tio!+8 e3e#4 ho(e# i" (ee%e( prima facie to be a ho(e# i! ($e'o$#"e.

A(%itte(4, the Negotiabe I!"t#$%e!t" La& #eg$ati!g thei""$a!'e o/ !egotiabe 'he'" a" &e a" the ight" a!(iabiitie" a#i"i!g the#e/#o%, (oe" !ot %e!tio! *'#o""e('he'"*. B$t thi" Co$#t ha" tae! 'og!ia!'e o/ the 2#a'ti'ethat a 'he' &ith t&o 2a#ae i!e" i! the $22e# e/t ha!('o#!e# %ea!" that it 'o$( o!4 be (e2o"ite( a!( %a4 !otbe 'o!3e#te( i!to 'a"h. Co!"e9$e!t4, "$'h 'i#'$%"ta!'e"ho$( 2$t the 2a4ee o! i!9$i#4 a!( $2o! hi% (e3o3e" the($t4 to a"'e#tai! the ho(e#@" tite to the 'he' o# the !at$#eo/ hi" 2o""e""io!. aii!g i! thi" #e"2e't, the 2a4ee i"

(e'a#e( g$it4 o/ g#o"" !egige!'e a%o$!ti!g to egaab"e!'e o/ goo( /aith a!( a" "$'h the 'o!"e!"$" o/a$tho#it4 i" to the ee't that the ho(e# o/ the 'he' i" !ot aho(e# i! goo( /aith. +

?etitio!e# "$b%it" that at the ti%e o/ the !egotiatio! a!(

e!(o#"e%e!t o/ the 'he'" i! 9$e"tio! b4 Ne& Siat$!aWoo( I!($"t#ie", it ha( !o !o&e(ge o/ the t#a!"a'tio!a!(o# a##a!ge%e!t %a(e bet&ee! the atte# a!( 2#i3ate#e"2o!(e!t".

We ag#ee &ith #e"2o!(e!t a22eate 'o$#t.

Re4i!g o! the #$i!g i! #campo v$ %atchalian 0supra1, theI!te#%e(iate A22eate Co$#t 0!o& Co$#t o/ A22ea"1,'o##e't4 e$'i(ate( that the ee't" o/ '#o""i!g a 'he' a#e)the 'he' %a4 !ot be e!'a"he( b$t o!4 (e2o"ite( i! theba!; the 'he' %a4 be !egotiate( o!4 o!'e to o!e &hoha" a! a''o$!t &ith a ba!; a!( the a't o/ '#o""i!g the'he' "e#3e" a" a &a#!i!g to the ho(e# that the 'he' ha"bee! i""$e( /o# a (e5!ite 2$#2o"e "o that he %$"t i!9$i#e i/he ha" #e'ei3e( the 'he' 2$#"$a!t to that 2$#2o"e,othe#&i"e he i" !ot a ho(e# i! ($e 'o$#"e. $#the#, thea22eate 'o$#t "ai()

It #e"$t" the#e/o#e that &he! a22eee #e(i"'o$!te( the'he' !o&i!g that it &a" a '#o""e( 'he' he &a" !o&i!g43ioati!g the a3o&e( i!te!tio! o/ '#o""i!g the 'he'.$#the#%o#e, hi" /ai$#e to i!9$i#e /#o% the ho(e#, 2a#t4(e/e!(a!t Ne& Siat$!a Woo( I!($"t#ie", I!'., the 2$#2o"e/o# &hi'h the th#ee 'he'" &e#e '#o"" (e"2ite the &a#!i!g o/

the '#o""i!g, 2#e3e!t" hi% /#o% bei!g 'o!"i(e#e( i! goo(/aith a!( th$" he i" !ot a ho(e# i! ($e 'o$#"e. Bei!g !ot aho(e# i! ($e 'o$#"e, 2ai!ti i" "$be't to 2e#"o!a(e/e!"e", "$'h a" a' o/ 'o!"i(e#atio! bet&ee! a22ea!t"a!( Ne& Siat$!a Woo( I!($"t#ie". Note that $!(e# the/a't" the 'he'" &e#e 2o"t(ate( a!( i""$e( o!4 a" a oa! toNe& Siat$!a Woo( I!($"t#ie", I!'. i/ a!( &he! (e2o"it"&e#e %a(e to ba' $2 the 'he'". S$'h (e2o"it" &e#e !ot%a(e, he!'e !o oa! &a" %a(e, he!'e the th#ee 'he'" a#e&itho$t 'o!"i(e#atio! 0Se'. F, Negotiabe I!"t#$%e!t"La&1.



Lie&i"e Ne& Siat$!a Woo( I!($"t#ie" !egotiate( the th#ee'he'" i! b#ea'h o/ /aith i! 3ioatio! o/ A#ti'e 0"i'1 ++,Negotiabe I!"t#$%e!t" La&, &hi'h i" a 2e#"o!a (e/e!"ea3aiabe to the (#a&e# o/ the 'he'. 3

I! a((itio!, "$'h i!"t#$%e!t" a#e %e!tio!e( i! Se'tio! +=>

o/ the Negotiabe I!"t#$%e!t" La& a" /oo&")

Se'. +=>. The %ae# o# a!4 ega ho(e# o/ a 'he' "ha bee!tite( to i!(i'ate the#ei! that it be 2ai( to a 'e#tai! ba!e#o# i!"tit$tio!, &hi'h he "ha (o b4 &#iti!g a'#o"" the /a'ethe !a%e o/ "ai( ba!e# o# i!"tit$tio!, o# o!4 the &o#("*a!( 'o%2a!4.*

The 2a4%e!t %a(e to a 2e#"o! othe# tha! the ba!e# o#i!"tit$tio! "ha !ot e<e%2t the 2e#"o! o! &ho% it i" (#a&!,i/ the 2a4%e!t &a" !ot 'o##e't4 %a(e.

U!(e# $"$a 2#a'ti'e, '#o""i!g a 'he' i" (o!e b4 2a'i!g

t&o 2a#ae i!e" (iago!a4 o! the e/t to2 2o#tio! o/ the'he'. The '#o""i!g %a4 be "2e'ia &he#ei! bet&ee! thet&o 2a#ae i!e" i" &#itte! the !a%e o/ a ba! o# a b$"i!e""i!"tit$tio!, i! &hi'h 'a"e the (#a&ee "ho$( 2a4 o!4 &iththe i!te#3e!tio! o/ that ba! o# 'o%2a!4, o# '#o""i!g %a4be ge!e#a &he#ei! bet&ee! t&o 2a#ae (iago!a i!e" a#e&#itte! the &o#(" *a!( Co.* o# !o!e at a a" i! the 'a"e atba#, i! &hi'h 'a"e the (#a&ee "ho$( !ot e!'a"h the "a%eb$t %e#e4 a''e2t the "a%e /o# (e2o"it.

The ee't the#e/o#e o/ '#o""i!g a 'he' #eate" to the %o(eo/ it" 2#e"e!t%e!t /o# 2a4%e!t. U!(e# Se'tio! o/ theNegotiabe I!"t#$%e!t" La&, 2#e"e!t%e!t /o# 2a4%e!t to be"$J'ie!t %$"t be %a(e 0a1 b4 the ho(e#, o# b4 "o%e2e#"o! a$tho#ie( to #e'ei3e 2a4%e!t o! hi" beha/ ... A" to&ho the ho(e# o# a$tho#ie( 2e#"o! &i be (e2e!(" o! thei!"t#$'tio!" "tate( o! the /a'e o/ the 'he'.

The th#ee "$be't 'he'" i! the 'a"e at ba# ha( bee!'#o""e( ge!e#a4 a!( i""$e( 2a4abe to Ne& Siat$!a Woo(I!($"t#ie", I!'. &hi'h 'o$( o!4 %ea! that the (#a&e# ha(i!te!(e( the "a%e /o# (e2o"it o!4 b4 the #ight/$ 2e#"o!,i.e., the 2a4ee !a%e( the#ei!. A22a#e!t4, it &a" !ot the2a4ee &ho 2#e"e!te( the "a%e /o# 2a4%e!t a!( the#e/o#e,

the#e &a" !o 2#o2e# 2#e"e!t%e!t, a!( the iabiit4 (i( !otatta'h to the (#a&e#.

Th$", i! the ab"e!'e o/ ($e 2#e"e!t%e!t, the (#a&e# (i( !otbe'o%e iabe. ) Co!"e9$e!t4, !o #ight o/ #e'o$#"e i"a3aiabe to 2etitio!e# agai!"t the (#a&e# o/ the "$be't

'he'", 2#i3ate #e"2o!(e!t &i/e, 'o!"i(e#i!g that 2etitio!e#i" !ot the 2#o2e# 2a#t4 a$tho#ie( to %ae 2#e"e!t%e!t o/the 'he'" i! 9$e"tio!.

7et it (oe" !ot /oo& a" a ega 2#o2o"itio! that "i%24be'a$"e 2etitio!e# &a" !ot a ho(e# i! ($e 'o$#"e a" /o$!(b4 the a22eate 'o$#t /o# ha3i!g tae! the i!"t#$%e!t" i!9$e"tio! &ith !oti'e that the "a%e i" /o# (e2o"it o!4 to thea''o$!t o/ 2a4ee !a%e( i! the "$be't 'he'", 2etitio!e#'o$( !ot #e'o3e# o! the 'he'". The NegotiabeI!"t#$%e!t" La& (oe" !ot 2#o3i(e that a ho(e# &ho i" !ot aho(e# i! ($e 'o$#"e %a4 !ot i! a!4 'a"e #e'o3e# o! the

i!"t#$%e!t /o# i! the 'a"e at ba#, 2etitio!e# %a4 #e'o3e#/#o% the Ne& Siat$!a Woo( I!($"t#ie", I!'. i/ the atte# ha"!o 3ai( e<'$"e /o# #e/$"i!g 2a4%e!t. The o!4(i"a(3a!tage o/ a ho(e# &ho i" !ot i! ($e 'o$#"e i" that the!egotiabe i!"t#$%e!t i" "$be't to (e/e!"e" a" i/ it &e#e!o!-!egotiabe. 4

That the "$be't 'he'" ha( bee! i""$e( "$be't to the'o!(itio! that 2#i3ate #e"2o!(e!t" o! ($e (ate &o$( %aethe ba' $2 (e2o"it /o# "ai( 'he'" b$t &hi'h 'o!(itio!a22a#e!t4 &a" !ot %a(e, th$" #e"$ti!g i! the !o!-'o!"$%%atio! o/ the oa! i!te!(e( to be g#a!te( b4 2#i3ate#e"2o!(e!t" to Ne& Siat$!a Woo( I!($"t#ie", I!'.,'o!"tit$te" a goo( (e/e!"e agai!"t 2etitio!e# &ho i" !ot aho(e# i! ($e 'o$#"e.

WHEREORE, the (e'i"io! a22eae( /#o% i" he#eb4AIRMED &ith 'o"t" agai!"t 2etitio!e#.SO ORDERED.

. Pin(da v. d('a Ra2a 5

FACTS)

?i!e(a &a" 'a$ght i! a 'a"e agai!"t the NARIC



/o# hi" aege( %i"a22#o2#iatio! o/ %a!4 'a3a!" o/2aa4. He hi#e( Att4. Dea Ra%a to (ea4 the 5i!g o/the 'o%2ai!t agai!"t hi%, o! aege( #e2#e"e!tatio! o/ thea&4e# that he i" a /#ie!( o/ the NARIC a(%i!i"t#ato#.

?i!e(a the! i""$e( a 2#o%i""o#4 !ote i! /a3o# o/ (ea Ra%a

to 2a4 /o# the a(3a!'e" that the a&4e# %a(e to thea(%i!i"t#ato# to (ea4 the 5i!g o/ the 'o%2ai!t. DeaRa%a o! the othe# ha!( 'o!te!(e( that the 2#o%i""o#4!ote &a" /o# the oa! a(3a!'e( to ?i!e(a b4 hi%. DeaRa%a 5e( a! a'tio! agai!"t ?i!e(a /o# the 'oe'tio! o/ thea%o$!t o/ the !ote.

HELD)

The 2#e"$%2tio! that a !egotiabe i!"t#$%e!t &a"i""$e( /o# 3a$abe 'o!"i(e#atio! i" a #eb$ttabe2#e"$%2tio!. It 'a! be #eb$tte( b4 2#oo/ to the 'o!t#a#4.I! the 'a"e at ba#, the 'ai%" o/ (ea Ra%a that the

2#o%i""o#4 !ote &a" /o# a oa! a(3a!'e( to ?i!e(a i"$!beie3abe. The g#a!t o/ a oa! b4 a a&4e# to a%o!e4e( 'ie!t a!( &ho% he ha" !o&! /o# o!4 %o!th"'a! !ot be #eie( o!. ?i!e(a ha( a't$a4 $"t 2$#'ha"e(!$%e#o$" 2#o2e#tie". It i" high4 iogi'a that he &o$(oa! /#o% (ea Ra%a ?8+ /o# + (a4" a2a#t. $#the#%o#e,the !ote &a" 3oi( ab i!itio be'a$"e the 'o!"i(e#atio!gi3e! &a" to i!$e!'e the a(%i!i"t#ato# to (ea4'ha#ge" agai!"t ?i!e(a. The 'o!"i(e#atio! &a" 3oi( /o#bei!g agai!"t a& a!( 2$bi' 2oi'4.

+. Cri/$'$g$6$/( v. CA

G.R. No. F+88 Se2te%be# >+, >8F8

ERNESTINA CRISOLOGO-OSE, 2etitio!e#,

3".

COURT O A??EALS a!( RICARDO S. SANTOS, R. i! hi" o&!beha/ a!( a" 6i'e-?#e"i(e!t /o# Sae" o/ Mo3e# E!te#2#i"e",I!'., #e"2o!(e!t".

Me9$ia(e" ?. (e Leo! /o# 2etitio!e#.

Rogeio A. Ae" /o# 2#i3ate #e"2o!(e!t.

FACTS!

I! >8F, 2ai!ti Ri'a#(o S. Sa!to", #. &a" the 3i'e-2#e"i(e!to/ Mo3e# E!te#2#i"e", I!'. i!-'ha#ge o/ %a#eti!g a!( "ae";a!( the 2#e"i(e!t o/ the "ai( 'o#2o#atio! &a" Att4. O"'a# .Be!a#e". O! A2#i , >8F, Att4. Be!a#e", i!a''o%%o(atio! o/ hi" 'ie!t", the "2o$"e" ai%e a!( Ca#itaO!g, i""$e( Che' No. 8++ (#a&! agai!"t T#a(e#" Ro4aBa!, (ate( $!e >=, >8F, i! the a%o$!t o/ ?=+,.0E<h- @I@1 2a4abe to (e/e!(a!t E#!e"ti!a C#i"oogo-o"e.Si!'e the 'he' &a" $!(e# the a''o$!t o/ Mo3e#E!te#2#i"e", I!'., the "a%e &a" to be "ig!e( b4 it"2#e"i(e!t, Att4. O"'a# . Be!a#e", a!( the t#ea"$#e# o/ the

"ai( 'o#2o#atio!. Ho&e3e#, "i!'e at that ti%e, the t#ea"$#e#o/ Mo3e# E!te#2#i"e" &a" !ot a3aiabe, Att4. Be!a#e"2#e3aie( $2o! the 2ai!ti, Ri'a#(o S. Sa!to", #., to "ig! thea/o#e"ai( 'hE' a" a! ate#!ate "to#4. ?ai!ti Ri'a#(o S.Sa!to", #. (i( "ig! the 'he'.

It a22ea#" that the 'he' 0E<h. @>@1 &a" i""$e( to (e/e!(a!tE#!e"ti!a C#i"oogo-o"e i! 'o!"i(e#atio! o/ the &ai3e# o#9$it'ai% b4 "ai( (e/e!(a!t o3e# a 'e#tai! 2#o2e#t4 &hi'hthe Go3e#!%e!t Se#3i'e I!"$#a!'e S4"te% 0GSIS1 ag#ee( to"e to the 'ie!t" o/ Att4. O"'a# Be!a#e", the "2o$"e" ai%ea!( Ca#ita O!g, &ith the $!(e#"ta!(i!g that $2o! a22#o3ab4 the GSIS o/ the 'o%2#o%i"e ag#ee%e!t &ith the "2o$"e"O!g, the 'he' &i be e!'a"he( a''o#(i!g4. Ho&e3e#, "i!'ethe 'o%2#o%i"e ag#ee%e!t &a" !ot a22#o3e( &ithi! thee<2e'te( 2e#io( o/ ti%e, the a/o#e"ai( 'he' /o# ?=+,.0E<h. @>@1 &a" #e2a'e( b4 Att4. Be!a#e" &ith a!othe# T#a(e#"Ro4a Ba! 'hee bea#i!g No. 888 (ate( A$g$"t >,>8F, i! the "a%e a%o$!t o/ ?=+,. 0E<h". @A@ a!( @@1,a"o 2a4abe to the (e/e!(a!t o"e. Thi" #e2a'e%e!t 'he'&a" a"o "ig!e( b4 Att4. O"'a# . Be!a#e" a!( b4 the2ai!ti Ri'a#(o S. Sa!to", #. Whe! (e/e!(a!t (e2o"ite( thi"#e2a'e%e!t 'he' 0E<h". @A@ a!( @@1 &ith he# a''o$!t at



a%i4 Sa3i!g" Ba!, Ma4o! B#a!'h, it &a" (i"ho!o#e( /o#i!"$J'ie!'4 o/ /$!(". A "$b"e9$e!t #e(e2o"iti!g o/ the "ai('he' &a" ie&i"e (i"ho!o#e( b4 the ba! /o# the "a%e#ea"o!. He!'e, (e/e!(a!t th#o$gh 'o$!"e &a" 'o!"t#ai!e(to 5e a '#i%i!a 'o%2ai!t /o# 3ioatio! o/ Bata" ?a%ba!"a

Bg. &ith the Q$eo! Cit4 i"'a@" OJ'e agai!"t Att4.O"'a# . Be!a#e" a!( 2ai!ti Ri'a#(o S. Sa!to", #. Thei!3e"tigati!g A""i"ta!t Cit4 i"'a, A/o!"o La%a",a''o#(i!g4 5e( a! a%e!(e( i!/o#%atio! &ith the 'o$#t'ha#gi!g both O"'a# Be!a#e" a!( Ri'a#(o S. Sa!to", #., /o#3ioatio! o/ Bata" ?a%ba!"a Bg. (o'ete( a" C#i%i!aCa"e No. Q->=F o/ the! Co$#t o/ i#"t I!"ta!'e o/ Ria,Q$eo! Cit4.

Mea!&hie, ($#i!g the 2#ei%i!a#4 i!3e"tigatio! o/ the'#i%i!a 'ha#ge agai!"t Be!a#e" a!( the 2ai!ti he#ei!,be/o#e A""i"ta!t Cit4 i"'a A/o!"o T. La%a", 2ai!ti Ri'a#(o S. Sa!to", #. te!(e#e( 'a"hie#@" 'he' No. CC

>>+ /o# ?=+,. (ate( A2#i >, >8F> to the(e/e!(a!t E#!e"ti!a C#i"oogo-o"e, the 'o%2ai!a!t i! that'#i%i!a 'a"e. The (e/e!(a!t #e/$"e( to #e'ei3e the'a"hie#@" 'he' i! 2a4%e!t o/ the (i"ho!o#e( 'he' i! thea%o$!t o/ ?=+,.. He!'e, 2ai!ti e!'a"he( thea/o#e"ai( 'a"hie#@" 'he' a!( "$b"e9$e!t4 (e2o"ite( "ai(a%o$!t o/ ?=+,. &ith the Ce# o/ Co$#t o! A$g$"t >=,>8F> 0E<h". @D@ a!( @E@1. I!'i(e!ta4, the 'a"hie#@" 'he'a(3e#te( to abo3e &a" 2$#'ha"e( b4 Att4. O"'a# . Be!a#e"a!( gi3e! to the 2ai!ti he#ei! to be a22ie( i! 2a4%e!t o/ the (i"ho!o#e( 'he'.

A/te# t#ia, the 'o$#t a 9$o, ho(i!g that it &a" *!ot2e#"$a(e( to beie3e that 'o!"ig!atio! #e/e##e( to i! A#ti'e>+ o/ the Ci3i Co(e i" a22i'abe to thi" 'a"e,* #e!(e#e( $(g%e!t (i"%i""i!g 2ai!ti " 'o%2ai!t a!( (e/e!(a!t@"'o$!te#'ai%. =

A" ea#ie# "tate(, #e"2o!(e!t 'o$#t #e3e#"e( a!( "et a"i(e"ai( $(g%e!t o/ (i"%i""a a!( #e3i3e( the 'o%2ai!t /o#'o!"ig!atio!, (i#e'ti!g the t#ia 'o$#t to gi3e ($e 'o$#"ethe#eto.

ISSUE!

Whethe# o# !ot it %a4 be he( iabe o! the a''o%%o(atio!i!"t#$%e!t, that i", the 'he' i""$e( i! /a3o# o/ he#ei!2etitio!e#.

H('d!

No. The a/o#e9$ote( 2#o3i"io! o/ the Negotiabe I!"t#$%e!t"La& &hi'h ho(" a! a''o%%o(atio! 2a#t4 iabe o! thei!"t#$%e!t to a ho(e# /o# 3a$e, atho$gh "$'h ho(e# at theti%e o/ tai!g the i!"t#$%e!t !e& hi% to be o!4 a!a''o%%o(atio! 2a#t4, (oe" !ot i!'$(e !o# a224 to'o#2o#atio!" &hi'h a#e a''o%%o(atio! 2a#tie". Thi" i"be'a$"e the i""$e o# i!(o#"e%e!t o/ !egotiabe 2a2e# b4 a'o#2o#atio! &itho$t 'o!"i(e#atio! a!( /o# thea''o%%o(atio! o/ a!othe# i" $t#a 3i#e". He!'e, o!e &hoha" tae! the i!"t#$%e!t &ith !o&e(ge o/ thea''o%%o(atio! !at$#e the#eo/ 'a!!ot #e'o3e# agai!"t a

'o#2o#atio! &he#e it i" o!4 a! a''o%%o(atio! 2a#t4. I/ the/o#% o/ the i!"t#$%e!t, o# the !at$#e o/ the t#a!"a'tio!, i""$'h a" to 'ha#ge the i!(o#"ee &ith !o&e(ge that thei""$e o# i!(o#"e%e!t o/ the i!"t#$%e!t b4 the 'o#2o#atio! i"/o# the a''o%%o(atio! o/ a!othe#, he 'a!!ot #e'o3e#agai!"t the 'o#2o#atio! the#eo!.

B4 &a4 o/ e<'e2tio!, a! oJ'e# o# age!t o/ a 'o#2o#atio!"ha ha3e the 2o&e# to e<e'$te o# i!(o#"e a !egotiabe2a2e# i! the !a%e o/ the 'o#2o#atio! /o# the a''o%%o(atio!o/ a thi#( 2e#"o! o!4 i/ "2e'i5'a4 a$tho#ie( to (o "o.Co#oa#i4, 'o#2o#ate oJ'e#", "$'h a" the 2#e"i(e!t a!(

3i'e-2#e"i(e!t, ha3e !o 2o&e# to e<e'$te /o# %e#ea''o%%o(atio! a !egotiabe i!"t#$%e!t o/ the 'o#2o#atio!/o# thei# i!(i3i($a (ebt" o# t#a!"a'tio!" a#i"i!g /#o% o# i!#eatio! to %atte#" i! &hi'h the 'o#2o#atio! ha" !oegiti%ate 'o!'e#!. Si!'e "$'h a''o%%o(atio! 2a2e#'a!!ot th$" be e!/o#'e( agai!"t the 'o#2o#atio!, e"2e'ia4"i!'e it i" !ot i!3o3e( i! a!4 a"2e't o/ the 'o#2o#ateb$"i!e"" o# o2e#atio!", the i!e"'a2abe 'o!'$"io! i! a&a!( i! ogi' i" that the "ig!ato#ie" the#eo/ "ha be2e#"o!a4 iabe the#e/o#, a" &e a" the 'o!"e9$e!'e"a#i"i!g /#o% thei# a't" i! 'o!!e'tio! the#e&ith.



The i!"ta!t 'a"e /a" "9$a#e4 &ithi! the 2$#3ie& o/ thea/o#e"ai( (e'i"io!a #$e". I/ &e i!($ge 2etitio!e# i! he#a/o#e"ai( 2o"t$atio!, the! "he i" ee'ti3e4 ba##e( /#o%#e'o3e#i!g /#o% Mo3e# E!te#2#i"e", I!'. the 3a$e o/ the'he'. Be that a" it %a4, 2etitio!e# i" !ot &itho$t #e'o$#"e.

The /a't that /o# a' o/ 'a2a'it4 the 'o#2o#atio! i" !otbo$!( b4 a! a''o%%o(atio! 2a2e# (oe" !ot the#eb4ab"o3e, b$t "ho$( #e!(e# 2e#"o!a4 iabe, the "ig!ato#ie"o/ "ai( i!"t#$%e!t &he#e the /a't" "ho& that thea''o%%o(atio! i!3o3e( &a" /o# thei# 2e#"o!a a''o$!t,$!(e#tai!g o# 2$#2o"e a!( the '#e(ito# &a" a&a#e the#eo/.

?etitio!e#, a" he#ei!be/o#e e<2ai!e(, &a" e3i(e!t4 'ha#ge(&ith the !o&e(ge that the 'he' &a" i""$e( at thei!"ta!'e a!( /o# the 2e#"o!a a''o$!t o/ Att4. Be!a#e" &ho%e#e4 2#e3aie( $2o! #e"2o!(e!t Sa!to" to a't a" 'o-"ig!ato#4 i! a''o#(a!'e &ith the a##a!ge%e!t o/ the

'o#2o#atio! &ith it" (e2o"ito#4 ba!. That it &a" a 2e#"o!a$!(e#tai!g o/ "ai( 'o#2o#ate oJ'e#" &a" a22a#e!t to2etitio!e# b4 #ea"o! o/ he# 2e#"o!a i!3o3e%e!t i! the5!a!'ia a##a!ge%e!t a!( the /a't that, &hie it &a" the'o#2o#atio!@" 'he' &hi'h &a" i""$e( to he# /o# the a%o$!ti!3o3e(, "he a't$a4 ha( !o t#a!"a'tio! (i#e't4 &ith "ai('o#2o#atio!.

The#e "ho$( be !o ega ob"ta'e, the#e/o#e, to 2etitio!e#@"'ai%" bei!g (i#e'te( 2e#"o!a4 agai!"t Att4. O"'a# .Be!a#e" a!( #e"2o!(e!t Ri'a#(o S. Sa!to", #., 2#e"i(e!t a!(3i'e-2#e"i(e!t, #e"2e'ti3e4, o/ Mo3e# E!te#2#i"e", I!'.

$#the#%o#e, #e"2o!(e!t Sa!to" i" a! a''o%%o(atio! 2a#t4a!( i" iabe /o# the 3a$e o/ the 'he'. The /a't that he &a"o!4 a 'o-"ig!ato#4 (oe" !ot (et#a't /#o% hi" 2e#"o!aiabiit4. A 'o-%ae# o# 'o-(#a&e# $!(e# the 'i#'$%"ta!'e" i!thi" 'a"e i" a" %$'h a! a''o%%o(atio! 2a#t4 a" the othe#'o-"ig!ato#4 o#, /o# that %atte#, a" a o!e "ig!ato#4 i! a!a''o%%o(atio! i!"t#$%e!t. U!(e# the (o't#i!e i! ?hii22i!eBa! o/ Co%%e#'e 3". A#$ego, "$2#a, he i" i! ee't a 'o-"$#et4 /o# the a''o%%o(ate( 2a#t4 &ith &ho% he a!( hi"'o-"ig!ato#4, a" the othe# 'o-"$#et4, a""$%e "oi(a#4iabiit4 e< ege /o# the (ebt i!3o3e(. With the (i"ho!o# o/

the 'he', the#e &a" '#eate( a (ebto#-'#e(ito# #eatio!"hi2,a" bet&ee! Att4. Be!a#e" a!( #e"2o!(e!t Sa!to", o! theo!e ha!(, a!( 2etitio!e#, o! the othe#. Thi" 'i#'$%"ta!'ee!abe" #e"2o!(e!t Sa!to" to #e"o#t to a! a'tio! o/ 'o!"ig!atio! &he#e hi" te!(e# o/ 2a4%e!t ha( bee! #e/$"e(

b4 2etitio!e#.We i!te#2o"e the 'a3eat, ho&e3e#, that b4 ho(i!g that the#e%e(4 o/ 'o!"ig!atio! i" 2#o2e# $!(e# the gi3e!'i#'$%"ta!'e", &e (o !ot the#eb4 #$e that a the o2e#ati3e/a't" /o# 'o!"ig!atio! &hi'h &o$( 2#o($'e the ee't o/ 2a4%e!t a#e 2#e"e!t i! thi" 'a"e. Tho"e a#e /a't$a i""$e"that a#e !ot 'ea# i! the #e'o#(" be/o#e $" a!( &hi'h a#e /o#the Regio!a T#ia Co$#t o/ Q$eo! Cit4 to a"'e#tai! i! Ci3iCa"e No. Q->, /o# &hi'h #ea"o! it ha" a(3i"e(4 bee!(i#e'te( b4 #e"2o!(e!t 'o$#t to gi3e ($e 'o$#"e to the'o%2ai!t /o# 'o!"ig!atio!, a!( &hi'h &o$( be "$be't to"$'h i""$e" o# 'ai%" a" %a4 be #ai"e( b4 (e/e!(a!t a!(

the 'o$!te#'ai% 5e( the#ei! &hi'h i" he#eb4 o#(e#e("i%ia#4 #e3i3e(.

3. Atri02 anag(2(nt C$r7. v. CA

ATRIUM MANAGEMENT COR?ORATION, 2etitio!e#, 3". COURTO A??EALS, E.T. HENR7 AND CO., LOURDES 6ICTORIA M. DELEON, RAAEL DE LEON, R., AND HI-CEMENT COR?ORATION,#e"2o!(e!t".

G.R. No. >>8=. eb#$a#4 F, >VLOURDES M. DE LEON, 2etitio!e#, 3". COURT O A??EALS,ATRIUM MANAGEMENT COR?ORATION, AND HI-CEMENTCOR?ORATION, #e"2o!(e!t".

Hi-Ce%e!t Co#2o#atio! th#o$gh it" 'o#2o#ate "ig!ato#ie",2etitio!e# Lo$#(e" M. (e Leo!,V t#ea"$#e#, a!( the ateA!to!io (e a" Aa", Chai#%a!, i""$e( 'he'" i! /a3o# o/ E.T.He!#4 a!( Co. I!'., a" 2a4ee. E.T. He!#4 a!( Co., I!'., i!t$#!, e!(o#"e( the /o$# 'he'" to 2etitio!e# At#i$%Ma!age%e!t Co#2o#atio! /o# 3a$abe 'o!"i(e#atio!. U2o!



2#e"e!t%e!t /o# 2a4%e!t, the (#a&ee ba! (i"ho!o#e( a/o$# 'he'" /o# the 'o%%o! #ea"o! 2a4%e!t "to22e(.At#i$%, th$", i!"tit$te( thi" a'tio! a/te# it" (e%a!( /o#2a4%e!t o/ the 3a$e o/ the 'he'" &a" (e!ie(.

T#ia Co$#t)

Lo$#(e" M. (e Leo!, he# h$"ba!( Ra/ae (e Leo!, E.T. He!#4a!( Co., I!'. a!( Hi-Ce%e!t Co#2o#atio! a#e iabe to At#i$%, oi!t4 a!( "e3e#a4.

Co$#t o/ A22ea")

Hi-Ce%e!t Co#2o#atio! &a" ab"o3e( /#o% iabiit4 a!((i"%i""i!g the 'o%2ai!t a" agai!"t it. The a22eate 'o$#t#$e( that) 0>1 Lo$#(e" M. (e Leo! &a" !ot a$tho#ie( toi""$e the "$be't 'he'" i! /a3o# o/ E.T. He!#4, I!'.; 01 Thei""$a!'e o/ the "$be't 'he'" b4 Lo$#(e" M. (e Leo! a!(the ate A!to!io (e a" Aa" 'o!"tit$te( $t#a 3i#e" a't"; a!(

01 The "$be't 'he'" &e#e !ot i""$e( /o# 3a$abe'o!"i(e#atio!.

The i//0(/ #ai"e( a#e the /oo&i!g)

I! G. R. No. >8=8> 0At#i$%, 2etitio!e#1)

>. Whethe# the i""$a!'e o/ the 9$e"tio!e( 'he'" &a" a!$t#a 3i#e" a't;

. Whethe# At#i$% &a" !ot a ho(e# i! ($e 'o$#"e a!( /o#3a$e; a!(

. Whethe# the Co$#t o/ A22ea" e##e( i! #$i!g that2etitio!e# Lo$#(e" M. (e Leo! a" "ig!ato#4 o/ the 'he'"&a" 2e#"o!a4 iabe /o# the 3a$e o/ the 'he'", &hi'h &e#e(e'a#e( to be i""$e( &itho$t 'o!"i(e#atio!;

R0'ing)

We 5#"t #e"o3e the i""$e o/ &hethe# the i""$a!'e o/ the'he'" &a" a! $t#a 3i#e" a't. The #e'o#( #e3ea" that Hi-Ce%e!t Co#2o#atio! i""$e( the /o$# 0=1 'he'" to e<te!(5!a!'ia a""i"ta!'e to E.T. He!#4, !ot a" 2a4%e!t o/ thebaa!'e o/ the ? %iio! 2e"o" 'o"t o/ h4(#o oi (ei3e#e(b4 E.T. He!#4 to Hi-Ce%e!t. Wh4 e"e &o$( 2etitio!e# (e

Leo! a" /o# 'o$!te#2a#t 'he'" /#o% E.T. He!#4 i/ the'he'" &e#e i! 2a4%e!t /o# h4(#o oi (ei3e#e( b4 E.T. He!#4to Hi-Ce%e!t

The a't o/ i""$i!g the 'he'" &a" &e &ithi! the a%bit o/ a3ai( 'o#2o#ate a't, /o# it &a" /o# "e'$#i!g a oa! to 5!a!'e

the a'ti3itie" o/ the 'o#2o#atio!, he!'e, !ot a! $t#a 3i#e"a't. 0A! $t#a 3i#e" a't i" o!e 'o%%itte( o$t"i(e the obe't/o# &hi'h a 'o#2o#atio! i" '#eate( a" (e5!e( b4 the a& o/ it" o#ga!iatio! a!( the#e/o#e be4o!( the 2o&e# 'o!/e##e($2o! it b4 a&1

The !e<t 9$e"tio! to (ete#%i!e i" &hethe# Lo$#(e" M. (eLeo! a!( A!to!io (e a" Aa" &e#e 2e#"o!a4 iabe /o# the'he'" i""$e( a" 'o#2o#ate oJ'e#" a!( a$tho#ie("ig!ato#ie" o/ the 'he'.

I! the 'a"e at ba#, Lo$#(e" M. (e Leo! a!( A!to!io (e a"Aa" a" t#ea"$#e# a!( Chai#%a! o/ Hi-Ce%e!t &e#e

a$tho#ie( to i""$e the 'he'". Ho&e3e#, M". (e Leo! &a"!egige!t &he! "he "ig!e( the 'o!5#%atio! ette# #e9$e"te(b4 M#. 7a2 o/ At#i$% a!( M#. He!#4 o/ E.T. He!#4 /o# the#e(i"'o$!ti!g o/ the '#o""e( 'he'" i""$e( i! /a3o# o/ E.T.He!#4. She &a" a&a#e that the 'he'" &e#e "t#i't4 e!(o#"e(/o# (e2o"it o!4 to the 2a4ee" a''o$!t a!( !ot to be /$#the#!egotiate(. What i" %o#e, the 'o!5#%atio! ette# 'o!tai!e(a 'a$"e that &a" !ot t#$e, that i", that the 'he'" i""$e( toE.T. He!#4 &e#e i! 2a4%e!t o/ H4(#o oi bo$ght b4 Hi-Ce%e!t /#o% E.T. He!#4. He# !egige!'e #e"$te( i! (a%ageto the 'o#2o#atio!. He!'e, M". (e Leo! %a4 be he(2e#"o!a4 iabe the#e/o#.

The !e<t i""$e i" &hethe# o# !ot 2etitio!e# At#i$% &a" aho(e# o/ the 'he'" i! ($e 'o$#"e.

I! the i!"ta!t 'a"e, the 'he'" &e#e '#o""e( 'he'" a!("2e'i5'a4 i!(o#"e( /o# (e2o"it to 2a4ee" a''o$!t o!4.#o% the begi!!i!g, At#i$% &a" a&a#e o/ the /a't that the'he'" &e#e a /o# (e2o"it o!4 to 2a4ee" a''o$!t, %ea!i!gE.T. He!#4. Cea#4, the!, At#i$% 'o$( !ot be 'o!"i(e#e( aho(e# i! ($e 'o$#"e.

Di"2o"itio!)



Ho&e3e#, it (oe" !ot /oo& a" a ega 2#o2o"itio! that"i%24 be'a$"e 2etitio!e# At#i$% &a" !ot a ho(e# i! ($e'o$#"e /o# ha3i!g tae! the i!"t#$%e!t" i! 9$e"tio! &ith!oti'e that the "a%e &a" /o# (e2o"it o!4 to the a''o$!t o/ 2a4ee E.T. He!#4 that it &a" atogethe# 2#e'$(e( /#o%

#e'o3e#i!g o! the i!"t#$%e!t. The Negotiabe I!"t#$%e!t"La& (oe" !ot 2#o3i(e that a ho(e# !ot i! ($e 'o$#"e 'a!!ot #e'o3e# o! the i!"t#$%e!t.>8V

The (i"a(3a!tage o/ At#i$% i! !ot bei!g a ho(e# i! ($e'o$#"e i" that the !egotiabe i!"t#$%e!t i" "$be't to(e/e!"e" a" i/ it &e#e !o!-!egotiabe.V O!e "$'h (e/e!"ei" ab"e!'e o# /ai$#e o/ 'o!"i(e#atio!.>V We !ee( !ot #$eo! the othe# i""$e" #ai"e(, a" the4 %e#e4 /oo& a" a'o!"e9$e!'e o/ the /o#egoi!g #e"o$tio!".

WHEREORE, the 2etitio!" a#e he#eb4 DENIED. The (e'i"io!a!( #e"o$tio! o/ the Co$#t o/ A22ea" i! CA-G. R. C6 No.

F, a#e he#eb4 AIRMED i! toto.

). PNB v. CA

G.R. No. >+F A2#i +, >88

?HILI??INE NATIONAL BAN:, 2etitio!e#,3".COURT O A??EALS, CA?ITOL CIT7 DE6ELO?MENT BAN:,?HILI??INE BAN: O COMMUNICATIONS, a!( . ABANTEMAR:ETING, #e"2o!(e!t".

XXA! ate#atio! i" "ai( to be %ate#ia i/ it ate#" the ee't o/ the i!"t#$%e!t.XXI! othe# &o#(", a %ate#ia ate#atio! i" o!e &hi'h 'ha!ge"the ite%" &hi'h a#e #e9$i#e( to be "tate( $!(e# Se'tio! > o/ the Negotiabe I!"t#$%e!t" La&.

Thi" i" a 2etitio! /o# #e3ie& o! 'e#tio#a#i $!(e# R$e =+ o/ theR$e" o/ Co$#t a""aii!g the (e'i"io! (ate( A2#i 8, >88 o/ #e"2o!(e!t Co$#t o/ A22ea" i! CA-G.R. C6 No. = a!( it"#e"o$tio! (ate( Se2te%be# >, >88, (e!4i!g 2etitio!e#?hii22i!e Natio!a Ba!@" %otio! /o# #e'o!"i(e#atio! o/ "ai((e'i"io!.

Fa8t/)A 'he' &ith "e#ia !$%be# ---, (ate( A$g$"t ,>8F> i! the a%o$!t o/ ?8,+. &a" i""$e( b4 theMi!i"t#4 o/ E($'atio! a!( C$t$#e 0!o& De2a#t%e!t o/ E($'atio!, C$t$#e a!( S2o#t" DECSV1 2a4abe to . Aba!te

Ma#eti!g. Thi" 'he' &a" (#a&! agai!"t ?hii22i!e Natio!aBa! 0he#ei! 2etitio!e#1.

O! A$g$"t >>, >8F>, . Aba!te Ma#eti!g, a 'ie!t o/ Ca2itoCit4 De3eo2%e!t Ba! 0Ca2ito1, (e2o"ite( the 9$e"tio!e('he' i! it" "a3i!g" a''o$!t &ith "ai( ba!. I! t$#!, Ca2ito(e2o"ite( the "a%e i! it" a''o$!t &ith the ?hii22i!e Ba!o/ Co%%$!i'atio!" 0?BCo%1 &hi'h, i! t$#!, "e!t the 'he'to 2etitio!e# /o# 'ea#i!g.

?etitio!e# 'ea#e( the 'he' a" goo( a!(, the#ea/te#, ?BCo%'#e(ite( Ca2ito@" a''o$!t /o# the a%o$!t "tate( i! the'he'. Ho&e3e#, o! O'tobe# >8, >8F>, 2etitio!e# #et$#!e(

the 'he' to ?BCo% a!( (ebite( ?BCo%@" a''o$!t /o# thea%o$!t 'o3e#e( b4 the 'he', the #ea"o! bei!g that the#e&a" a *%ate#ia ate#atio!* o/ the 'he' !$%be#. ?BCo%, a"'oe'ti!g age!t o/ Ca2ito, the! 2#o'ee(e( to (ebit theatte#@" a''o$!t /o# the "a%e a%o$!t, a!( "$b"e9$e!t4,"e!t the 'he' ba' to 2etitio!e#. ?etitio!e#, ho&e3e#,#et$#!e( the 'he' to ?BCo%.

O! the othe# ha!(, Ca2ito 'o$( !ot, i! t$#!, (ebit . Aba!teMa#eti!g@" a''o$!t "i!'e the atte# ha( a#ea(4 &ith(#a&!the a%o$!t o/ the 'he' a" o/ O'tobe# >+, >8F>. Ca2ito"o$ght 'a#i5'atio! /#o% ?BCo% a!( (e%a!(e( the #e-'#e(iti!g o/ the a%o$!t. ?BCo% /oo&e( "$it b4 #e9$e"ti!g

a! e<2a!atio! a!( #e-'#e(iti!g /#o% 2etitio!e#.

Si!'e the (e%a!(" o/ Ca2ito &e#e !ot hee(e(, it 5e( a 'i3i"$it &ith the Regio!a T#ia Co$#t o/ Ma!ia agai!"t ?BCo%&hi'h, i! t$#!, 5e( a thi#(-2a#t4 'o%2ai!t agai!"t2etitio!e# /o# #ei%b$#"e%e!ti!(e%!it4 &ith #e"2e't to the'ai%" o/ Ca2ito. ?etitio!e#, o! it" 2a#t, 5e( a /o$#th-2a#t4'o%2ai!t agai!"t . Aba!te Ma#eti!g.

RTC R$i!g)

WHEREORE, $(g%e!t i" he#eb4 #e!(e#e( a" /oo&")



>.1 O! 2ai!ti" 'o%2ai!t, (e/e!(a!t ?hii22i!e Ba! o/ Co%%$!i'atio!" i" o#(e#e( to #e-'#e(it o# #ei%b$#"e 2ai!ti Ca2ito Cit4 De3eo2%e!t Ba! the a%o$!t o/ ?8,+.,2$" i!te#e"t o/ > 2e#'e!t the#eto /#o% O'tobe# >8, >8F>$!ti the a%o$!t i" /$4 2ai(;

.1 O! ?hii22i!e Ba! o/ Co%%$!i'atio!" thi#(-2a#t4'o%2ai!t thi#(-2a#t4 (e/e!(a!t ?NB i" o#(e#e( to #ei%b$#"ea!( i!(e%!i/4 ?hii22i!e Ba! o/ Co%%$!i'atio!" /o#&hate3e# a%o$!t ?BCo% 2a4" to 2ai!ti;.1 O! ?hii22i!e Natio!a Ba!@" /o$#th-2a#t4 'o%2ai!t, .Aba!te Ma#eti!g i" o#(e#e( to #ei%b$#"e a!( i!(e%!i/4?NB /o# &hate3e# a%o$!t ?NB 2a4" to ?BCo%;=.1 O! atto#!e4@" /ee", ?hii22i!e Ba! o/ Co%%$!i'atio!" i"o#(e#e( to 2a4 Ca2ito Cit4 De3eo2%e!t Ba! atto#!e4@"/ee" i! the a%o$!t o/ Te! Tho$"a!( 0?>,.1 ?e"o"; b$t?BCo% i" e!tite( to #ei%b$#"e%e!ti!(e%!it4 /#o% ?NB;a!( ?hii22i!e Natio!a Ba! to be, i! t$#! #ei%b$#"e( o#

i!(e%!i5e( b4 . Aba!te Ma#eti!g /o# the "a%e a%o$!t;+.1 The Co$!te#'ai%" o/ ?BCo% a!( ?NB a#e he#eb4(i"%i""e(;.1 No 2#o!o$!'e%e!t a" to 'o"t".

SO ORDERED.

Co$#t o/ A22ea"K R$i!g)

WHEREORE, the $(g%e!t a22eae( /#o% i" %o(i5e( b4e<e%2ti!g ?BCo% /#o% iabiit4 to 2ai!ti-a22eee /o#atto#!e4@" /ee" a!( o#(e#i!g ?NB to ho!o# the 'he' /o#?8,+., &ith i!te#e"t a" (e'a#e( b4 the t#ia 'o$#t, a!(2a4 2ai!ti-a22eee atto#!e4@" /ee" o/ ?>,.. A/te#

the 'he' "ha ha3e bee! ho!o#e( b4 ?NB, ?BCo% "ha #e-'#e(it 2ai!ti-a22eee@" a''o$!t &ith it &ith the a%o$!t.No 2#o!o$!'e%e!t a" to 'o"t".

SO ORDERED.

He!'e, thi" 2etitio!.

I//0()

Whethe# o# !ot a! ate#atio! o/ the "e#ia !$%be# o/ a 'he'i" a %ate#ia ate#atio! $!(e# the Negotiabe I!"t#$%e!t"La&

R0'ing)No.

?etitio!e# a!'ho#" it" 2o"itio! o! Se'tio! >+ o/ theNegotiabe I!"t#$%e!t" La& 0ACT No. >1 + &hi'h2#o3i(e")

Se'. >+. What 'o!"tit$te" a %ate#ia ate#atio!. A!4ate#atio! &hi'h 'ha!ge")

0a1 The (ate;0b1 The "$% 2a4abe, eithe# /o# 2#i!'i2a o# i!te#e"t;0'1 The ti%e o# 2a'e o/ 2a4%e!t;0(1 The !$%be# o# the #eatio!" o/ the 2a#tie";0e1 The %e(i$% o# '$##e!'4 i! &hi'h 2a4%e!t i" to be

%a(e;0/1 O# &hi'h a((" a 2a'e o/ 2a4%e!t &he#e !o 2a'e o/ 2a4%e!t i" "2e'i5e(, o# a!4 othe# 'ha!ge o# a((itio! &hi'hate#" the ee't o/ the i!"t#$%e!t i! a!4 #e"2e't, i" a%ate#ia ate#atio!.

?etitio!e# aege" that the#e i" !o ha#( a!( /a"t #$e i! thei!te#2#etatio! o/ the a/o#e9$ote( 2#o3i"io! o/ the NegotiabeI!"t#$%e!t" La&. It %ai!tai!" that $!(e# Se'tio! >+0/1, a!4'ha!ge that ate#" the ee't o/ the i!"t#$%e!t i" a %ate#iaate#atio!.

We (o !ot ag#ee.

A! ate#atio! i" "ai( to be %ate#ia i/ it ate#" the ee't o/ the i!"t#$%e!t. It %ea!" a! $!a$tho#ie( 'ha!ge i! a!i!"t#$%e!t that 2$#2o#t" to %o(i/4 i! a!4 #e"2e't theobigatio! o/ a 2a#t4 o# a! $!a$tho#ie( a((itio! o/ &o#(" o#!$%be#" o# othe# 'ha!ge to a! i!'o%2ete i!"t#$%e!t#eati!g to the obigatio! o/ a 2a#t4. I! othe# &o#(", a%ate#ia ate#atio! i" o!e &hi'h 'ha!ge" the ite%" &hi'h a#e#e9$i#e( to be "tate( $!(e# Se'tio! > o/ the NegotiabeI!"t#$%e!t" La&.

Se'tio! > o/ the Negotiabe I!"t#$%e!t" La& 2#o3i(e")



Se'. >. — o#% o/ !egotiabe i!"t#$%e!t". A! i!"t#$%e!t tobe !egotiabe %$"t 'o!/o#% to the /oo&i!g #e9$i#e%e!t")

0a1 It %$"t be i! &#iti!g a!( "ig!e( b4 the %ae# o# (#a&e#;0b1 M$"t 'o!tai! a! $!'o!(itio!a 2#o%i"e o# o#(e# to 2a4 a"$% 'e#tai! i! %o!e4;

0'1 M$"t be 2a4abe o! (e%a!(, o# at a 5<e( o#(ete#%i!abe /$t$#e ti%e;0(1 M$"t be 2a4abe to o#(e# o# to bea#e#; a!(0e1 Whe#e the i!"t#$%e!t i" a((#e""e( to a (#a&ee, he %$"tbe !a%e( o# othe#&i"e i!(i'ate( the#ei! &ith #ea"o!abe'e#tai!t4.

The 'a"e at be!'h i" $!i9$e i! the "e!"e that &hat &a"ate#e( i" the "e#ia !$%be# o/ the 'he' i! 9$e"tio!, a!ite% &hi'h, it 'a! #ea(i4 be ob"e#3e(, i" !ot a! e""e!tia#e9$i"ite /o# !egotiabiit4 $!(e# Se'tio! > o/ the NegotiabeI!"t#$%e!t" La&. The a/o#e%e!tio!e( ate#atio! (i( !ot

'ha!ge the #eatio!" bet&ee! the 2a#tie". The !a%e o/ the(#a&e# a!( the (#a&ee &e#e !ot ate#e(. The i!te!(e(2a4ee &a" the "a%e. The "$% o/ %o!e4 ($e to the 2a4ee#e%ai!e( the "a%e. The 'he'@" "e#ia !$%be# i" !ot the "oe i!(i'atio! o/ it"o#igi!.. A" "$''i!'t4 /o$!( b4 the Co$#t o/ A22ea", the!a%e o/ the go3e#!%e!t age!'4 &hi'h i""$e( the "$be't'he' &a" 2#o%i!e!t4 2#i!te( the#ei!. The 'he'@" i""$e#&a" the#e/o#e "$J'ie!t4 i(e!ti5e(, #e!(e#i!g the #e/e##a tothe "e#ia !$%be# #e($!(a!t a!( i!'o!"e9$e!tia.?etitio!e#, th$" 'a!!ot #e/$"e to a''e2t the 'he' i!9$e"tio! o! the g#o$!( that the "e#ia !$%be# &a" ate#e(,

the "a%e bei!g a! i%%ate#ia o# i!!o'e!t o!e.WHEREORE, 2#e%i"e" 'o!"i(e#e(, e<'e2t /o# the (eetio!o/ the a&a#( o/ atto#!e4@" /ee", the (e'i"io! o/ the Co$#t o/ A22ea" i" he#eb4 AIRMED.

SO ORDERED.

4. a0'ini v. S(rran$

FACTS)

2#o%i""o#4 !ote) ,. D$e +th o/ Se2te%be#,>8>.

We oi!t4 a!( "e3e#a4 ag#ee to 2a4 to theo#(e# o/ Do! A!to!io G. Se##a!o o! o# be/o#e the +th (a4 o/Se2te%be#, >8>, the "$% o/ th#ee tho$"a!( 2e"o" 0?,1/o# 3a$e #e'ei3e( /o# 'o%%e#'ia o2e#atio!". Noti'e a!(2#ote"t #e!o$!'e(. I/ the "$% he#ei! %e!tio!e( i" !ot'o%2ete4 2ai( o! the +th (a4 o/ Se2te%be#, >8>, thi"i!"t#$%e!t &i (#a& i!te#e"t at the #ate o/ >Y 2e# 'e!t 2e#%o!th /#o% the (ate &he! ($e $!ti the (ate o/ it" 'o%2ete2a4%e!t. The %ae#" he#eo/ ag#ee to 2a4 the a((itio!a"$% o/ ?+ a" atto#!e4@" /ee" i! 'a"e o/ /ai$#e to 2a4 the!ote.

Ma!ia, $!e +, >8>.0Sg(.1 o# ?a(e#!, Mo#e!o Co., b4 . Mo#e!o, %e%be# o/the 5#%. o# o"e ?a(e#!, b4 . Mo#e!o. A!ge Gi%e!e.

The !ote &a" i!(o#"e( o! the ba' a" /oo&")?a4 !ote to the o#(e# o/ Do! e#!a!(o Ma$i!i, 3a$e#e'ei3e(. Ma!ia, $!e +, >8>. 0Sg(.1 A.G. Se##a!o.

Ma$i!i@" b$"i!e"" a" a b#oe# 'o!"i"te( i! ooi!g $2

a!( a"'e#tai!i!g 2e#"o!" &ho ha( %o!e4 to oa! a" &e a"tho"e &ho (e"i#e( to bo##o& %o!e4 a!(, a'ti!g a" a%e(ia#4, !egotiate a oa! bet&ee! the t&o

Metho( $"$a4 /oo&e() the b#oe# (ei3e#e(the %o!e4 2e#"o!a4 to the bo##o&e#, too !ote i! hi" o&!!a%e a!( i%%e(iate4 t#a!"/e##e( it b4 i!(o#"e%e!t to thee!(e#

(o!e at the "2e'ia #e9$e"t o/ the i!(o#"eea!( "i%24 a" a /a3o# to hi%, the atte# "tati!g to the b#oe#



that he (i( !ot &i"h hi" !a%e to a22ea# o! the boo" o/ thebo##o&i!g 'o%2a!4 a" a e!(e# o/ %o!e4 a!( that he(e"i#e( that the b#oe# tae the !ote i! hi" o&! !a%e,i%%e(iate4 t#a!"/e##i!g to hi% tite the#eto b4 i!(o#"e%e!t

T#ia Co$#t) i%%ate#ia &hethe# the#e &a" a

'o!"i(e#atio! /o# the t#a!"/e# o# !ot, a" the i!(o#"e#, $!(e#the e3i(e!'e oe#e(, &a" a! a''o%%o(atio! i!(o#"e#.

ISSUES) WN Se##a!o &a" a! a''o%o(atio! i!(o#"e#

HELD) $(g%e!t #e3e#"e(.

!e3e# &a" a %o%e!t &he! Se##a!o &a" the #eao&!e# o/ the !ote

The o!4 2a4%e!t that the b#oe# #e'ei3e(&a" /o# hi" "e#3i'e" i! !egotiati!g the oa!.

I! 'a"e" o/ a''o%%o(atio! i!(o#"e%e!t the i!(o#"e#%ae" the i!(o#"e%e!t /o# the a''o%%o(atio! o/ the%ae#. S$'h a! i!(o#"e%e!t i" ge!e#a4 /o# the 2$#2o"e o/bette# "e'$#i!g the 2a4%e!t o/ the !ote

e!( hi" !a%e to the %ae#, NOT to the ho(e#

i!(o#"e%e!t i" %a(e a" a /a3o# to the i!(o#"ee, &ho#e9$e"t" it, !ot the bette# to "e'$#e 2a4%e!t, b$t to #eie3ehi%"e/ /#o% a (i"ta"te/$ "it$atio!, a!( &he#e the o!4'o!"i(e#atio! /o# "$'h i!(o#"e%e!t 2a""e" /#o% the i!(o#"e#to the i!(o#"ee, the "it$atio! (oe" !ot 2#e"e!t o!e '#eati!g

a! a''o%%o(atio! i!(o#"e%e!t, !o# o!e &he#e the#e i" a'o!"i(e#atio! "$J'ie!t to "$"tai! a! a'tio! o! thei!(o#"e%e!t.

?a#o e3i(e!'e &a" a(%i""ibe /o# the 2$#2o"e!a%e(.

*. E90ita:'( Ban;ing v. S7(8ia' St(('

E90ita:'( Ban;ing C$r7$rati$n v. S7(8ia' St((' Pr$d08t/,In8.

G.R. No. >++, $!e >, >

Parti(/

• S2e'ia Stee ?#o($'t", I!'. 0SS?I1 a 2#i3ate (o%e"ti''o#2o#atio! "ei!g "tee 2#o($'t"

• ?a#(o - SS?I" ?#e"i(e!t a!( %ao#it4 "to'ho(e#

• I!te#!atio!a Co2#a E<2o#t Co#2o#atio! 0I!te#'o1- #eg$a#'$"to%e# o/ SS?I

• U4 - I!te#'o e%2o4ee, i! 'ha#ge o/ the 2$#'ha"i!g

(e2a#t%e!t, a!( the "o!-i!-a& o/ it" %ao#it4 "to'ho(e#• E9$itabe Ba!i!g Co#2o#atio! 0E9$itabe o# ba!1

(e2o"ito#4 ba! o/ I!te#'o a!( o/ U4

Fa8t/

I! >88>, SS?I "o( &e(i!g ee't#o(e" to I!te#'o. Thei!3oi'e" 2#o3i(e( that I!te#'o &o$( 2a4 i!te#e"t at the #ate o/ 2e# a!!$% i! 'a"e o/ (ea4. I! 2a4%e!t /o# the abo3e&e(i!g ee't#o(e", I!te#'o i""$e( th#ee 'he'" 2a4abe to theo#(e# o/ SS?I. Ea'h 'he' &a" '#o""e( &ith the !otatio! account payee only a!( &a" (#a&! agai!"t E9$itabe. The #e'o#(" (o !oti(e!ti/4 the "ig!ato#4 /o# the"e th#ee 'he'", o# e<2ai! ho& U4,I!te#'o" 2$#'ha"i!g oJ'e#, 'a%e i!to 2o""e""io! o/ the"e 'he'". The #e'o#(" o!4 (i"'o"e that U4 2#e"e!te( ea'h '#o""e( 'he'to E9$itabe o! the (a4 o/ it" i""$a!'e a!( 'ai%e( that he ha(goo( tite the#eto. He (e%a!(e( the (e2o"it o/ the 'he'" i! hi"2e#"o!a a''o$!t" i! E9$itabe, a!( the atte# a''e(e( to U4"(e%a!(" o! the a""$%2tio! that U4, a" the "o!-i!-a& o/ I!te#'o"%ao#it4 "to'ho(e#, &a" a'ti!g 2$#"$a!t to I!te#'o" o#(e#". The



ba! a"o #eie( o! U4" "tat$" a" a 3a$e( 'ie!t. Th$", E9$itabea''e2te( the 'he'" /o# (e2o"it i! U4" 2e#"o!a a''o$!t" a!("ta%2e( ALL ?RIOR ENDORSEMENT ANDOR LAC: OENDORSEMENT GUARANTEED o! thei# (o#"a 2o#tio!. U42#o%2t4 &ith(#e& the 2#o'ee(" o/ the 'he'".

I! O'tobe# >88>, SS?I #e%i!(e( I!te#'o o/ the $!2ai(&e(i!g ee't#o(e". I!te#'o #e2ie( that it ha( a#ea(4 i""$e(th#ee 'he'" 2a4abe to SS?I a!( (#a&! agai!"t E9$itabe. SS?I(e!ie( #e'ei2t o/ the"e 'he'". O! A$g$"t , >88, SS?I#e9$e"te( i!/o#%atio! /#o% E9$itabe #ega#(i!g the th#ee 'he'". The ba! #e/$"e( to gi3e a!4 i!/o#%atio! i!3oi!g the'o!5(e!tiait4 o/ (e2o"it".

It &a" (ete#%i!e( that U4, !ot SS?I, #e'ei3e( the

2#o'ee(" o/ the th#ee 'he'" that &e#e 2a4abe to SS?I. Th$", o! $!e , >88 0t&e!t4-th#ee %o!th" a/te# the i""$a!'e o/ theth#ee 'he'"1, I!te#'o 5!a4 2ai( the 3a$e o/ the th#ee 'he'" toSS?I, 2$" a 2o#tio! o/ the a''#$e( i!te#e"t". I!te#'o #e/$"e( to2a4 the e!ti#e a''#$e( i!te#e"t o/ o! the g#o$!( that it &a" !ot#e"2o!"ibe /o# the (ea4. He!'e, ?a#(o 5e( a 'o%2ai!t /o#(a%age".

I//0(

Whethe# o# !ot SS?I ha" a 'a$"e o/ a'tio! agai!"t E9$itabe /o#9$a"i-(ei't a!( &hethe# SS?I 'a! #e'o3e#, a" a't$a (a%age",the "ti2$ate( 2e# a!!$% i!te#e"t /#o% E9$itabe

H('d

Yes. E9$itabe i" "oi(a#i4 iabe &ith U4 to 'o%2e!"ateSS?I /o# the (a%age" it "$e#e(. Thi" Co$#t a"o ao&"E9$itabeK" '#o""-'ai% agai!"t U4.

E9$itabe a#g$e" that SS?I 'a!!ot a""e#t a #ight agai!"tthe ba! ba"e( o! the $!(ei3e#e( 'he'", a#g$i!g that a 2a4ee,&ho (i( !ot #e'ei3e the 'he', 'a!!ot #e9$i#e the (#a&ee ba! to2a4 it the "$% "tate( o! the 'he'". Thi" a#g$%e!t i" %i"2a'e(.SS?I" 'a$"e o/ a'tio! i" !ot ba"e( o! the th#ee 'he'", b$ti!"tea( a""e#t" a 'a$"e o/ a'tio! ba"e( o! 9$a"i-(ei't..

C#o""e( 'he'")

The 'he'" that I!te#'o i""$e( i! /a3o# o/ SS?I &e#e a

'#o""e(, %a(e 2a4abe to SS?I" o#(e#, a!( 'o!tai!e( the!otatio! a''o$!t 2a4ee o!4. Thi" '#eate" a #ea"o!abee<2e'tatio! that the 2a4ee ao!e &o$( #e'ei3e the 2#o'ee(" o/ the 'he'" a!( that (i3e#"io! o/ the 'he'" &o$( be a3e#te(. Thi" e<2e'tatio! a#i"e" /#o% the a''e2te( ba!i!g 2#a'ti'e that'#o""e( 'he'" a#e i!te!(e( /o# (e2o"it i! the !a%e( 2a4ee"a''o$!t o!4 a!( !o othe#. At the 3e#4 ea"t, the !at$#e o/ '#o""e( 'he'" "ho$( 2a'e a ba! o! !oti'e that it "ho$(e<e#'i"e %o#e 'a$tio! o# e<2e!( %o#e tha! a '$#"o#4 i!9$i#4, toa"'e#tai! &hethe# the 2a4ee o! the 'he' ha" a$tho#ie( theho(e# to (e2o"it the "a%e i! a (ie#e!t a''o$!t. I! thi"'o!!e'tio!, it i" i%2o#ta!t that ba!" "ho$( g$a#( agai!"t i!$#4

att#ib$tabe to !egige!'e o# ba( /aith o! it" 2a#t. A" #e2eate(4e%2ha"ie(, "i!'e the ba!i!g b$"i!e"" i" i%2#e""e( &ith 2$bi'i!te#e"t, the t#$"t a!( 'o!5(e!'e o/ the 2$bi' i! it i" o/ 2a#a%o$!t i%2o#ta!'e. Co!"e9$e!t4, the highe"t (eg#ee o/ (iige!'e i" e<2e'te(, a!( high "ta!(a#(" o/ i!teg#it4 a!(2e#/o#%a!'e a#e #e9$i#e( o/ it.

E9$itabe (i( !ot ob"e#3e the #e9$i#e( (eg#ee o/ (iige!'ee<2e'te( o/ a ba!i!g i!"tit$tio! $!(e# the e<i"ti!g /a't$a'i#'$%"ta!'e". It "ho$( ha3e veried i/ the 2a4ee 0SS?I1



a$tho#ie( the ho(e# 0U41 to 2#e"e!t the "a%e i! it" beha/, o#i!(o#"e( it to hi%. Co!"i(e#i!g ho&e3e#, that the !a%e( 2a4ee(oe" !ot ha3e a! a''o$!t &ith E9$itabe 0he!'e, the atte# ha" !o"2e'i%e! "ig!at$#e o/ SS?I b4 &hi'h to $(ge the ge!$i!e!e"" o/ it" i!(o#"e%e!t to U41, the ba! !o&i!g4 a""$%e( the #i" o/

#e4i!g "oe4 o! U4" &o#( that he ha( a goo( tite to the th#ee'he'". S$'h %i"2a'e( #eia!'e o! e%2t4 &o#(" i" ta!ta%o$!tto g#o"" !egige!'e.

E9$itabe 'o!te!(" that it" !o&e(ge that U4 i" the "o!-i!-a& o/ the %ao#it4 "to'ho(e# o/ the (#a&e#, I!te#'o, %a(e it"a/e to assume that the (#a&e# a$tho#ie( U4 to countermandthe o#(e# a22ea#i!g o! the 'he'. I! othe# &o#(", E9$itabetheo#ie" that I!te#'o #e'o!"i(e#e( it" o#igi!a o#(e# a!( (e'i(e(to gi3e the 2#o'ee(" o/ the 'he'" to U4. That the ba! a##i3e( atthi" 'o!'$"io! &itho$t a!4thi!g o! the /a'e o/ the 'he'" to

"$22o#t it i" (e%o!"t#ati3e o/ it" a' o/ 'a$tio!. It i" t#o$bi!gthat E9$itabe 2#o'ee(e( &ith the t#a!"a'tio! ba"e( o!4 o! it"!o&e(ge that U4 ha( 'o"e #eatio!" &ith I!te#'o. The ba! (i(!ot e3e! %ae i!9$i#ie" &ith the (#a&e#, I!te#'o 0&ho% the ba!'o!"i(e#e( a 3a$e( 'ie!t1, to 3e#i/4 U4" #e2#e"e!tatio!.

1-. RCBC v. HiTri

RCBC 3". HiTri D(v('$72(nt C$r7. and L0< R.Ba;0na=a,

G.R. N$. 1*"1, 60n( 1, "-1"

Fa8t/!

Mia! 2ai( the "2o$"e" Ba$!a&a ?>,>8,+>=.8 a" (o&!2a4%e!t /o# the 2$#'ha"e o/ "i< 01 ot" &ith the S2o$"e"Ba$!a&a gi3i!g Mia! the O&!e#K" Co2ie" o/ TCT" o/ "ai(ot".

D$e to "o%e ob"ta'e", the "ae (i( !ot 2$"h th#o$gh; "oS2o$"e" Ba$!a&a #e"'i!(e( the "ae a!( oe#e( to #et$#!to Mia! he# (o&!. Ho&e3e#, Mia! #e/$"e( to a''e2t ba'the (o&! 2a4%e!t. Co!"e9$e!t4, the S2o$"e" Ba$!a&a,th#o$gh thei# 'o%2a!4, Hi-T#i too o$t o! O'tobe# F, >88>,

a Ma!age#K" Che' /#o% RCBC-E#%ita i! the a%o$!to/ ? >,>8,+>=.8, 2a4abe to Mia!K" 'o%2a!4 Ro"%i a!($"e( thi" a" o!e o/ thei# ba"i" /o# a 'o%2ai!t agai!"t Mia!.

The S2o$"e" Ba$!a&a #etai!e( '$"to(4 o/ RCBC Ma!age#K"Che' a!( #e/#ai!e( /#o% 'a!'ei!g o# !egotiati!g it. Mia!&a" a"o i!/o#%e( that the Ma!age#K" Che' &a" a3aiabe/o# he# &ith(#a&a, "he bei!g the 2a4ee.

O! a!$a#4 >, , &itho$t the !o&e(ge o/ S2o$"e"Ba$!a&a, RCBC #e2o#te( the *? >,>8,+>=.8-'#e(ite<i"ti!g i! /a3o# o/ Ro"%i to the B$#ea$ o/ T#ea"$#4 a"a%o!g it" *$!'ai%e( baa!'e"* a" o/ a!$a#4 >, . O!

De'e%be# >=, , the Re2$bi', th#o$gh the OJ'e o/ theSoi'ito# Ge!e#a 0OSG1, 5e( &ith the RTC the a'tio! /o#E"'heat.

O! A2#i , F, S2o$"e" Ba$!a&a "ette( a%i'ab4 thei#(i"2$te &ith Mia!. S2o$"e" Ba$!a&a t#ie( to #e'o3e#the ?>,>8,+>=.8 $!(e# Ma!age#K" Che' b$t the4 &e#ei!/o#%e( that the a%o$!t &a" a#ea(4 "$be't o/ thee"'heat 2#o'ee(i!g" be/o#e the RTC.

The t#ia 'o$#t o#(e#e( the (e2o"it o/ the e"'heate(baa!'e" &ith the T#ea"$#e# a!( '#e(ite( i! /a3o# o/ theRe2$bi'. Re"2o!(e!t" 'ai% that the4 &e#e !ot abe to

2a#ti'i2ate i! the t#ia, a" the4 &e#e !ot i!/o#%e( o/ theo!goi!g e"'heat 2#o'ee(i!g". Late# %otio! /o##e'o!"i(e#atio! &a" (e!ie(.

CA #e3e#"e( the RTC #$i!g. CA 2#o!o$!'e( that RTC Ce# o/ Co$#t /aie( to i""$e i!(i3i($a !oti'e" (i#e'te( to a2e#"o!" 'ai%i!g i!te#e"t i! the $!'ai%e( baa!'e". CAhe( that the De'i"io! a!( O#(e# o/ the RTC &e#e 3oi( /o#&a!t o/ $#i"(i'tio!.

I//0()



Whethe# o# !ot the ao'ate( /$!(" %a4 be e"'heate( i!/a3o# o/ the Re2$bi'

H('d)

The#e a#e "$J'ie!t g#o$!(" to aJ#% the CA o! the

e<'$"io! o/ the /$!(" ao'ate( /o# the 2a4%e!t o/ theMa!age#K" Che' i! the e"'heat 2#o'ee(i!g".

A! o#(i!a#4 'he' #e/e#" to a bi o/ e<'ha!ge (#a&! b4 a(e2o"ito# 0(#a&e#1 o! a ba! 0(#a&ee1, #e9$e"ti!g the atte#to 2a4 a 2e#"o! !a%e( the#ei! 02a4ee1 o# to the o#(e# o/ the2a4ee o# to the bea#e#, a !a%e( "$% o/ %o!e4. Thei""$a!'e o/ the 'he' (oe" !ot o/ it"e/ o2e#ate a" a!a""ig!%e!t o/ a!4 2a#t o/ the /$!(" i! the ba! to the '#e(ito/ the (#a&e#. He#e, the ba! be'o%e" iabe o!4 a/te# ita''e2t" o# 'e#ti5e" the 'he'. A/te# the 'he' i" a''e2te( /o#2a4%e!t, the ba! &o$( the! (ebit the a%o$!t to be 2ai(to the ho(e# o/ the 'he' /#o% the a''o$!t o/ the (e2o"ito#-

(#a&e#.

The#e a#e 'he'" o/ a "2e'ia t42e 'ae( %a!age#K" o#'a"hie#K" 'he'". The"e a#e bi" o/ e<'ha!ge (#a&! b4 theba!K" %a!age# o# 'a"hie#, i! the !a%e o/ the ba!, agai!"tthe ba! it"e/. T42i'a4, a %a!age#K" o# a 'a"hie#K" 'he' i"2#o'$#e( /#o% the ba! b4 ao'ati!g a 2a#ti'$a# a%o$!t o/ /$!(" to be (ebite( /#o% the (e2o"ito#K" a''o$!t o# b4(i#e't4 2a4i!g o# (e2o"iti!g to the ba! the 3a$e o/ the'he' to be (#a&!. Si!'e the ba! i""$e" the 'he' i! it"!a%e, &ith it"e/ a" the (#a&ee, the 'he' i" (ee%e(a''e2te( i! a(3a!'e. O#(i!a#i4, the 'he' be'o%e" the

2#i%a#4 obigatio! o/ the i""$i!g ba! a!( 'o!"tit$te" it"&#itte! 2#o%i"e to 2a4 $2o! (e%a!(.

Ne3e#thee"", the %e#e i""$a!'e o/ a %a!age#K" 'he' (oe"!ot i2"o /a'to &o# a" a! a$to%ati' t#a!"/e# o/ /$!(" to thea''o$!t o/ the 2a4ee. I! 'a"e the 2#o'$#e# o/ the %a!age#K"o# 'a"hie#K" 'he' #etai!" '$"to(4 o/ the i!"t#$%e!t, (oe"!ot te!(e# it to the i!te!(e( 2a4ee, o# /ai" to %ae a!ee'ti3e (ei3e#4, &e 5!( the /oo&i!g 2#o3i"io! o!$!(ei3e#e( i!"t#$%e!t" $!(e# the Negotiabe I!"t#$%e!t"La& a22i'abe)

Se'. >. Dei3e#4; &he! ee't$a; &he! 2#e"$%e(. E3e#4'o!t#a't o! a !egotiabe i!"t#$%e!t i" i!'o%2ete a!(#e3o'abe $!ti (ei3e#4 o/ the i!"t#$%e!t /o# the 2$#2o"e o/ gi3i!g ee't the#eto. A" bet&ee! i%%e(iate 2a#tie" a!( a"#ega#(" a #e%ote 2a#t4 othe# tha! a ho(e# i! ($e 'o$#"e,the (ei3e#4, i! o#(e# to be ee't$a, %$"t be %a(e eithe#b4 o# $!(e# the a$tho#it4 o/ the 2a#t4 %ai!g, (#a&i!g,a''e2ti!g, o# i!(o#"i!g, a" the 'a"e %a4 be; a!(, i! "$'h'a"e, the (ei3e#4 %a4 be "ho&! to ha3e bee! 'o!(itio!a,o# /o# a "2e'ia 2$#2o"e o!4, a!( !ot /o# the 2$#2o"e o/ t#a!"/e##i!g the 2#o2e#t4 i! the i!"t#$%e!t. B$t &he#e thei!"t#$%e!t i" i! the ha!(" o/ a ho(e# i! ($e 'o$#"e, a 3ai((ei3e#4 the#eo/ b4 a 2a#tie" 2#io# to hi% "o a" to %aethe% iabe to hi% i" 'o!'$"i3e4 2#e"$%e(. A!( &he#e thei!"t#$%e!t i" !o o!ge# i! the 2o""e""io! o/ a 2a#t4 &ho"e"ig!at$#e a22ea#" the#eo!, a 3ai( a!( i!te!tio!a (ei3e#4b4 hi% i" 2#e"$%e( $!ti the 'o!t#a#4 i" 2#o3e(.

?etitio!e# a'!o&e(ge" that the Ma!age#K" Che' &a"2#o'$#e( b4 #e"2o!(e!t", a!( that the a%o$!t to be 2ai( /o#the 'he' &o$( be "o$#'e( /#o% the (e2o"it a''o$!t o/ Hi- T#i. Whe! Ro"%i (i( !ot a''e2t the Ma!age#K" Che' oe#e(b4 #e"2o!(e!t", the atte# #etai!e( '$"to(4 o/ thei!"t#$%e!t i!"tea( o/ 'a!'ei!g it. A" the Ma!age#K" Che'!eithe# &e!t to the ha!(" o/ Ro"%i !o# &a" it /$#the#!egotiate( to othe# 2e#"o!", the i!"t#$%e!t #e%ai!e($!(ei3e#e(. ?etitio!e# (oe" !ot (i"2$te the /a't that#e"2o!(e!t" #etai!e( '$"to(4 o/ the i!"t#$%e!t.

Si!'e the#e &a" !o (ei3e#4, 2#e"e!t%e!t o/ the 'he' to

the ba! /o# 2a4%e!t (i( !ot o''$#. A! o#(e# to (ebit thea''o$!t o/ #e"2o!(e!t" &a" !e3e# %a(e. I! /a't, 2etitio!e#'o!5#%" that the Ma!age#K" Che' &a" !e3e# !egotiate( o#2#e"e!te( /o# 2a4%e!t to it" E#%ita B#a!'h, a!( that theao'ate( /$!( i" "ti he( b4 the ba!. A" a #e"$t, thea""ig!e( /$!( i" (ee%e( to #e%ai! 2a#t o/ the a''o$!t o/ Hi- T#i, &hi'h 2#o'$#e( the Ma!age#K" Che'. The (o't#i!e thatthe (e2o"it #e2#e"e!te( b4 a %a!age#K" 'he' a$to%ati'a42a""e" to the 2a4ee i" i!a22i'abe, be'a$"e the i!"t#$%e!t atho$gh a''e2te( i! a(3a!'e #e%ai!" $!(ei3e#e(.He!'e, #e"2o!(e!t" "ho$( ha3e bee! i!/o#%e( that the



(e2o"it ha( bee! e/t i!a'ti3e /o# %o#e tha! > 4ea#", a!(that it %a4 be "$be'te( to e"'heat 2#o'ee(i!g" i/ e/t$!'ai%e(.

11. G$n<a'(< v. PCIBEUSEBIO GON>ALES v/. PCIB

G.R. N$. 14-"+) ? F(:r0ar# ", "-11

FACTS)

E$"ebio Go!ae" &a" a 'ie!t o/ ?CIB to &hi'h it g#a!te( a'#e(it i!e to Go!ae" th#o$gh C#e(it-O!-Ha!(-Loa!Ag#ee%e!t 0COHLA1. Go!ae" (#e& /#o% "ai( '#e(it i!eth#o$gh the i""$a!'e o/ 'he'.At the i!"tit$tio! o/ the i!"ta!t 'a"e, Go!ae" ha( a o#eig!C$##e!'4 De2o"it 0CD1 &ith ?CIB.

Go!ae" a!( hi" &i/e obtai!e( a oa! /o# ?+, a!("$b"e9$e!t4 "2o$"e" ?a!iio a!( Go!ae" obtai!e( t&oa((itio!a oa!" i! the a%o$!t" o/ ?>,, a!(?,, #e"2e'ti3e4. The"e th#ee oa!" a%o$!ti!g to?>,F, &e#e 'o3e#e( b4 th#ee 2#o%i""o#4 !ote". A ReaE"tate Mo#tgage 0REM1 o3e# a 2a#'e o/ a!( &a" e<e'$te(b4 Go!ae" a!( the "2o$"e" ?a!iio to "e'$#e the oa!".Notab4, the 2#o%i""o#4 !ote" "2e'i5e(, a%o!g othe#", the"oi(a#4 iabiit4 o/ Go!ae" a!( the "2o$"e" ?a!iio /o# the2a4%e!t o/ the oa!". Ho&e3e#, it &a" the "2o$"e" ?a!iio

&ho #e'ei3e( the oa! 2#o'ee(".

?CIB aege(4 'ae( the atte!tio! o/ Go!ae" b$t to !oa3ai &he! "2o$"e" ?a!iio (e/a$te( i! 2a4i!g the %o!th4i!te#e"t ($e" o/ the oa!". I! the %ea!ti%e, Go!ae" i""$e(a 'he' /o# ?+, (#a&! agai!"t the '#e(it i!e i! /a3o#o/ Re!e U!"o!. B$t "ai( 'he' &a" (i"ho!o#e( b4 ?CIB ($eto the te#%i!atio! b4 ?CIB o/ the '#e(it i!e /o# the $!2ai(2e#io(i' i!te#e"t ($e" /#o% the oa!" o/ Go!ae" a!(?a!iio. ?CIB ie&i"e /#oe the CD a''o$!t o/ Go!ae".

The#ea/te#, "e3e#a (e%a!( ette#" &e#e "e!t to Go!ae"&ith the th#eat o/ ega a'tio!. With hi" CD a''o$!t that?CIB /#oe, Go!ae" &a" /o#'e( to "o$#'e o$t a!( 2a4 the?+, he o&e( to U!"o! i! 'a"h.

Go!ae" th#$ hi" 'o$!"e, &#ote ?CIB #e%i!(i!g that it!e& &e that the a't$a bo##o&e#" &e#e the "2o$"e"?a!iio a!( he !e3e# be!e5te( /#o% the 2#o'ee(" o/ theoa!", &hi'h &e#e "e#3i'e( b4 the ?CIB a''o$!t o/ the"2o$"e" ?a!iio. The RTC /o$!( Go!ae" "oi(a#i4 iabe&ith the "2o$"e" ?a!iio o! the th#ee 2#o%i""o#4 !ote"#eati3e to the o$t"ta!(i!g REM oa!. The CA aJ#%e( theRTCK" (e'i"io!.

ISSUE)

>. WN Go!ae" i" iabe /o# the th#ee 2#o%i""o#4 !ote"'o3e#i!g ?H?>.FM oa! he %a(e &ith "2o$"e" ?a!iio

RULING)

>. 7e". Go!ae" &a" a! a''o%%o(atio! 2a#t4 o/ the oa!.A! a''o%%o(atio! 2a#t4 i" o!e &ho %eet" a the th#ee#e9$i"ite" a''o#(i!g to Se'tio! 8 o/ NegotiabeI!"t#$%e!t" La&)

>. He %$"t be a 2a#t4 to the i!"t#$%e!t, "ig!i!g a" a%ae#, (#a&e#, a''e2to#, o# i!(o#"e#

. He %$"t !ot #e'ei3e 3a$e the#e/o#

. He %$"t "ig! /o# the 2$#2o"e o/ e!(i!g hi" !a%eo# '#e(it to "o%e othe# 2e#"o!.



A! a''o%%o(atio! 2a#t4 e!(" hi" !a%e to e!abe thea''o%%o(ate( 2a#t4 to obtai! '#e(it o# #ai"e %o!e4. He#e'ei3e" !o 2a#t b$t a""$%e( iabiit4.

The #eatio! bet&ee! a! a''o%%o(atio! 2a#t4 a!( thea''o%%o(ate( 2a#t4 i" o!e o/ 2#i!'i2a a!( "$#et4—thea''o%%o(atio! 2a#t4 bei!g the "$#et4. A" "$'h, he i"(ee%e( a! o#igi!a 2#o%i""o# a!( (ebto# /#o% thebegi!!i!g, he i" 'o!"i(e#e( i! a& a" the "a%e 2a#t4 a"the (ebto# i! #eatio! to &hate3e# i" a($(ge( to$'hi!gthe obigatio! o/ the atte# "i!'e thei# iabiitie" a#ei!te#&o3e! a" to be i!"e2a#abe. Atho$gh a 'o!t#a't o/ "$#et4"hi2 i" i! e""e!'e a''e""o#4 o# 'oate#a to a 3ai(2#i!'i2a obigatio!, the "$#et4K" iabiit4 to the '#e(ito# i"i%%e(iate, 2#i%a#4 a!( ab"o$te; hei" (i#e't4 a!( e9$a4 bo$!( &ith the 2#i!'i2a. A" a!

e9$i3ae!t o/ a #eg$a# 2a#t4 to the $!(e#tai!g, a "$#et4be'o%e" iabe to the (ebt a!( ($t4 o/ the 2#i!'i2aobigo# e3e! &itho$t 2o""e""i!g a (i#e't o# 2e#"o!ai!te#e"t i! the obigatio!" !o# (oe" he #e'ei3e a!4be!e5t the#e/#o%.

1". Din$ v. L$$t

ROBERT DINO 3". ARIA LUISA 6UDALLOOT

T%( Fa8t/

A "4!(i'ate, o!e o/ &ho"e %e%be#" 2o"e( a" a! o&!e# o/

"e3e#a 2a#'e" o/ a!( "it$ate( i! Ca!$ao, La2$-a2$ Cit4,

a22#oa'he( 2etitio!e# a!( i!($'e( hi% to e!( the

g#o$2 ?,,. to be "e'$#e( b4 a #ea e"tate

%o#tgage o! the 2#o2e#tie". E!ti'e( a!( 'o!3i!'e( b4 the

"4!(i'ateK" oe#, 2etitio!e# i""$e( th#ee Met#oba! 'he'"

totai!g ?,,., o!e o/ &hi'h i" a 2o"t(ate( Che'

No. C-MA- >=>>8=-CA i! the a%o$!t o/ ?>,,.

2a4abe to 6i3e!'ia O%2o Co!"i!g a!(o# e Lobita!a.

?etitio!e# (i"'o3e#e( that the (o'$%e!t" 'o3e#e( #ight"

o3e# go3e#!%e!t 2#o2e#tie". Reaii!g he ha( bee!

(e'ei3e(, 2etitio!e# a(3i"e( Met#oba! to "to2 2a4%e!t o/ hi" 'he'". Ho&e3e#, o!4 the 2a4%e!t o/ Che' No. C-MA-

>=>>8=-CA &a" o#(e#e( "to22e(. The othe# t&o 'he'"

&e#e a#ea(4 e!'a"he( b4 the 2a4ee".

Mea!&hie, Lobita!a !egotiate( a!( i!(o#"e( Che' No. C-

MA- >=>>8=-CA to #e"2o!(e!t" i! e<'ha!ge /o# 'a"h i!

the "$% o/ ?8=F,., &hi'h #e"2o!(e!t" bo##o&e( /#o%

Met#oba! a!( 'ha#ge( agai!"t thei# '#e(it i!e. Be/o#e

#e"2o!(e!t" a''e2te( the 'he', the4 5#"t i!9$i#e( /#o% the

(#a&ee ba!, Met#oba!, i/ the "$be't 'he' &a""$J'ie!t4 /$!(e(, to &hi'h Met#oba! a!"&e#e( i! the

2o"iti3e. Ho&e3e#, &he! #e"2o!(e!t" (e2o"ite( the 'he'

&ith Met#oba!, Ceb$-Maboo B#a!'h, the "a%e &a"

(i"ho!o#e( b4 the (#a&ee ba! /o# #ea"o! *?A7MENT

STO??ED.*

Re"2o!(e!t" 5e( a 'oe'tio! "$it agai!"t 2etitio!e# a!(

Lobita!a be/o#e the t#ia 'o$#t. Re"2o!(e!t" aege( that

the4 a#e ho(e#" i! ($e 'o$#"e a!( /o# 3a$e a!( that the4

ha( !o 2#io# i!/o#%atio! 'o!'e#!i!g the t#a!"a'tio!

bet&ee! (e/e!(a!t". The t#ia 'o$#t #$e( i! /a3o# o/

#e"2o!(e!t" a!( (e'a#e( the% ($e 'o$#"e ho(e#" o/ the

"$be't 'he', "i!'e the#e &a" !o 2#i3it4 bet&ee!

#e"2o!(e!t" a!( (e/e!(a!t". The Co$#t o/ A22ea" aJ#%e(

the t#ia 'o$#tK" 5!(i!g that #e"2o!(e!t" a#e ho(e#" i! ($e

'o$#"e.

I//0(



Whethe# o# !ot the #e"2o!(e!t" &e#e ho(e#" i! ($e 'o$#"e

'o!"i(e#i!g that the 'he' i" a '#o""e( 'he', &hi'h

'o!"tit$te" "$J'ie!t &a#!i!g to the #e"2o!(e!t" to e<e#'i"e

e<t#ao#(i!a#4 (iige!'e to (ete#%i!e the tite o/ the i!(o#"e#.

T%( R0'ing

Re"2o!(e!t" a#e !ot ho(e#" i! ($e 'o$#"e.

Se'tio! + o/ the Negotiabe I!"t#$%e!t" La& (e5!e" a

ho(e# i! ($e 'o$#"e, th$")

A ho(e# i! ($e 'o$#"e i" a ho(e# &ho ha" tae! the

i!"t#$%e!t $!(e# the /oo&i!g 'o!(itio!")0a1 That it i" 'o%2ete a!( #eg$a# $2o! it"

/a'e;0b1 That he be'a%e the ho(e# o/ it be/o#e it

&a" o3e#($e, a!( &itho$t !oti'e that it ha"

bee! 2#e3io$"4 (i"ho!o#e(, i/ "$'h &a" the

/a't;0'1 That he too it i! goo( /aith a!( /o# 3a$e;0(1 That at the ti%e it &a" !egotiate( to hi%,

he ha( !o !oti'e o/ a!4 i!5#%it4 i! the

i!"t#$%e!t o# (e/e't i! the tite o/ the 2e#"o!

!egotiati!g it.

I! the 'a"e o/ a '#o""e( 'he', a" i! thi" 'a"e, the /oo&i!g2#i!'i2e" %$"t a((itio!a4 be 'o!"i(e#e() A '#o""e( 'he'

0a1 %a4 !ot be e!'a"he( b$t o!4 (e2o"ite( i! the ba!; 0b1

%a4 be !egotiate( o!4 o!'e — to o!e &ho ha" a! a''o$!t

&ith a ba!; a!( 0'1 &a#!" the ho(e# that it ha" bee! i""$e(

/o# a (e5!ite 2$#2o"e "o that the ho(e# the#eo/ %$"t

i!9$i#e i/ he ha" #e'ei3e( the 'he' 2$#"$a!t to that

2$#2o"e; othe#&i"e, he i" !ot a ho(e# i! ($e 'o$#"e.

Ba"e( o! the /o#egoi!g, #e"2o!(e!t" ha( the ($t4 to

a"'e#tai! the i!(o#"e#", i! thi" 'a"e Lobita!aK", tite to the

'he' o# the !at$#e o/ he# 2o""e""io!. Thi" #e"2o!(e!t

/aie( to (o. Re"2o!(e!t"K 3e#i5'atio! /#o% Met#oba! o!

the /$!(i!g o/ the 'he' (oe" !ot a%o$!t to (ete#%i!atio!

o/ Lobita!aK" tite to the 'he'. aii!g i! thi" #e"2e't,#e"2o!(e!t" a#e g$it4 o/ g#o"" !egige!'e a%o$!ti!g to

ega ab"e!'e o/ goo( /aith, 'o!t#a#4 to Se'tio! +0'1 o/ the

Negotiabe I!"t#$%e!t" La&. He!'e, #e"2o!(e!t" a#e !ot

(ee%e( ho(e#" i! ($e 'o$#"e o/ the "$be't 'he'.

I! &tate Investment 'ouse v$ Intermediate Appellate Court

the Co$#t a"o e<2o$!(e( o! the ee't o/ '#o""i!g a 'he',

th$")

U!(e# $"$a 2#a'ti'e, '#o""i!g a 'he' i" (o!e b42a'i!g t&o 2a#ae i!e" (iago!a4 o! the e/t to2

2o#tio! o/ the 'he'. The '#o""i!g %a4 be "2e'ia

&he#ei! bet&ee! the t&o 2a#ae i!e" i" &#itte! the

!a%e o/ a ba! o# a b$"i!e"" i!"tit$tio!, i! &hi'h

'a"e the (#a&ee "ho$( 2a4 o!4 &ith the

i!te#3e!tio! o/ that ba! o# 'o%2a!4, o# '#o""i!g

%a4 be ge!e#a &he#ei! bet&ee! t&o 2a#ae

(iago!a i!e" a#e &#itte! the &o#(" *a!( Co.* o#

!o!e at a a" i! the 'a"e at ba#, i! &hi'h 'a"e the

(#a&ee "ho$( !ot e!'a"h the "a%e b$t %e#e4

a''e2t the "a%e /o# (e2o"it.

The ee't the#e/o#e o/ '#o""i!g a 'he' #eate" to the %o(e

o/ it" 2#e"e!t%e!t /o# 2a4%e!t. U!(e# Se'tio! o/ the

Negotiabe I!"t#$%e!t" La&, 2#e"e!t%e!t /o# 2a4%e!t to be

"$J'ie!t %$"t be %a(e 0a1 b4 the ho(e#, o# b4 "o%e

2e#"o! a$tho#ie( to #e'ei3e 2a4%e!t o! hi" beha/ < < < A"

to &ho the ho(e# o# a$tho#ie( 2e#"o! &i be (e2e!(" o!

the i!"t#$'tio!" "tate( o! the /a'e o/ the 'he'.



I! thi" 'a"e, the#e i" !o 9$e"tio! that the 2a4ee" o/ the

'he', Lobita!a o# Co!"i!g, &e#e !ot the o!e" &ho

2#e"e!te( the 'he' /o# 2a4%e!t th$", the#e &a" !o 2#o2e#

2#e"e!t%e!t. A" a #e"$t, iabiit4 (i( !ot atta'h to the

(#a&e#. A''o#(i!g4, !o #ight o/ #e'o$#"e i" a3aiabe to

#e"2o!(e!t" agai!"t the (#a&e# o/ the 'he', 2etitio!e#he#ei!, "i!'e #e"2o!(e!t" a#e !ot the 2#o2e# 2a#t4

a$tho#ie( to %ae 2#e"e!t%e!t o/ the "$be't 'he'.

Ho&e3e#, the /a't that #e"2o!(e!t" a#e !ot ho(e#" i! ($e

'o$#"e (oe" !ot a$to%ati'a4 %ea! that the4 'a!!ot

#e'o3e# o! the 'he'. The Negotiabe I!"t#$%e!t" La& (oe"

!ot 2#o3i(e that a ho(e# &ho i" !ot a ho(e# i! ($e 'o$#"e

%a4 !ot i! a!4 'a"e #e'o3e# o! the i!"t#$%e!t. The o!4

(i"a(3a!tage o/ a ho(e# &ho i" !ot i! ($e 'o$#"e i" that the

!egotiabe i!"t#$%e!t i" "$be't to (e/e!"e" a" i/ it &e#e!o!-!egotiabe. A%o!g "$'h (e/e!"e" i" the ab"e!'e o#

/ai$#e o/ 'o!"i(e#atio!, &hi'h 2etitio!e# "$J'ie!t4

e"tabi"he( i! thi" 'a"e. ?etitio!e# i""$e( the "$be't 'he'

"$22o"e(4 /o# a oa! i! /a3o# o/ Co!"i!gK" g#o$2, &ho

t$#!e( o$t to be a "4!(i'ate (e/#a$(i!g g$ibe i!(i3i($a".

Si!'e the#e i" i! /a't !o 3ai( oa! to "2ea o/, the#e i" !o

'o!"i(e#atio! /o# the i""$a!'e o/ the 'he'. Co!"e9$e!t4,

2etitio!e# 'a!!ot be obige( to 2a4 the /a'e 3a$e o/ the

'he'.

Re"2o!(e!t" 'a! 'oe't /#o% the i%%e(iate i!(o#"e#, i! thi"

'a"e Lobita!a.

1. (tr$:an; v. BA Finan8(

FACTS! La%be#to Bita!ga 0Bita!ga1 obtai!e( /#o%#e"2o!(e!t BA i!a!'e Co#2o#atio! 0BA i!a!'e1 a ?8,Foa! "e'$#e( b4 hi" 'a#. The %o#tgage 'o!t#a't #e9$i#e(

Bita!ga to obtai! a! i!"$#a!'e agai!"t o"" o# (a%age b4a''i(e!t, the/t a!( 5#e o! the %o#tgage( 'a#. Bita!ga th$"ha( the %o#tgage( 'a# i!"$#e( b4 #e"2o!(e!t Maa4a!I!"$#a!'e.

The 'a# &a" "toe!. O! Bita!gaK" 'ai%, Maa4a! I!"$#a!'ei""$e( a 'he' 2a4abe to the o#(e# o/ *B.A. i!a!'eCo#2o#atio! a!( La%be#to Bita!ga* /o# ?=,+, (#a&!agai!"t Chi!a Ba!i!g Co#2o#atio! 0Chi!a Ba!1. The 'he'&a" '#o""e( &ith the !otatio! *o# De2o"it ?a4ee"K A''o$!tO!4.* Witho$t the i!(o#"e%e!t o# a$tho#it4 o/ hi" 'o-2a4eeBA i!a!'e, Bita!ga (e2o"ite( the 'he' to hi" a''o$!t &iththe A"ia!ba!, !o& %e#ge( &ith he#ei! 2etitio!e#Met#oba!, a!( "$b"e9$e!t4 &ith(#e& the e!ti#e 2#o'ee("o/ the 'he'. Bita!gaK" oa! be'a%e 2a"t ($e, b$t (e"2ite(e%a!(", he /aie( to "ette it.

BA i!a!'e e3e!t$a4 ea#!e( o/ the o"" o/ the 'a# a!( o/ Maa4a! I!"$#a!'eK" i""$a!'e o/ a '#o""e( 'he' 2a4abe toit a!( Bita!ga, a!( o/ Bita!gaK" (e2o"iti!g it i! hi" a''o$!tat A"ia!ba! a!( &ith(#a&i!g the e!ti#e 2#o'ee(" the#eo/.BA i!a!'e the#e$2o! (e%a!(e( the 2a4%e!t o/ the 3a$eo/ the 'he' /#o% A"ia!ba! b$t to !o a3ai, 2#o%2ti!g it to5e a 'o%2ai!t be/o#e the RTC /o# "$% o/ %o!e4 a!((a%age" agai!"t A"ia!ba! a!( Bita!ga, aegi!g that, i!te#aia, it i" e!tite( to the e!ti#e 2#o'ee(" o/ the 'he'.

A"ia!ba!K" 'a$"e" o/ a'tio!")

>. I! it" a!"&e# &ith 'o$!te#'ai% - aegi!g BA i!a!'e ha(*i!"tit$te( the 'o%2ai!t i! ba( /aith to 'oe#'e it i!to2a4i!g the &hoe a%o$!t o/ the CHEC: !o&i!g /$4&e that it" #ight/$ 'ai%, i/ a!4, i" agai!"t Maa4a!I!"$#a!'e.

. A '#o""-'ai% agai!"t Bita!ga - aegi!g that he/#a$($e!t4 i!($'e( it" 2e#"o!!e to #eea"e to hi% the/$ a%o$!t o/ the 'he'; a!( that o! bei!g ate#



i!/o#%e( that the e!ti#e a%o$!t o/ the 'he' (i( !otbeo!g to Bita!ga, it too "te2" to get i! to$'h &ith hi%b$t he ha( 'ha!ge( #e"i(e!'e &itho$t ea3i!g a!4/o#&a#(i!g a((#e"".

. A thi#(-2a#t4 'o%2ai!t agai!"t Maa4a! I!"$#a!'e -aegi!g that Maa4a! I!"$#a!'e &a" g#o""4 !egige!t i!i""$i!g the 'he' 2a4abe to both Bita!ga a!( BAi!a!'e a!( (ei3e#i!g it to Bita!ga &itho$t the 'o!"e!to/ BA i!a!'e.

The RTC #$e()

>. A"ia!ba! &a" !egige!t i! ao&i!g Bita!ga to (e2o"itthe 'he' to hi" a''o$!t a!( to &ith(#a& the 2#o'ee("the#eo/, &itho$t hi" 'o-2a4ee BA i!a!'e ha3i!g eithe#i!(o#"e( it o# a$tho#ie( hi% to i!(o#"e it i! it" beha/,/o$!( A"ia!ba! a!( Bita!ga oi!t4 a!( "e3e#a4 iabe

to BA i!a!'e /oo&i!g Se'tio! => o/ the NegotiabeI!"t#$%e!t" La&.

. Bita!ga &a" (e'a#e( i! (e/a$t i! A"ia!ba!K" '#o""-'ai%.

. Maa4a! I!"$#a!'e &a" !ot 2#i34 to the 'o!t#a'tbet&ee! BA i!a!'e a!( Bita!ga, a!( !oti!g the 'ai% o/ Maa4a! I!"$#a!'e that it i" it" 2oi'4 to i""$e 'he'" toboth the i!"$#e( a!( the 5!a!'i!g 'o%2a!4, he( thatMaa4a! I!"$#a!'e 'a!!ot be /a$te( /o# !egige!'e /o#i""$i!g the 'he' 2a4abe to both BA i!a!'e a!(Bita!ga. The thi#(-2a#t4 'o%2ai!t &a" (i"%i""e(.

The a22eate 'o$#t, aJ#%i!g the t#ia 'o$#tK" (e'i"io!, he(that BA i!a!'e ha" a 'a$"e o/ a'tio! agai!"t A"ia!ba!e3e! i/ the "$be't 'he' ha( !ot bee! (ei3e#e( to BAi!a!'e b4 the i""$e# it"e/. He!'e, the 2#e"e!t ?etitio! /o#Re3ie& o! Ce#tio#a#i 5e( b4 Met#oba! to &hi'h A"ia!ba!&a", a" ea#ie# "tate(, %e#ge(, /a$ti!g the a22eate 'o$#t.

ISSUES!

>. WON BA i!a!'e ha" 'a$"e o/ a'tio! agai!"t A"ia!ba!0Met#oba!1.

. WON the 2etitio!e# i" iabe /o# the /$ 3a$e o/ the'he'.

HELD!

>. 7e". AJ#%i!g the (e'i"io! o/ the CA, the SC he( thatSe'tio! => o/ the Negotiabe I!"t#$%e!t" La& 2#o3i(e")

Whe#e a! i!"t#$%e!t i" 2a4abe to the o#(e#o/ t&o o# %o#e 2a4ee" o# i!(o#"ee" &ho a#e!ot 2a#t!e#", a %$"t i!(o#"e $!e"" the o!ei!(o#"i!g ha" a$tho#it4 to i!(o#"e /o# theothe#".

Bita!ga ao!e e!(o#"e( the '#o""e( 'he', a!(2etitio!e# ao&e( the (e2o"it a!( #eea"e o/ the2#o'ee(" the#eo/, (e"2ite the ab"e!'e o/ a$tho#it4 o/ Bita!gaK" 'o-2a4ee BA i!a!'e to e!(o#"e it o! it"beha/. The 2a4%e!t o/ a! i!"t#$%e!t o3e# a %i""i!gi!(o#"e%e!t i" the e9$i3ae!t o/ 2a4%e!t o! a /o#ge(i!(o#"e%e!t o# a! $!a$tho#ie( i!(o#"e%e!t i! it"e/ i!the 'a"e o/ oi!t 2a4ee". Cea#4, 2etitio!e#, th#o$gh it"e%2o4ee, &a" !egige!t &he! it ao&e( the (e2o"it o/ the '#o""e( 'he', (e"2ite the o!e e!(o#"e%e!t o/ Bita!ga, o"te!"ib4 ig!o#i!g the /a't that the 'he' (i(

!ot, it bea#" #e2eati!g, 'a##4 the i!(o#"e%e!t o/ BAi!a!'e.

A" ha" bee! #e2eate(4 e%2ha"ie(, the ba!i!gb$"i!e"" i" i%b$e( &ith 2$bi' i!te#e"t "$'h that thehighe"t (eg#ee o/ (iige!'e a!( highe"t "ta!(a#(" o/ i!teg#it4 a!( 2e#/o#%a!'e a#e e<2e'te( o/ ba!" i!o#(e# to %ai!tai! the t#$"t a!( 'o!5(e!'e o/ the 2$bi'



i! ge!e#a i! the ba!i!g "e'to#. U!(o$bte(4, BAi!a!'e ha" a 'a$"e o/ a'tio! agai!"t 2etitio!e#.

. The 2#o3i"io!" o/ the Negotiabe I!"t#$%e!t" La& a!($!(e#4i!g $#i"2#$(e!tia tea'hi!g" o! the ba'-ette#a& 2#o3i(e (e5!iti3e $"ti5'atio! /o# 2etitio!e#K" /$iabiit4 o! the 3a$e o/ the 'he'.

To be "$#e, a 'oe'ti!g ba!, A"ia!ba! i! thi" 'a"e,&he#e a 'he' i" (e2o"ite( a!( &hi'h i!(o#"e" the 'he'$2o! 2#e"e!t%e!t &ith the (#a&ee ba!, i" a! i!(o#"e#. Thi" i" be'a$"e i! i!(o#"i!g a 'he' to the (#a&ee ba!,a 'oe'ti!g ba! "ta%2" the ba' o/ the 'he' &ith the2h#a"e *a 2#io# e!(o#"e%e!t" a!(o# a' o/ e!(o#"e%e!t g$a#a!tee(* a!(, /o# a i!te!t" a!(2$#2o"e", t#eat" the 'he' a" a !egotiabe i!"t#$%e!t,he!'e, a""$%e" the &a##a!t4 o/ a! i!(o#"e#. Witho$t

A"ia!ba!K" &a##a!t4, the (#a&ee ba! 0Chi!a Ba! i!thi" 'a"e1 &o$( !ot ha3e 2ai( the 3a$e o/ the "$be't'he'.

?etitio!e#, a" the 'oe'ti!g ba! o# a"t i!(o#"e#,ge!e#a4 "$e#" the o"" be'a$"e it ha" the ($t4 toa"'e#tai! the ge!$i!e!e"" o/ a 2#io# i!(o#"e%e!t"'o!"i(e#i!g that the a't o/ 2#e"e!ti!g the 'he' /o#2a4%e!t to the (#a&ee i" a! a""e#tio! that the 2a#t4%ai!g the 2#e"e!t%e!t ha" (o!e it" ($t4 to a"'e#tai!the ge!$i!e!e"" o/ 2#io# i!(o#"e%e!t".

A''o#(i!g4, o!e &ho '#e(it" the 2#o'ee(" o/ a 'he' to

the a''o$!t o/ the i!(o#"i!g 2a4ee i" iabe i! 'o!3e#"io!to the !o!-i!(o#"i!g 2a4ee /o# the e!ti#e a%o$!t o/ the'he'.

Mo#eo3e#, g#a!ti!g 2etitio!e#K" a22ea /o# 2a#tia iabiit4&o$( #$! 'o$!te# to the e<i"ti!g 2#i!'i2e" o! theiabiitie" o/ 2a#tie" o! !egotiabe i!"t#$%e!t",2a#ti'$a#4 o! Se'tio! F o/ the (egotiable Instruments)aw &hi'h i!"t#$'t" that oi!t 2a4ee" &ho i!(o#"e a#e

(ee%e( to indorse *ointly and severally . Re'a that&he! the %ae# (i"ho!o#" the i!"t#$%e!t, the ho(e#the#eo/ 'a! t$#! to tho"e "e'o!(a#i4 iabe — thei!(o#"e# — /o# #e'o3e#4. A!( "i!'e the a& e<2i'it4%a!(ate" a "oi(a#4 iabiit4 o! the 2a#t o/ the oi!t2a4ee" &ho i!(o#"e the i!"t#$%e!t, the ho(e# the#eo/ 0a""$%i!g the 'he' &a" /$#the# !egotiate(1 'a! t$#! toeithe# Bita!ga o# BA i!a!'e /o# /$ #e'o%2e!"e.

WHEREORE, the De'i"io! o/ the Co$#t o/ A22ea" i"AIRMED &ith MODIICATION. Co"t" agai!"t 2etitio!e#.

1. Ban; $@ A2(ri8a v. A//$8iat(d Citi<(n&/ Ban; 5 NODIGEST

The Bank is under strict liability, based on the

contract between the bank and its customer (drawer), to pay the check only to the payee or the

payee’s order. The drawer’s instructions are refected on the ace and by the terms o the check. hen thedrawee bank pays a person other than the payeenamed on the check, it does not comply with theterms o the check and violates its duty to char!e thedrawer’s account only or properly payable items.

Fa8t/) BA-i!a!'e Co#2o#atio! 0BA i!a!'e1 a!( Mie#O"et ?#e"", I!'. 0Mie#1 e!te#e( i!to a '#e(it i!e /a'iit4ag#ee%e!t &he#eb4 Mie# 'a! (i"'o$!t a!( a""ig! it" t#a(e

#e'ei3abe" &ith the BA i!a!'e. At the "a%e ti%e, U4 :iatCh$!g, Chi!g U4 Se!g, a!( U4 Ch$!g G$a! Se!g, a'ti!g /o#Mie#, e<e'$te( a Co!ti!$i!g S$#et4"hi2 Ag#ee%e!t &ithBA-i!a!'e. U!(e# the ag#ee%e!t, the4 oi!t4 a!("e3e#a4 g$a#a!tee( the /$ a!( 2#o%2t 2a4%e!t o/ a!4a!( a i!(ebte(!e"" &hi'h Mie# %a4 i!'$# &ith BA-i!a!'e.

Mie# (i"'o$!te( a!( a""ig!e( "e3e#a t#a(e #e'ei3abe" toBA-i!a!'e b4 e<e'$ti!g Dee(" o/ A""ig!%e!t i! /a3o# o/ the atte#. I! 'o!"i(e#atio! the#eo/, BA-i!a!'e i""$e( /o$#



'he'" 2a4abe to the o#(e# o/ Mie# &ith the !otatio! Zo#?a4eeK" A''o$!t O!4.[ The"e 'he'" &e#e (#a&! agai!"tBa! o/ A%e#i'a. The /o$# 'he'" &e#e (e2o"ite( b4 Chi!gU4 Se!g i! A""o'iate( Citie!" Ba! &ith hi" oi!t a''o$!t&ith U4 Ch$!g Se!g. A""o'iate( Ba! "ta%2e( the 'he'"a!( g$a#a!tee( a 2#io# e!(o#"e%e!t" a!(o# a' o/ e!(o#"e%e!t" a!( "e!t the% th#o$gh 'ea#i!g. Late#, Ba!o/ A%e#i'a a" (#a&ee ba! ho!o#e( the 'he'" a!( 2ai( the2#o'ee(" to A""o'iate( Ba! a" the 'oe'ti!g ba!. Whe!Mie# /aie( to (ei3e# to BA-i!a!'e the 2#o'ee(" o/ thea""ig!e( t#a(e #e'ei3abe", BA-i!a!'e 5e( a 'oe'tio! "$itagai!"t Mie# a!( i%2ea(e( the th#ee #e2#e"e!tati3e o/ theatte#.

Ba! o/ A%e#i'a 5e( a thi#( 2a#t4 'o%2ai!t agai!"tA""o'iate( Ba!. I! it" a!"&e# to the thi#( 2a#t4 'o%2ai!t,A""o'iate( Ba! a(%itte( ha3i!g #e'ei3e( the /o$# 'he'"/o# (e2o"it i! the oi!t a''o$!t o/ Chi!g U4 Se!g a!( U4

Ch$!g G$a! Se!g, b$t aege( that Chi!g U4 Se!g, bei!go!e o/ the 'o#2o#ate oJ'e#" o/ Mie#, &a" ($4 a$tho#ie(to a't /o# a!( o! beha/ o/ Mie#.

I//0(/) Whethe# o# !ot Ba! o/ A%e#i'a i" iabe to 2a4 BA-i!a!'e a!( &hethe# o# !ot A""o'iate( Ba! "ho$(#ei%b$#"e Ba! o/ A%e#i'a the a%o$!t o/ the /o$# 'he'".

H('d) The ba! o! &hi'h a 'he' i" (#a&!, !o&! a" the(#a&ee ba!, i" $!(e# "t#i't iabiit4, ba"e( o! the 'o!t#a'tbet&ee! the ba! a!( it" '$"to%e# 0(#a&e#1, to 2a4 the'he' o!4 to the 2a4ee o# the 2a4eeK" o#(e#. The (#a&e#K"i!"t#$'tio!" a#e #ee'te( o! the /a'e a!( b4 the te#%" o/

the 'he'. Whe! the (#a&ee ba! 2a4" a 2e#"o! othe# tha!the 2a4ee !a%e( o! the 'he', it (oe" !ot 'o%24 &ith thete#%" o/ the 'he' a!( 3ioate" it" ($t4 to 'ha#ge the(#a&e#K" a''o$!t o!4 /o# 2#o2e#4 2a4abe ite%". O! the2a#t o/ A""o'iate( Ba!, the a& i%2o"e" a ($t4 o/ (iige!'eo! the 'oe'ti!g ba! to "'#$ti!ie 'he'" (e2o"ite( &ith it/o# the 2$#2o"e o/ (ete#%i!i!g thei# ge!$i!e!e"" a!(#eg$a#it4. The 'oe'ti!g ba! bei!g 2#i%a#i4 e!gage( i!ba!i!g ho(" it"e/ o$t to the 2$bi' a" the e<2e#t a!( thea& ho(" it to a high "ta!(a#( o/ 'o!($'t. I! 2#e"e!ti!g the

'he'" /o# 'ea#i!g a!( /o# 2a4%e!t, the (e/e!(a!t'oe'ti!g ba!V %a(e a! e<2#e"" g$a#a!tee o! the 3ai(it4o/ Za 2#io# e!(o#"e%e!t".[ Th$", "ta%2e( at the ba' o/ the 'he'" a#e the (e/e!(a!tK" 'ea# &a##a!t4. A" the&a##a!t4 ha" 2#o3e! to be /a"e a!( i!a''$#ate, A""o'iate(Ba! i" iabe /o# a!4 (a%age a#i"i!g o$t o/ the /a"it4 o/ it"#e2#e"e!tatio!.

He() A ba! that #eg$a#4 2#o'e""e" 'he'" that a#e!eithe# 2a4abe to the '$"to%e# !o# ($4 i!(o#"e( b4 the2a4ee i" a22a#e!t4 g#o""4 !egige!t i! it" o2e#atio!". Thi"Co$#t ha" #e'og!ie( the $!i9$e 2$bi' i!te#e"t 2o""e""e(b4 the ba!i!g i!($"t#4 a!( the !ee( /o# the 2eo2e to ha3e/$ t#$"t a!( 'o!5(e!'e i! thei# ba!". o# thi" #ea"o!,ba!" a#e %i!(e( to t#eat thei# '$"to%e#K" a''o$!t" &ith$t%o"t 'a#e, 'o!5(e!'e, a!( ho!e"t4. I! a 'he'i!gt#a!"a'tio!, the (#a&ee ba! ha" the ($t4 to 3e#i/4 thege!$i!e!e"" o/ the "ig!at$#e o/ the (#a&e# a!( to 2a4 the

'he' "t#i't4 i! a''o#(a!'e &ith the (#a&e#K" i!"t#$'tio!",i.e., to the !a%e( 2a4ee i! the 'he'. It "ho$( 'ha#ge tothe (#a&e#K" a''o$!t" o!4 the 2a4abe" a$tho#ie( b4 theatte#. Othe#&i"e, the (#a&ee &i be 3ioati!g thei!"t#$'tio!" o/ the (#a&e# a!( it "ha be iabe /o# thea%o$!t 'ha#ge( to the (#a&e#K" a''o$!t. Ro(#ig$e 'he'"a#e 2a4abe to o#(e# "i!'e the ba! /aie( to 2#o3e that the!a%e( 2a4ee" the#ei! a#e 5'titio$".

He!'e, the 5'titio$"-2a4ee #$e &hi'h &i %ae thei!"t#$%e!t 2a4abe to bea#e# (oe" !ot a224. ?NB a''e2te(the 8 'he'" /o# (e2o"it to the ?EMSLA a''o$!t e3e!

&itho$t a!4 i!(o#"e%e!t /#o% the !a%e( 2a4ee". It bea#""t#e""i!g that o#(e# i!"t#$%e!t" 'a! o!4 be !egotiate( &itha 3ai( i!(o#"e%e!t.

1+. L0naria v. P($7'(

FACTS!

S$2(ti2( in O8t$:(r 1*44 - 2etitio!e# e!te#e( i!to a2a#t!e#"hi2 ag#ee%e!t &ith 2#i3ate 'o%2ai!a!t Ne%e"io



A#tai, i! the 'o!($'t o/ a %o!e4-e!(i!g b$"i!e"", &ith the/o#%e# a" i!($"t#ia 2a#t!e# a!( the atte# the 5!a!'e#.

?etitio!e#, &ho &a" the! a 'a"hie# o/ a# Ea"t Ba! a!( T#$"tCo%2a!4 i! Me4'a$a4a!, B$a'a!, &o$( oe# oa!" to2#o"2e'ti3e bo##o&e#" &hi'h hi" b#a!'h &a" $!abe toa''o%%o(ate.

At the "ta#t o/ the b$"i!e"", 2etitio!e# &o$( 5#"t i!/o#%A#tai o/ the a%o$!t o/ the 2#o2o"e( oa!, the! the atte#&o$( i""$e a 'he' 'ha#ge( agai!"t hi" a''o$!t i! the ba!02#o'ee(" o/ &hi'h &i go to a bo##o&e#1, &hie 2etitio!e#&o$( i! t$#! i""$e a 'he' to A#tai 'o##e"2o!(i!g to thea%o$!t e!t 2$" the ag#ee( "ha#e o/ i!te#e"t. The e!(i!gb$"i!e"" 2#og#e""e( "ati"/a'to#i4 bet&ee! the 2a#tie" a!("$J'ie!t t#$"t &a" e"tabi"he( bet&ee! the 2a#tie" thatthe4 both ag#ee( to i""$e 2#e-"ig!e( 'he'" to ea'h othe#,

/o# thei# %$t$a 'o!3e!ie!'e. The 'he'" &e#e "ig!e( b$tha( !o 2a4ee@" !a%e, (ate o# a%o$!t, a!( ea'h &a" gi3e!the a$tho#it4 to 5 the"e ba!" ba"e( o! ea'h othe#@"a(3i'e.

N$v(2:(r 1*4* - The a##a!ge%e!t e!(e( &he! A#tai &a"!o o!ge# &ii!g to 'o!ti!$e the 2a#t!e#"hi2.

O!e o/ the 'he'" i""$e( b4 2etitio!e# to A#tai &a"(i"ho!o#e( /o# i!"$J'ie!t /$!(".Whe! A#tai &e!t to2etitio!e# to a" &h4 the atte#@" 'he' ha( bo$!'e(,

2(titi$n(r t$'d Artai< t%at %( %ad :((n i27'i8at(d in a20rd(r 8a/( and t%(r(@$r( 8$0'd n$t rai/( t%( 2$n(#t$ @0nd t%( 8%(8; .

?etitio!e# #e9$e"te( A#tai !ot to (e2o"it the othe# 'he'"that &o$( be'o%e ($e a" he "ti ha( a 'a"e.

D(8(2:(r 1*4* - ?etitio!e# &a" 'ha#ge( &ith %$#(e# i!a!( (etai!e( $!ti Ma4 >88, &he! he &a" #eea"e( o! bai.He &a" e3e!t$a4 a'9$itte( i! De'e%be# >88.

a# 1**- - A#tai &e!t to the 2etitio!e# a!( (e%a!(e(2a4%e!t /o# the

%o!e4 o&e( b$t the 2etitio!e# agai! #e9$e"te( %o#e ti%eto 2#e2a#e the %o!e4 a!( 'oe't o! the oa!".

60n( 1**- - 2etitio!e# 0aege(41 &e!t to A#tai@" #e"i(e!'e&he#e both ha( a! a''o$!ti!g. It &a" "$22o"e(4 ag#ee(that 2etitio!e# o&e( A#tai ?F==,. a!( 2etitio!e#i""$e( a 'he' i! that a%o$!t, 2o"t-(ate( to De'e%be#

>88.

Whe! the 'he' be'a%e ($e a!( (e%a!(abe, A#tai(e2o"ite( it b$t the 'he' &a" (i"ho!o#e( a" the a''o$!tha( bee! 'o"e(. A (e%a!( ette# &a" "$b"e9$e!t4 "e!t to2etitio!e#, i!/o#%i!g hi% o/ the (i"ho!o# o/ hi" 'he', &ith a(e%a!( that he 2a4 the obigatio!.

A#tai a"o &e!t to 2etitio!e#@" ho$"e to get a "ette%e!ta!( 2etitio!e# 2#o2o"e( that hi" ho$"e a!( ot be gi3e! a"

"e'$#it4. B$t a/te# A#tai@" a&4e# ha( 2#e2a#e( the(o'$%e!t, 2etitio!e# #e/$"e( to "ig!. At thi" 2oi!t . A#tai5e( the i!"ta!t 'a"e.

T%( RTC D(8i/i$n!

?etitio!e# g$it4 a" 'ha#ge( a!( "e!te!'e( hi% to "$e# the2e!at4 o/ i%2#i"o!%e!t o/ o!e 0>1 4ea#, a!( to 2a4 A#taithe a%o$!t o/ ?F==,., a!( the 'o"t o/ "$it



T%( CA ar2(d t%( RTC d(8i/i$n in toto .

ISSUES!

Whethe# o# !ot the 2etitio!e# i" g$it4 o/ 3ioatio! o/ B.?.Bia!g A!( &hethe# o# !ot the ee%e!t" o/ the '#i%eha" bee! e"tabi"he(

HELD!

> 7e", the 2etitio!e# i" g$it4 &ith 3ioatio! o/ B.?.Bia!g . A!( 4e", the ee%e!t" o/ the '#i%e ha" bee!e"tabi"he( b4 the 2#o"e'$tio!.

The ee%e!t" o/ the '#i%e e"tabi"he()

> the %ai!g, (#a&i!g, a!( i""$a!'e o/ a!4 'he' toa224 /o# a''o$!t o# /o# 3a$e;

the !o&e(ge o/ the %ae#, (#a&e#, o# i""$e# that atthe ti%e o/ i""$e he (oe" !ot ha3e "$J'ie!t /$!(" i! o#'#e(it &ith the (#a&ee ba! /o# the 2a4%e!t o/ the 'he' i!/$ $2o! it" 2#e"e!t%e!t; a!( 01 the "$b"e9$e!t (i"ho!o#o/ the 'he' b4 the (#a&ee ba! /o# i!"$J'ie!'4 o/ /$!(" o#'#e(it o# (i"ho!o# /o# the "a%e #ea"o! ha( !ot the (#a&e#,&itho$t a!4 3ai( 'a$"e, o#(e#e( the ba! to "to2 2a4%e!t.

t%( 2a;ing, dra=ing, and i//0an8( $@ an# 8%(8; t$ a77'# @$r a88$0nt $r @$r va'0(

?etitio!e# %ae" %$'h o/ the a#g$%e!t that the 'he' &a"!ot *%a(e* o# *(#a&!* &ithi! the 'o!te%2atio! o/ the a&,!o# &a" it /o# a 'o!"i(e#atio!. The e3i(e!'e o! #e'o#( beie"the"e a""e#tio!".

At the o$t"et, it "ho$( be bo#!e i! %i!( that the e<'ha!geo/ the 2#e-"ig!e( 'he'" &itho$t (ate a!( a%o$!t bet&ee!the 2a#tie" ha( bee! thei# 2#a'ti'e /o# a%o"t a 4ea# b43i#t$e o/ thei# %o!e4-e!(i!g b$"i!e"". The4 ha( a$tho#it4

to 5 $2 ba!" $2o! i!/o#%atio! that a 'he' 'a! the! bei""$e(.

Se'tio! >= o/ the Negotiabe I!t#$%e!t" La&2#o3i(e") *+lan!s when may be lled$ — Whe#e thei!"t#$%e!t i" &a!ti!g i! a!4 %ate#ia 2a#ti'$a#, the2e#"o! i! 2o""e""io! the#eo/ ha" 2#i%a /a'iea$tho#it4 to 'o%2ete it b4 5i!g $2 the ba!"the#ei!. . . .*

Thi" 2#a'ti'e i" ao&e( be'a$"e o/ the 2#e"$%2tio! o/ a$tho#it4. The b$#(e! o/ 2#oo/ that the#e &a" !o a$tho#it4 o#that a$tho#it4 g#a!te( &a" e<'ee(e( i" 'a##ie( b4 the

2e#"o! &ho 9$e"tio!" "$'h a$tho#it4. A!( "$'h &a" !ot2#o3e! b4 the 2etitio!e#. Ha3i!g /aie( to 2#o3e a' o/ a$tho#it4, it 'a! be 2#e"$%e( that A#tai &a" &ithi! hi"#ight" to 5 $2 ba!" o! the 'he'.

t%( ;n$='(dg( $@ t%( 2a;(r, dra=(r, $r i//0(rt%at at t%( ti2( $@ i//0( %( d$(/ n$t %av(/08i(nt @0nd/ in $r 8r(dit =it% t%( dra=(( :an; @$r t%( 7a#2(nt $@ t%( 8%(8; in @0'' 07$n it/7r(/(nt2(nt.

?etitio!e# "tate" that %ai!g a!( i""$i!g o/ the 'he' &a"(e3oi( o/ 'o!"i(e#atio! b$t #e'o#(" "ho& that the#e &a" a!

a%o$!t ($e to A#tai, "$'h that he ha( hi" o&! 3e#"io! o/ 'o%2$tatio! &ith #e"2e't to the a%o$!t he o&e( toA#tai.Co!"i(e#atio! &a" ($4 e"tabi"he( i! A#tai@"te"ti%o!4.

It bea#" #e2eati!g that the a' o/ '#i%i!a i!te!t o! the 2a#to/ the a''$"e( i" i##ee3a!t.T%( 'a= %a/ 2ad( t%( 2(r(a8t $@ i//0ing a =$rt%'(// 8%(8; a malum prohibitum,an a8t 7r$/8ri:(d :# '(gi/'at0r( @$r :(ing d((2(d7(rni8i$0/ and ini2i8a' t$ 70:'i8 =('@ar(. I! /a't, e3e!i! 'a"e" &he#e the#e ha( bee! 2a4%e!t, th#o$gh



'o%2e!"atio! o# "o%e othe# %ea!", the#e 'o$( "ti be2#o"e'$tio! /o# 3ioatio! o/ B.?. . T%( grava2(n $@ t%($(n/( 0nd(r t%i/ 'a= i/ t%( a8t $@ i//0ing a=$rt%'(// 8%(8; $r a 8%(8; t%at i/ di/%$n$r(d 07$nit/ 7r(/(nt2(nt @$r 7a#2(nt, n$t t%( n$n7a#2(nt $@ t%( $:'igati$n.

T%( SC D(8i/i$n!

>. The 2etitio! i" DENIED a!( the De'i"io! o/ the Co$#t o/ A22ea" AIRMED &ith MODIICATION.

. ?etitio!e# i" o#(e#e( to i!(e%!i/4 Ne%e"io A#tai i! thea%o$!t o/ ?F==,. a!( the 'o"t o/ "$it, &ith egai!te#e"t /#o% (ate o/ $(i'ia (e%a!(.

. The "e!te!'e o/ i%2#i"o!%e!t o/ o!e 0>1 4ea# i" SETASIDE a!(,in lieu the#eo/, a INE i! the a%o$!t o/ ?,. i" i%2o"e( $2o! 2etitio!e#, &ith "$b"i(ia#4i%2#i"o!%e!t !ot to e<'ee( "i< %o!th" i! 'a"e o/ i!"o3e!'4 o# !o!2a4%e!t.

N$t(! Si!'e >88F, thi" Co$#t ha" he( that it &o$( be"t"e#3e the e!(" o/ '#i%i!a $"ti'e i/, i! 5<i!g the 2e!at4 tobe i%2o"e( /o# 3ioatio! o/ B.?. , the "a%e 2hio"o2h4$!(e#4i!g the I!(ete#%i!ate Se!te!'e La& beob"e#3e(,i$e$,that o/ #e(ee%i!g 3a$abe h$%a! %ate#iaa!( 2#e3e!ti!g $!!e'e""a#4 (e2#i3atio! o/ 2e#"o!a ibe#t4a!( e'o!o%i' $"e/$!e"" &ith ($e #ega#( to the 2#ote'tio!o/ the "o'ia o#(e#. Thi" 2oi'4 &a" e%bo(ie( i! S$2#e%eCo$#t A(%i!i"t#ati3e Ci#'$a# No. >-, a$tho#ii!g the!o!-i%2o"itio! o/ the 2e!at4 o/ i%2#i"o!%e!t i! B.?.

'a"e". We a"o 'a#i5e( i! A(%i!i"t#ati3e Ci#'$a# No. >->, a" e<2ai!e( i! Tan v. (nd(<, that &e a#e !ot(e'#i%i!aii!g B.?. 3ioatio!", !o# ha3e &e #e%o3e(i%2#i"o!%e!t a" a! ate#!ati3e 2e!at4. N((d'(// t$ /a#,t%( d(t(r2inati$n $@ =%(t%(r t%( 8ir802/tan8(/=arrant t%( i27$/iti$n $@ a n( a'$n( r(/t/ /$'('#07$n t%( 0dg(. S%$0'd t%( 0dg( d(8id( t%ati27ri/$n2(nt i/ t%( 2$r( a77r$7riat( 7(na't#,Ad2ini/trativ( Cir80'ar N$. 1""--- $0g%t n$t t$ :(d((2(d a %indran8(.

13. A//$8iat(d Ban; v. CA

PETITION DENIED

Fa8t/!

Me#e Re4e" i" a b$"i!e""&o%a! e!gage( i! "ei!g

#ea(4-to-&ea# 'othe". He# '$"to%e#" i""$e( 'he'" a"

2a4%e!t" /o# he# "e#3i'e".

?A7OR BAN: AMOUNT DATE

?a4e"" Soi( Ba! ?,8. a!$a#4 >8, >8F

Robi!"o!@" EBTC =,>=. De'e%be# >F, >8F>

Robi!"o!@" EBTC >,+. De'e%be# =, >8F>

Robi!"o!@" EBTC >,8F. a!$a#4 >, >8F

Re%2"o! TRB >,++. a!$a#4 8, >8F

Co#o!a RCBC ,+. De'e%be# , >8F>

The 'he'" =(r( 8r$//(d 8%(8;/ =%i8% $n t%(ir

@a8(/ ar( =ritt(n! Pa#((&/ a88$0nt $n'#. The 'he'"

!e3e# #ea'he( the ha!(" o/ Re4e". I!"tea(, a 'e#tai! Ra/ae

Sa4"o! got ho( o/ the 'he'" a!( ha( the% (e2o"ite(, a!(

"$b"e9$e!t4 e!'a"he(, /#o% hi" (e2o"it a''o$!t &ith

A""o'iate( Ba!.



Re4e" (e%a!(e( #e/$!( /#o% A""o'iate( Ba! a" "he

a3e##e( that tho"e 'he'" a#e '#o""e( 'he'" a!( "ho$(

ha3e o!4 be (e2o"ite( &ith Re4e"K a''o$!t &hi'h i" &ith

?#$(e!tia Ba!. So Re4e" 5e( a 'a"e i! the RTC /o#

#e'o3e#4 o/ the "ai( a%o$!t 2$" (a%age". RTC #$e( i!

/a3o# o/ Re4e".

The A""o'iate( Ba! a22eae( i! the CA o! the

g#o$!( that Re4e" ha( !o 'a$"e o/ a'tio! to&a#(" the% a!(

"ho$( ha3e #a! a/te# the 'o%2a!ie" &ho i""$e( the 'he'.

The CA ho&e3e#, aJ#%e( the #$i!g o/ the RTC ho(i!g that

the ba! 3ioate( the 'o%%o! 2#a'ti'e" o/ ba!"; Re4e"

ha( a 'a$"e o/ a'tio! a!(; the a't o/ Sa4"o! &a"

$!a$tho#ie(.

I//0(!

Whethe# the ba! &a" !egige!t a!( iabe /o# theo"".

H('d!

7e". A" e<2ai!e( i! the 'a"e, '#o""i!g a 'he'%ea!" that the (#a&ee ba! "ho$( !ot e!'a"h the'he' b$t %e#e4 a''e2t it /o# (e2o"it, that the 'he'%a4 be !egotiate( o!4 o!'e b4 o!e &ho ha" a! a''o$!t i!a ba!, a!( that the 'he' "e#3e" a" &a#!i!g that it &a"

i""$e( /o# a (e5!ite 2$#2o"e "o that #e'ei3e# o/ that 'he'%$"t i!9$i#e i/ he ha" #e'ei3e( the 'he' 2$#"$a!t to that2$#2o"e. The ee't, th$", #eate to the %o(e o/ it"2#e"e!t%e!t /o# 2a4%e!t, i! a''o#(a!'e &ith Se'tio! o/ the Negotiabe I!"t#$%e!t" La& &he#ei! it "tate( that /o#"$'h 2#e"e!t%e!t to be "$J'ie!t, it %$"t be %a(e b4 aho(e# o# b4 "o%e 2e#"o! a$tho#ie( to #e'ei3e o! hi"beha/.

I! #eatio! &ith the 'a"e, the ba! 2ai( the 'he'"!ot&ith"ta!(i!g that tite ha( !ot 2a""e( to the i!(o#"e#, a"

the 'he'" ha( bee! '#o""e( a!( i""$e( Z/o# 2a4eeK"a''o$!t o!4.[ It &a" (o!e "o b4 it" o&! 2e#i a!( be'a%eiabe to the 2a4ee /o# the 3a$e o/ the 'he'". The /ai$#e o/ the ba! to %ae a! i!9$i#4 a" to Sa4"o!K" a$tho#it4 &a" ab#ea'h o/ it" ($t4.

A"i(e /#o% that, e3e! i/ i!(ee( E((ie Re4e" 0h$"ba!(

o/ Me#e1 i!(o#"e( the 'he'", A""o'iate( Ba! i" "ti iabe

be'a$"e i! the 5#"t 2a'e, the h$"ba!( i" !ot a$tho#ie( to

%ae i!(#o"e%e!t". A!( e3e! i/ the e!(o#"e%e!t" &e#e

/o#ge(, a" aege(, A""o'iate( Ba! &o$( "ti be iabe to

Re4e" /o# !ot 3e#i/4i!g the e!(o#"e#K" a$tho#it4. The#e i" !o

"$b"ta!tia (ie#e!'e bet&ee! a! a't$a /o#gi!g o/ a !a%e

to a 'he' a" a! e!(o#"e%e!t b4 a 2e#"o! !ot a$tho#ie( to

%ae the "ig!at$#e a!( the aJ<i!g o/ a !a%e to a 'he' a"

a! e!(o#"e%e!t b4 a 2e#"o! !ot a$tho#ie( to e!(o#"e it.

The#e/o#e, the Co$#t #$e( that the ba! i" !egige!ta!( iabe to Re4e".

1). Far Ea/t v. CA

Fa8t/!

?etitio!e#" 5e( a 'o%2ai!t /o# the 'oe'tio! a!( 2a4%e!to/ ?=,+ #e2#e"e!ti!g the /a'e 3a$e o/ a! $!2ai( a!((i"ho!o#e( 'he' o! Ma4 8,>8F agai!"t 2#i3ate#e"2o!(e!t.

?etitio!e# aege( that o! Se2te%be# >, >8, the 2#i3ate#e"2o!(e!t" &e!t to it" oJ'e i! Ma!ia a!( a"e( the/o#%e# to e<te!( to the% a! a''o%%o(atio! oa! i! the"$% o/ ?=,+. &hi'h the4 !ee(e( i! thei# b$"i!e"", a!(&hi'h the4 2#o%i"e( to 2a4, oi!t4 a!( "e3e#a4, i! o!e%o!th ti%e at the #ate o/ >= 2e# a!!$% .The4 (ei3e#e( tothe 2etitio!e# the Chi!a Ba!i!g Co#2o#atio! Che' o! the"a%e (ate /o# ?=,+., (#a&! b4 D4 Hia! Tat, a!( "ig!e(b4 the% at the ba' o/ "ai( 'he'.



The4 a""$#e( that a/te# o!e %o!th, the "ai( 'he' &o$( be#e(ee%e( b4 the% b4 2a4i!g 'a"h i! the "a%e a%o$!t o#the "ai( 'he' 'a! be 2#e"e!te( /o# 2a4%e!t a!( the "ai(ba! &o$( ho!o# the "a%e.

?etitio!e# ag#ee( a!( a't$a4 e<te!(e( to the 2#i3ate

#e"2o!(e!t" a! a''o%%o(atio! oa!.

O! Ma#'h +, >8=, the a/o#e"ai( 'he' &a" 2#e"e!te( /o#2a4%e!t b$t "ai( 'he' bo$!'e( a!( &a" !ot 'a"he( b4"ai( ba!, /o# the #ea"o! that the '$##e!t a''o$!t o/ the(#a&e# the#eo/ ha( a#ea(4 bee! 'o"e(. U2o! (e%a!(,2#i3ate #e"2o!(e!t" /aie( a!( #e/$"e( to 2a4!ot&ith"ta!(i!g #e2eate( (e%a!(" the#e/o#e.

?#i3ate #e"2o!(e!t Ga& S$4 aege( that the 2etitio!e# ha"!o 'a$"e o/ a'tio! agai!"t hi% be'a$"e a" it a22ea#" o! thee!(o#"e%e!t at the ba' o/ CBC Che', he "ig!e( "ai(e!(o#"e%e!t /o# hi" 2#i!'i2a, the 6i'to#4 Ha#(&a#e a!( !ot/o# hi" o&! i!(i3i($a a''o$!t a!( g#a!ti!g that he a'te( i!hi" o&! 'a2a'it4 a" the e!(o#"e#, he ha" bee! &ho4(i"'ha#ge( b4 (ea4 i! 2#e"e!t%e!t o/ the 'he' /o#2a4%e!t.

?#i3ate #e"2o!(e!t D4 Hia! Tat aege( that A" /a# a" he'o$( #e%e%be#, "ai( 'he' &a" (ei3e#e( b4 hi% to Si!Chi! $at G#o'e#4 a!( !ot to the 2etitio!e#; a!( that2etitio!e# !ot bei!g a ho(e# o/ the 'he' /o# 3a$e, ha" !o

#e'o$#"e agai!"t the i%%e(iate e!(o#"e# Ga& S$4, a!(!eithe# &ith the (#a&e# the#eo/, a!( 'o!"i(e#i!g that thi"'he' i! 9$e"tio! &a" (ate( Se2te%be# >, >8 a!((e2o"ite( o!4 /o# 2a4%e!t o! Ma#'h +, >8=, thi"$!#ea"o!abe (ea4 i! 2#e"e!t%e!t &ho4 (i"'ha#ge( !oto!4 the e!(o#"e# b$t a"o the (#a&e#.

Cit4 Co$#t o/ Ma!ia #e!(e#e( it" (e'i"io! i! /a3o# o/ the2etitio!e#.Co$#t o/ i#"t I!"ta!'e o/ Ma!ia aJ#%e( the(e'i"io! o/ 'it4 'o$#t.

The a22eate 'o$#t /o$!( that the 9$e"tio!e( 'he' &a"!ot gi3e! a" 'oate#a to g$a#a!tee a oa! "e'$#e(,that it2a""e( th#o$gh othe# ha!(" be/o#e #ea'hi!g the 2etitio!e#a!( the "ai( 'he' &a" !ot 2#e"e!te( &ithi! a #ea"o!abe

ti%e a!( a/te# it" i""$a!'e, #e3e#"e( the (e'i"io!.

I""$e) &hethe# o# !ot 2#e"e!t%e!t /o# 2a4%e!t a!( !oti'eo/ (i"ho!o# o/ the 9$e"tio!e( 'he' &e#e %a(e &ithi!#ea"o!abe ti%e.

He() No.

I! o#(e# to 'ha#ge the 2e#"o!" "e'o!(a#i4 iabe, "$'h a"(#a&e# a!( e!(o#"e#", the i!"t#$%e!t %$"t be 2#e"e!te( /o#2a4%e!t o! the (ate a!( 2e#io( the#ei! %e!tio!e( i! thei!"t#$%e!t, i/ it i" 2a4abe o! a 5<e( (ate, o# &ithi! a#ea"o!abe ti%e a/te# i""$e, othe#&i"e, the (#a&e# a!(e!(o#"e#" a#e (i"'ha#ge( /#o% iabiit4.

Whe#e the i!"t#$%e!t i" !ot 2a4abe o! (e%a!(,2#e"e!t%e!t %$"t be %a(e o! the (a4 it /ag" ($e. Whe#e iti" 2a4abe o! (e%a!(, 2#e"e!t%e!t %$"t be %a(e &ithi! a#ea"o!abe ti%e a/te# i""$e, e<'e2t that i! the 'a"e o/ a bio/ e<'ha!ge, 2#e"e!t%e!t /o# 2a4%e!t &i be "$J'ie!t i/ %a(e &ithi! a #ea"o!abe ti%e a/te# the a"t !egotiatio!

the#eo/. 0Se'tio! >,NIL1.Noti'e %a4 be gi3e! a" "oo! a" the i!"t#$%e!t i"(i"ho!o#e(; a!( $!e"" (ea4 i" e<'$"e( %$"t be gi3e!&ithi! the ti%e 5<e( b4 the a& 0Se'tio! >, NIL1.

No ha#( a!( /a"t (e%a#'atio! i!e 'a! be (#a&! bet&ee!&hat %a4 be 'o!"i(e#e( a" a #ea"o!abe o# a! $!#ea"o!abeti%e, be'a$"e *#ea"o!abe ti%e* (e2e!(" $2o! the 2e'$ia#/a't" a!( 'i#'$%"ta!'e" i! ea'h 'a"e.

It i" ob3io$" i! thi" 'a"e that 2#e"e!t%e!t a!( !oti'e o/



(i"ho!o# &e#e !ot %a(e &ithi! a #ea"o!abe ti%e.

I! the i!"ta!t 'a"e, the 'he' i! 9$e"tio! &a" i""$e( o!Se2te%be# >, >8, b$t &a" 2#e"e!te( to the (#a&ee ba!o!4 o! Ma#'h +, >8=, a!( (i"ho!o#e( o! the "a%e (ate.A/te# (i"ho!o# b4 the (#a&ee ba!, a /o#%a !oti'e o/

(i"ho!o# &a" %a(e b4 the 2etitio!e# th#o$gh a ette# (ate(A2#i , >8F. U!(e# the"e 'i#'$%"ta!'e", the 2etitio!e#$!(o$bte(4 /aie( to e<e#'i"e 2#$(e!'e a!( (iige!'e o!&hat he o$ght to (o a" #e9$i#e( b4 a&. The 2etitio!e#ie&i"e /aie( to "ho& a!4 $"ti5'atio! /o# the $!#ea"o!abe(ea4.

14. Natividad G(27(/a= v. CA 5 NO DIGEST

Fa8t/!

Nati3i(a( O. Ge%2e"a& o&!" a!( o2e#ate" /o$# g#o'e#4

"to#e" a!( that "he %ai!tai!" a 'he'i!g a''o$!t &ith the

?hii22i!e Ba! o/ Co%%$!i'atio!" 0(#a&ee Ba!1 /o# ea"ie#

2a4%e!t o/ (ebt" to he# "$22ie#".

He# '$"to%a#4 2#a'ti'e &e#e a" /oo&")

Che'" &e#e 2#e2a#e( b4 he# t#$"te( booee2e#, Ai'ia

Gaa!g; Che'", togethe# &ith the i!3oi'e #e'ei2t" #ee'ti!g

he# obigatio!" &ith the "$22ie#", &e#e "$b%itte( to he# /o#"ig!at$#e; That "he "ig!" a the 'he'" &itho$t bothe#i!g to

3e#i/4 the a''$#a'4 o/ the 'he'" agai!"t the 'o##e"2o!(i!g

i!3oi'e" 'o!"i(e#i!g the t#$"t a!( 'o!5(e!'e "he #e2o"e(

$2o! he# booee2e#; I""$a!'e a!( (ei3e#4 o/ the 'he'" to

the 2a4ee" &e#e e/t to the booee2e#; that "he (i( !ot

3e#i/4 &hethe# 'he'" &e#e a't$a4 (ei3e#e( to thei#

#e"2e'ti3e 2a4ee".

Atho$gh the (#a&ee Ba! !oti5e( he# o/ a 'he'"

2#e"e!te( to a!( 2ai( b4 the ba!, Ge%2e"a& (i( !ot 3e#i/4

the 'o##e't!e"" o/ the #et$#!e( 'he'" !o# i/ the 2a4ee"

a't$a4 #e'ei3e( the 'he'" i! 2a4%e!t /o# the "$22ie" "he

#e'ei3e(.

Ge%2e"a& i""$e( F 'he'" i! /a3o# o/ "e3e#a "$22ie#" /o#

the "2a! o/ 4ea#" a!( the (#a&ee ba! (ebite( the tota

a%o$!t o/ ?>,F,.F8 agai!"t he# 'he'i!g a''o$!t

"i!'e a o/ the i""$e( 'he'" &e#e ho!o#e( b4 the (#a&ee

ba!. The"e 'he'" &e#e a '#o""e( 'he'".

It &a" o!4 a/te# the a2"e o/ %o#e tha! 4ea#" that

Ge%2e"a& /o$!( o$t abo$t the /#a$($e!t %a!i2$atio!" o/

he# booee2e#. Ge%2e"a& %a(e a &#itte! (e%a!( o!

#e"2o!(e!t (#a&ee Ba! to '#e(it he# a''o$!t &ith the%o!e4 3a$e o/ the F 'he'" totai!g ?>,F,.F8 /o#

ha3i!g bee! &#o!g/$4 'ha#ge( agai!"t he# a''o$!t.

D#a&ee Ba! #e/$"e( to g#a!t he# (e%a!(.

Abo$t o/ the 2a4ee" &ho"e !a%e" &e#e "2e'i5'a4

&#itte! o! the 'he'" te"ti5e( that the4 (i( !ot #e'ei3e !o#

e3e! "ee the "$be't 'he'" a!( that the i!(o#"e%e!t"

a22ea#i!g at the ba' o/ the 'he'" &e#e !ot thei#".

It &a" ea#!e( that a the F 'he'" &ith /o#ge( "ig!at$#e"

o/ the 2a4ee" &e#e b#o$ght to E#!e"t L. Boo!, Chie/

A''o$!ta!t o/ (#a&ee &ho, &itho$t a$tho#it4 the#e/o#,

a''e2te( the% a /o# (e2o"it to the '#e(it a!(o# i! the

a''o$!t" o/ A/#e(o 7. Ro%e#o a!( Be!ito La%.

The Regio!a T#ia Co$#t, t#ie( the 'a"e a!( #e!(e#e( a

(e'i"io! (i"%i""i!g the 'o%2ai!t a" &e a" the (#a&ee

Ba!@" 'o$!te#'ai%. O! a22ea, the Co$#t o/ A22ea" i! a



(e'i"io! aJ#%e( the (e'i"io! o/ the RTC o! t&o g#o$!(",

!a%e4 0>1 that Ge%2e"a&K" g#o"" !egige!'e i! i""$i!g the

'he'" &a" the 2#o<i%ate 'a$"e o/ the o"" a!( 01

a""$%i!g that the ba! &a" a"o !egige!t, the o"" %$"t

!e3e#thee"" be bo#!e b4 the 2a#t4 &ho"e !egige!'e &a"

the 2#o<i%ate 'a$"e o/ the o"". He!'e, a 2etitio! /o# #e3ie&&a" 5e( be/o#e SC.

I//0(! Whethe# o# !ot the 2etitio!e# 'a! #ai"e the (e/e!"e

o/ /o#ge#4, the#e/o#e the (#a&ee ba! ao!e "ha bea# the

o"".

R0'ing!

G(27(/a= 7r(8'0d(d @r$2 0/ing @$rg(r# a/ a

d(@(n/( G(27(/a=&/ n(g'ig(n8( =a/ 7r$i2at(8a0/( $@ %(r '$//.

Ha( Ge%2e"a& e<a%i!e( he# #e'o#(" %o#e 'a#e/$4, "he

&o$( ha3e !oti'e( (i"'#e2a!'ie". Ha( Ge%2e"a& bee!

%o#e 3igia!t i! goi!g o3e# he# '$##e!t a''o$!t b4 tai!g

'a#e/$ !ote o/ the (ai4 #e2o#t" %a(e b4 the (#a&ee Ba!

o! he# i""$e( 'he'", o# at ea"t %a(e #a!(o% "'#$ti!4 o/

he# 'a!'ee( 'he'" #et$#!e( b4 (#a&ee Ba! at the 'o"e

o/ ea'h %o!th, "he 'o$( ha3e ea"i4 (i"'o3e#e( the /#a$(

bei!g 2e#2et#ate( b4 Ai'ia Gaa!g, a!( 'o$( ha3e #e2o#te(

the %atte# to the (#a&ee Ba!.

The (#a&ee Ba! the! 'o$( ha3e tae! i%%e(iate "te2" to

2#e3e!t /$#the# 'o%%i""io! o/ "$'h /#a$(. Th$",

Ge%2e"a&@" !egige!'e &a" the 2#o<i%ate 'a$"e o/ he#

o"". A!( "i!'e it &a" he# !egige!'e &hi'h 'a$"e( the

(#a&ee Ba! to ho!o# the /o#ge( 'he'" o# 2#e3e!te( it

/#o% #e'o3e#i!g the a%o$!t it ha( a#ea(4 2ai( o! the

'he'", Ge%2e"a& 'a!!ot !o& 'o%2ai! "ho$( the ba!

#e/$"e to #e'#e(it he# a''o$!t &ith the a%o$!t o/ "$'h

'he'". U!(e# Se'tio! o/ the NIL, "he i" !o& 2#e'$(e(

/#o% $"i!g the /o#ge#4 to 2#e3e!t the ba!@" (ebiti!g o/ he#

a''o$!t.

Se'tio! o/ the NIL 2#o3i(e" that *&he! a "ig!at$#e i"

/o#ge( o# %a(e &itho$t the a$tho#it4 o/ the 2e#"o! &ho"e

"ig!at$#e it 2$#2o#t" to be, it i" &ho4 i!o2e#ati3e, a!( !o

#ight to #etai! the i!"t#$%e!t, o# to gi3e a (i"'ha#ge

the#e/o#, o# to e!/o#'e 2a4%e!t the#eo/ agai!"t a!4 2a#t4

the#eto, 'a! be a'9$i#e( th#o$gh o# $!(e# "$'h "ig!at$#e,

$!e"" the 2a#t4 agai!"t &ho% it i" "o$ght to e!/o#'e "$'h

#ight i" 2#e'$(e( /#o% "etti!g $2 the /o#ge#4 o# &a!t o/

a$tho#it4.*

T=$ t#7(/ $@ 8a/(/ $@ 7r$:'(2/ ari/ing @r$2 @$rg(d

ind$r/(2(nt/ $@ 8%(8;/

?#obe%" a#i"i!g /#o% /o#ge( i!(o#"e%e!t" o/ 'he'" %a4

ge!e#a4 be b#oe! i!to t&o t42e" o/ 'a"e") 0>1 &he#e

/o#ge#4 &a" a''o%2i"he( b4 a 2e#"o! !ot a""o'iate( &ith

the (#a&e# /o# e<a%2e a %ai #obbe#4V; a!( 01 &he#e the

i!(o#"e%e!t &a" /o#ge( b4 a! age!t o/ the (#a&e#. Thi"

(ie#e!'e i! "it$atio!" &o$( (ete#%i!e the ee't o/ the

(#a&e#@" !egige!'e &ith #e"2e't to /o#ge( i!(o#"e%e!t".

D0t# $@ dra=(r E(8t $@ n(g'ig(n8(

A (e2o"ito# i" $!(e# a ($t4 to "et $2 a! a''o$!ti!g "4"te%

a!( a b$"i!e"" 2#o'e($#e a" a#e #ea"o!ab4 'a'$ate( to

2#e3e!t o# #e!(e# (iJ'$t the /o#ge#4 o/ i!(o#"e%e!t",

2a#ti'$a#4 b4 the (e2o"ito#@" o&! e%2o4ee". A!( i/ the

(#a&e# 0(e2o"ito#1 ea#!" that a 'he' (#a&! b4 hi% ha"



bee! 2ai( $!(e# a /o#ge( i!(o#"e%e!t, the (#a&e# i" $!(e#

($t4 2#o%2t4 to #e2o#t "$'h /a't to the (#a&ee ba!. o#

hi" !egige!'e o# /ai$#e eithe# to (i"'o3e# o# to #e2o#t

2#o%2t4 the /a't o/ "$'h /o#ge#4 to the (#a&ee, the (#a&e#

o"e" hi" #ight agai!"t the (#a&ee &ho ha" (ebite( hi"

a''o$!t $!(e# the /o#ge( i!(o#"e%e!t. I! othe# &o#(", he i"2#e'$(e( /#o% $"i!g /o#ge#4 a" a ba"i" /o# hi" 'ai% /o#

#e'#e(iti!g o/ hi" a''o$!t.

Ban;ing :0/in(// i27r(//(d =it% 70:'i8 int(r(/t

Ut2$/t di'ig(n8( r(90ir(d

The ba!i!g b$"i!e"" i" "o i%2#e""e( &ith 2$bi' i!te#e"t

&he#e the t#$"t a!( 'o!5(e!'e o/ the 2$bi' i! ge!e#a i" o/

2a#a%o$!t i%2o#ta!'e "$'h that the a22#o2#iate "ta!(a#(

o/ (iige!'e %$"t be a high (eg#ee o/ (iige!'e, i/ !ot the

$t%o"t (iige!'e. S$#e4, (#a&ee Ba! 'a!!ot 'ai% ite<e#'i"e( "$'h a (eg#ee o/ (iige!'e that i" #e9$i#e( o/ it.

The#e i" !o &a4 that it be ao&e( to e"'a2e iabiit4 /o# "$'h

!egige!'e. It" iabiit4 a" obigo# i" !ot %e#e4 3i'a#io$" b$t

2#i%a#4 &he#ei! the (e/e!"e o/ e<e#'i"e o/ ($e (iige!'e i!

the "ee'tio! a!( "$2e#3i"io! o/ it" e%2o4ee" i" o/ !o

%o%e!t.

?#e%i"e" 'o!"i(e#e(, #e"2o!(e!t (#a&ee Ba! i" a($(ge(

iabe to "ha#e the o"" &ith the 2etitio!e# o! a 5/t4-5/t4 #atio

i! a''o#(a!'e &ith A#ti'e > &hi'h 2#o3i(e")

Re"2o!"ibiit4 a#i"i!g /#o% !egige!'e i! the

2e#/o#%a!'e o/ e3e#4 i!( o/ obigatio! i" a"o

(e%a!(abe, b$t "$'h iabiit4 %a4 be

#eg$ate( b4 the 'o$#t" a''o#(i!g to the

'i#'$%"ta!'e".

1*. Sa2/$n C%ing v. Na8da$ 5 NO DIGEST

Fa8t/!

Ni'(ao &a" 'ha#ge( ee3e! 0>>1 'o$!t" o/ 3ioatio! o/ Bata"

?a%ba!"a Bia!g 0B?1 .MTC /o$!( he# o/ g$it4 o/ "ai( oe!"e". RTC aJ#%e(.

Ni'(ao 5e( a! a22ea to the Co$#t o/ A22ea". CA #e3e#"e(the (e'i"io! a!( a'9$itte( a''$"e(.

Chi!g i" !o& a22eai!g the 'i3i a"2e't o/ the 'a"e to theS$2#e%e Co$#t.

Chi!g 3igo#o$"4 a#g$e" that !ot&ith"ta!(i!g #e"2o!(e!tNi'(aoK" a'9$itta b4 the CA, the S$2#e%e Co$#t ha" the $#i"(i'tio! a!( a$tho#it4 to #e"o3e a!( #$e o! he# 'i3iiabiit4. He a!'ho#" hi" 'o!te!tio! o! R$e >>>, Se' >B) The

'#i%i!a a'tio! /o# 3ioatio! o/ Bata" ?a%ba!"a Bg. "habe (ee%e( to !e'e""a#i4 i!'$(e the 'o##e"2o!(i!g 'i3ia'tio!, a!( !o #e"e#3atio! to 5e "$'h 'i3i a'tio! "e2a#ate4"ha be ao&e( o# #e'og!ie(. Mo#eo3e#, $!(e# the abo3e-9$ote( 2#o3i"io!, the '#i%i!a a'tio! /o# 3ioatio! o/ B? !e'e""a#i4 i!'$(e" the 'o##e"2o!(i!g 'i3i a'tio!, &hi'h i"the #e'o3e#4 o/ the a%o$!t o/ the (i"ho!o#e( 'he'#e2#e"e!ti!g the 'i3i obigatio! o/ the (#a&e# to the 2a4ee.

Ni'(aoK" (e/e!"e) Se' o/ R$e >>> — E<'e2t i! the 'a"e"2#o3i(e( /o# i! Se'tio! he#eo/, a/te# the '#i%i!a a'tio!ha" bee! 'o%%e!'e(, the 'i3i a'tio! &hi'h ha" bee!

#e"e#3e( 'a!!ot be i!"tit$te( $!ti 5!a $(g%e!t i! the'#i%i!a a'tio!. A''(g to he#, CAK" (e'i"io! i" e9$i3ae!t toa 5!(i!g that the /a't" $2o! &hi'h he# 'i3i iabiit4 %a4a#i"e (o !ot e<i"t. The i!"ta!t 2etitio!, &hi'h "ee" toe!/o#'e he# 'i3i iabiit4 ba"e( o! the ee3e! 0>>1 'he'", i"th$" aege(4 a#ea(4 ba##e( b4 the 5!a a!( e<e'$to#4(e'i"io! a'9$itti!g he#.

I//0(!>. WON Chi!g %a4 a22ea the 'i3i a"2e't o/ the 'a"e &ithi!



the #ege%e!ta#4 2e#io( 7ES. WON Ni'(ao 'i3i4 iabe NO.

H('d!

>. Chi!g i" e!tite( to a22ea the 'i3i a"2e't o/ the 'a"e&ithi! the #ege%e!ta#4 2e#io(.

ZE3e#4 2e#"o! '#i%i!a4 iabe /o# a /eo!4 i" a"o 'i3i4iabe. E<ti!'tio! o/ the 2e!a a'tio! (oe" !ot 'a##4 &ith ite<ti!'tio! o/ the 'i3i, $!e"" the e<ti!'tio! 2#o'ee(" /#o% a(e'a#atio! i! a 5!a $(g%e!t that the /a't /#o% &hi'h the'i3i %ight a#i"e (i( !ot e<i"t.

?etitio!e# Chi!g 'o##e't4 a#g$e( that he, a" the oe!(e(2a#t4, %a4 a22ea the 'i3i a"2e't o/ the 'a"e!ot&ith"ta!(i!g #e"2o!(e!t Ni'(aoK" a'9$itta b4 the CA. The 'i3i a'tio! &a" i%2ie(4 i!"tit$te( &ith the '#i%i!a

a'tio! "i!'e he (i( !ot #e"e#3e hi" #ight to i!"tit$te it"e2a#ate4 !o# (i( he i!"tit$te the 'i3i a'tio! 2#io# to the'#i%i!a a'tio!.

I/ the a''$"e( i" a'9$itte( o! #ea"o!abe (o$bt b$t the'o$#t #e!(e#" $(g%e!t o! the 'i3i a"2e't o/ the '#i%i!a'a"e, the 2#o"e'$tio! 'a!!ot a22ea /#o% the $(g%e!t o/a'9$itta a" it &o$( 2a'e the a''$"e( i! (o$be eo2a#(4.Ho&e3e#, the agg#ie3e( 2a#t4, the oe!(e( 2a#t4 o# thea''$"e( o# both %a4 a22ea /#o% the $(g%e!t o! the 'i3ia"2e't o/ the 'a"e &ithi! the 2e#io( the#e/o#.

GENERAL RULE)

Ci3i iabiit4 i" !ot e<ti!g$i"he( b4 a'9$itta)>. &he#e the a'9$itta i" ba"e( o! #ea"o!abe (o$bt;. &he#e the 'o$#t e<2#e""4 (e'a#e" that the iabiit4 o/ thea''$"e( i" !ot '#i%i!a b$t o!4 'i3i i! !at$#e; a!(. &he#e the 'i3i iabiit4 i" !ot (e#i3e( /#o% o# ba"e( o! the'#i%i!a a't o/ &hi'h the a''$"e( i" a'9$itte(.

. A 2ai!"tai!g #e3ie& o/ the 'a"e ea(" to the 'o!'$"io!that #e"2o!(e!t Ni'(aoK" a'9$itta ie&i"e 'a##ie( &ith itthe e<ti!'tio! o/ the a'tio! to e!/o#'e he# 'i3i iabiit4. The#e

i" "i%24 !o ba"i" to ho( #e"2o!(e!t Ni'(ao 'i3i4 iabe to2etitio!e# Chi!g.

CAK" a'9$itta o/ #e"2o!(e!t Ni'(ao i" !ot %e#e4 ba"e( o!#ea"o!abe (o$bt. Rathe#, it i" ba"e( o! the 5!(i!g that "he(i( !ot 'o%%it the a't 2e!aie( $!(e# B? . I! 2a#ti'$a#,

the CA /o$!( that the ?,,. 'he' &a" a "toe!'he' &hi'h &a" !e3e# i""$e( !o# (ei3e#e( b4 #e"2o!(e!tNi'(ao to 2etitio!e# Chi!g.

CA (i( !ot a($(ge he# to be 'i3i4 iabe to 2etitio!e#Chi!g. I! /a't, the CA e<2i'it4 "tate( that "he ha( a#ea(4/$4 2ai( he# obigatio!". The 5!(i!g #eati3e to the?,,. 'he' that it &a" a "toe! 'he' !e'e""a#i4ab"o3e( #e"2o!(e!t Ni'(ao o/ a!4 'i3i iabiit4 the#eo! a"&e.

U!(e# the 'i#'$%"ta!'e" &hi'h ha3e $"t bee! (i"'$""e(e!gthi4, "$'h a'9$itta 'a##ie( &ith it the e<ti!'tio! o/ he#

'i3i iabiit4 a" &e.

"-. Fir(/t$n( v. CA 5 NO DIGEST

ACTS)

oa"-A#'a E!te#2#i"e" Co%2a!4 %ai!tai!e( a "2e'iaa''o$!t &ith #e"2o!(e!t L$o! De3eo2%e!t Ba! &hi'ha$tho#ie( a!( ao&e( the /o#%e# to &ith(#a& /$!(" /#o%it" a''o$!t th#o$gh the %e(i$% o/ "2e'ia &ith(#a&a"i2". oa"-A#'a 2$#'ha"e( o! '#e(it 2#o($'t" /#o%i#e"to!e &ith a tota a%o$!t o/ ?=,F8,.. I! 2a4%e!to/ the"e 2$#'ha"e", oa"-A#'a (ei3e#e( to 2ai!ti "i<"2e'ia &ith(#a&a "i2" (#a&! $2o! the #e"2o!(e!tba!. I! t$#!, the"e &e#e (e2o"ite( b4 the 2ai!ti &ith it"'$##e!t a''o$!t &ith the Citiba!. A o/ the% &e#e ho!o#e(a!( 2ai( b4 the (e/e!(a!t. Ho&e3e#, i! a "$b"e9$e!tt#a!"a'tio! i!3o3i!g the 2a4%e!t o/ &ith(#a&a "i2" b4oa"-A#'a /o# 2$#'ha"e" o! '#e(it /#o% 2etitio!e#, t&o&ith(#a&a "i2" /o# the tota "$% o/ ?,F,8.F &e#e



(i"ho!o#e( a!( !ot 2ai( b4 #e"2o!(e!t ba! /o# the #ea"o!*NO ARRANGEMENT*.

ISSUE)

Whethe# #e"2o!(e!t ba! "ho$( be he( iabe /o# (a%age""$e#e( b4 2etitio!e#, ($e to it" aege(4 beate( !oti'e o/ !o!-2a4%e!t o/ the "$be't &ith(#a&a "i2".

RULING)

The e""e!'e o/ !egotiabiit4 &hi'h 'ha#a'te#ie" a!egotiabe 2a2e# a" a '#e(it i!"t#$%e!t ie" i! it" /#ee(o% to'i#'$ate /#ee4 a" a "$b"tit$te /o# %o!e4. The &ith(#a&a"i2" i! 9$e"tio! a'e( thi" 'ha#a'te#. A" the &ith(#a&a

"i2" i! 9$e"tio! &e#e !o!-!egotiabe, the #$e" go3e#!i!gthe gi3i!g o/ i%%e(iate !oti'e o/ (i"ho!o# o/ !egotiabei!"t#$%e!t" (o !ot a224. The #e"2o!(e!t ba! &a" $!(e#!o obigatio! to gi3e i%%e(iate !oti'e that it &o$( !ot%ae 2a4%e!t o! the "$be't &ith(#a&a "i2". Citiba!"ho$( ha3e !o&! that &ith(#a&a "i2" &e#e !ot

!egotiabe i!"t#$%e!t". It 'o$( !ot e<2e't the"e "i2" to bet#eate( a" 'he'" b4 othe# e!titie". ?a4%e!t o# !oti'e o/ (i"ho!o# /#o% #e"2o!(e!t ba! 'o$( !ot be e<2e'te(i%%e(iate4, i! 'o!t#a"t to the "it$atio! i!3o3i!g'he'". Citiba! &a" !ot bo$!( to a''e2t the &ith(#a&a"i2" a" a 3ai( %o(e o/ (e2o"it. B$t ha3i!g e##o!eo$"4a''e2te( the% a" "$'h, Citiba! a!( 2etitio!e# a"a''o$!t-ho(e# %$"t bea# the #i"" atte!(a!t to thea''e2ta!'e o/ the"e i!"t#$%e!t".

nil case digest compilation

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