Case Digest (G.R. No. L-2861)
Facts:
Enrique P. Montinola v. The Philippine National Bank et al., G.R. No. L-2861, February 26, 1951, the Supreme Court En Banc, Montemayor, J., writing for the Court. Plaintiff-appellant Enrique P. Montinola sued the Philippine National Bank and the Provincial Treasurer of Misamis Oriental in the Court of First Instance of Manila to recover P100,000 represented by Check No. 1382 dated May 2, 1942, which had been issued by Provincial Treasurer Ubaldo D. Laya to Mariano V. Ramos and which Montinola claimed had been indorsed to him.The undisputed background is that in April–May 1942 Ramos, then assistant agent to Provincial Treasurer Laya and later disbursing officer of a USAFFE division, received P400,000 in emergency notes and a P100,000 check (No. 1382) from Laya as part of an advance for military expenditures. Ramos could not negotiate the check because of the war and subsequent Japanese occupation; he was a prisoner of war until February 1943 and resumed civilian status thereafter. Late December 1944 or early January 1945, Ramos allegedly transferred the check to Montinola; the parties sharply disagreed about the terms and extent of that transfer.
Montinola testified he bought the entire P100,000 check for P850,000 (Japanese military notes and medicines) and produced the physical check at trial. Ramos and other witnesses testified that the transfer was only for P30,000 of the check’s face value in consideration of P90,000 (Japanese notes), half of which remained unpaid. The back of the mutilated check then on record bore a large typewritten/rubber-stamped indorsement in favor of Montinola, but Ramos testified the original writing he made limited transfer to P30,000; the alleged original restricted indorsement was later obliterated and the present indorsement substituted.
The check itself was produced in a badly mutilated, blotted, burned and pasted condition; Montinola explained he mutilated it to prevent Ramos from reclaiming it after Ramos allegedly threatened him. The face of the check, as produced, also bore the added words "(Agent, Phil. National Bank)" under Laya’s signature, which Laya and Ramos both testified were not on the check when it was issued; the trial court found those words had been added later.
The Court of First Instance, after weighing the testimony and examining the condition of the instrument, concluded that Montinola acquired only an assignment of P30,000 (not a full indorsement or holder in due course), that he had not paid the full consideration, that the original limited writing by Ramos had been obliterated and a different indorsement substituted, and that the words making the bank appear as drawer were added after issuance. The trial court dismissed Montinola’s complaint with costs. Because the amount in controversy exceeded P50,000, Montinola appealed directly to the Supreme Court.
The ...(Subscriber-Only)
Issues:
- Was the Philippine National Bank liable as drawer of Check No. 1382 or was the addition of the words "Agent, Phil. National Bank" a material alteration discharging the instrument?
- Was Montinola an indorsee, a holder in due course, or merely an assignee entitled to collect the full P100,000?
- Could Ramos lawfully negotiate the check in his personal capacity, or did the transfer constitute a breach...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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