“When the time is right, I, the Lord, will make it happen.
”
ENRIQUE P. MONTINOLA, plaintiff-appellant,
vs.
THE PHILIPPINE NATIONAL BANK, ET AL., defendants-appellees.
G.R. No. L-2861; February 26, 1951
Facts:
In 1942, Mariano Ramos, as disbursing officer of an army division of United States
Armed Forces in the Far East (USAFFE) and based in Misamis Oriental, procured
cash advances in the amount of Php800,000 with the Provincial Treasurer (PT) of
Lanao for the use of USAFFE in Cagayan de Misamis. PT-Lanao did not have that
amount in cash so he gave Ramos P300,000 in emergency notes and a check for
P500,000. Thereafter, Ramos presented the check to their PT in their province for
encashment. PT-Misamis did not have enough cash to cover the check so he gave
Ramos P400,000 in emergency notes and a check for P100,000 drawn on the PNB
as he had previously deposited P500,000 emergency notes in the PNB branch in
Cebu and thus he expected to have the check issued by him cashed in Cebu against
said deposit. Ramos was unable to encash said check for he was captured by the
Japanese and later made a prisoner of war. After his release, sometime in 1945,
Ramos allegedly indorsed the check to herein plaintiff-appellant. According to
Montinola’s version of the circumstances that roused the present controversy,
Ramos, who then was no longer connected with the USAFFE but already a civilian
who needed the money only for himself and his family, offered to sell the check to
him. But as stated by Ramos, he and Montinola agreed to the sale of said check
and the agreement regarding the transfer of the check was that he was selling only
P30,000 of it and for such reason, at the back of the document he wrote in
longhand: Pay to the order of Enrique P. Montinola P30,000 only. The balance to
be deposited in the Philippine National Bank to the credit of M. V. Ramos. Ramos
further said that in exchange for this assignment of P30,000, Montinola would pay
him P90,000 in Japanese military notes but that the latter gave him only two
checks of P20,000 and P25,000, leaving a balance unpaid of P45,000. The writing
made at the back of the check was, however, mysteriously obliterated and in its
place, a supposed indorsement appearing on the back of the check was made for
the whole amount of the check.
Issue: WON the check was legally negotiated within the meaning of the NIL in
view of the fact that the instrument was indorsed for a lesser amount?
Ruling: No.
Section 32 of the NIL provides that "the indorsement must be an indorsement of
the entire instrument. An indorsement which purports to transfer to the indorsee a
part only of the amount payable (as in this case) does not operate as a negotiation
of the instrument." As to what was really written at the back of the check which
Montinola claims to be a full indorsement of the check, the Court agreed with trial
court that the original writing of Ramos on the back of the check was to the effect
that he was assigning only P30,000 of the value of the document and that he was
instructing the bank to deposit to his credit the balance. Montinola may therefore
not be regarded as an indorsee. At most he may be regarded as a mere assignee of
the P30,000 sold to him by Ramos, in which case, as such assignee, he is subject to
all defenses available to the drawer Provincial Treasurer of Misamis Oriental and
against Ramos.
Doctrine:
