Case Digest (G.R. No. L-33912)
Facts:
In Caltex (Philippines), Inc. v. Court of Appeals and Security Bank and Trust Company, G.R. No. 97753, decided on August 10, 1992 under the 1987 Constitution, Security Bank’s Sucat branch issued 280 Certificates of Time Deposit (CTDs) bearing serial nos. 70147 to 90272 for an aggregate P1,120,000.00 in favor of Angel dela Cruz, who had deposited the amount in early March 1982. Shortly thereafter, Mr. dela Cruz delivered the CTDs to Caltex (Philippines), Inc. as collateral security for fuel purchases. Upon losing the original CTDs, he executed a notarized affidavit of loss and obtained replacement CTDs from Security Bank. On March 25, 1982, Mr. dela Cruz secured a P875,000.00 loan from the bank and executed a notarized Deed of Assignment of Time Deposit authorizing the bank to set off the CTDs against any due loan obligation. In November 1982, Caltex presented the replacement CTDs to the bank, claimed status as bearer, and demanded pre-termination and payment. The bank declined, ...Case Digest (G.R. No. L-33912)
Facts:
- Issuance and delivery of CTDs
- On various dates in February and March 1982, Security Bank’s Sucat Branch issued 280 certificates of time deposit (CTDs) in favor of Angel dela Cruz, aggregating P 1,120,000 (with serial numbers and amounts duly recorded).
- Angel dela Cruz delivered the original CTDs to petitioner Caltex (Philippines), Inc. as collateral security for his purchase of fuel products.
- Loss and replacement of CTDs
- In March 1982, Angel dela Cruz reported to the bank that he had lost all 280 CTDs and executed a notarized Affidavit of Loss on March 18, 1982.
- On the basis of that affidavit, the bank issued 280 replacement CTDs bearing new serial numbers.
- Loan and assignment
- On March 25, 1982, Angel dela Cruz obtained a loan of P 875,000 from the bank.
- He executed and delivered a notarized Deed of Assignment of Time Deposit, authorizing the bank to pre-terminate, set off, and apply the CTDs against his loan upon maturity.
- Presentation and demand by Caltex
- In November 1982, Caltex’s Credit Manager presented the replacement CTDs to the bank, claimed possession as bearer and formally notified the bank of its intent to pre-terminate them.
- The bank requested copies of the guarantee agreement and details of the underlying obligation; Caltex did not furnish them.
- By letter dated February 7, 1983, the bank refused Caltex’s demand. When Angel’s loan matured in April 1983, the bank set off and applied the CTDs on August 5, 1983.
- Litigation history
- Caltex filed a complaint in the RTC, Manila, Branch XLII, praying for payment of P 1,120,000 plus interest, moral and exemplary damages, and attorney’s fees.
- The RTC dismissed the complaint. On appeal, the Court of Appeals affirmed with modifications. Caltex then filed this petition for review on certiorari before the Supreme Court.
Issues:
- Whether the CTDs in question are negotiable instruments.
- Whether Caltex became a holder in due course of the CTDs.
- Whether Caltex had a right to pre-terminate and receive the proceeds of the CTDs.
- Whether Security Bank could lawfully apply (set off) the CTDs under the assignment executed by Angel dela Cruz.
- Whether Caltex is entitled to damages, attorney’s fees, and litigation expenses.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)