Case Digest (G.R. No. 101163)
Facts:
In State Investment House, Inc. v. Court of Appeals and Nora B. Moulic, G.R. No. 101163, decided January 11, 1993, private respondent Nora B. Moulic issued to Corazon Victoriano two post-dated Equitable Banking Corporation checks in the amount of Fifty Thousand Pesos (₱50,000.00) each, dated August 30 and September 30, 1979, as security for jewelry consigned for sale on commission. When the jewelry remained unsold, Moulic returned the items before the checks’ maturity but could not retrieve the instruments because they had already been negotiated to petitioner State Investment House, Inc. (STATE). Prior to maturity, Moulic withdrew her funds from the drawee bank. Upon presentment, the checks were dishonored for insufficiency of funds. STATE allegedly notified Moulic of dishonor on December 20, 1979, and demanded cash payment, though Moulic denied receiving any notice. On October 6, 1983, STATE filed suit in the Regional Trial Court (RTC) to recover the checks’ face value plus atCase Digest (G.R. No. 101163)
Facts:
- Issuance and negotiation of checks
- Nora B. Moulic issued two post-dated Equitable Banking Corporation checks (No. 30089658 and No. 30089660) for ₱50,000.00 each, dated August 30 and September 30, 1979, to Corazon Victoriano as security for jewelry to be sold on commission.
- Before maturity, Victoriano indorsed and negotiated the checks to State Investment House, Inc. (STATE). Moulic, having failed to sell the jewelry, returned it to Victoriano but could not retrieve the checks, which had already been negotiated.
- Dishonor and initial proceedings
- Moulic withdrew her bank funds, causing the checks to be dishonored for insufficiency of funds. STATE alleges it notified Moulic of dishonor on December 20, 1979; Moulic denies any notice.
- On October 6, 1983, STATE sued Moulic for ₱100,000.00 (face value), plus attorney’s fees and costs. Moulic answered that she incurred no obligation, and filed a third-party complaint against Victoriano, who assumed responsibility.
- On May 26, 1988, the trial court dismissed both the complaint and third-party complaint, and awarded Moulic ₱3,000.00 as attorney’s fees. The Court of Appeals affirmed, finding notice of dishonor late and that the checks should not have been presented since they were only security.
Issues:
- Whether the drawer of checks issued merely as security is liable to a holder in due course upon dishonor.
- Whether a mortgagee who forecloses extrajudicially may recover the deficiency balance of the obligation.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)