G.R. No.
76788 January 22, 1990
JUANITA SALAS, petitioner, vs. HON. COURT OF APPEALS and FIRST FINANCE & LEASING
CORPORATION, respondents.
FACTS:
Records disclose that on February 6, 1980, Juanita Salas (petitioner) bought a motor vehicle from the
Violago Motor Sales Corporation (VMS) for P58,138.20 as evidenced by a promissory note. This note was
subsequently endorsed to Filinvest Finance & Leasing Corporation (private respondent) which financed
the purchase.
Petitioner defaulted in her installments beginning May 21, 1980 allegedly due to a discrepancy in the
engine and chassis numbers of the vehicle delivered to her and those indicated in the sales invoice,
certificate of registration and deed of chattel mortgage, which fact she discovered when the vehicle
figured in an accident on May 9, 1980.
This failure to pay prompted private respondent to initiate an action for a sum of money against
petitioner before the RTC.
ISSUE:
Whether or not the promissory note in question is a negotiable instrument which will bar completely all
the available defenses of the petitioner against private respondent.
RULING:
YES.
A careful study of the questioned promissory note shows that it is a negotiable instrument, having
complied with the requisites under the law as follows: [a] it is in writing and signed by the maker Juanita
Salas; [b] it contains an unconditional promise to pay the amount of P58,138.20; [c] it is payable at a
fixed or determinable future time which is "P1,614.95 monthly for 36 months due and payable on the 21
st day of each month starting March 21, 1980 thru and inclusive of Feb. 21, 1983;" [d] it is payable to
Violago Motor Sales Corporation, or order and as such, [e] the drawee is named or indicated with
certainty.
It was negotiated by indorsement in writing on the instrument itself payable to the Order of Filinvest
Finance and Leasing Corporation and it is an indorsement of the entire instrument.
Under the circumstances, there appears to be no question that Filinvest is a holder in due course, having
taken the instrument under the following conditions: [a] it is complete and regular upon its face; [b] it
became the holder thereof before it was overdue, and without notice that it had previously been
dishonored; [c] it took the same in good faith and for value; and [d] when it was negotiated to Filinvest,
the latter had no notice of any infirmity in the instrument or defect in the title of VMS Corporation.
G.R. No. 89252 May 24, 1993
RAUL SESBREÑO, petitioner, vs. HON. COURT OF APPEALS, DELTA MOTORS CORPORATION AND
PILIPINAS BANK, respondents.
FACTS:
On 9 February 1981, petitioner Raul Sesbreño made a money market placement in the amount of
P300,000.00 with the Philippine Underwriters Finance Corporation ("Philfinance"), Cebu Branch; the
placement, with a term of thirty-two (32) days, would mature on 13 March 1981, Philfinance, also on 9
February 1981, issued the following documents to petitioner: Certificate of Confirmation of Sale of a
Delta Motor Corporation Promissory Note (DMC PN No. 2731), the Certificate of Securities Delivery
Receipt indicating the sale of the Note with notation that said security was in the custody of Pilipinas
Bank, and postdated checks drawn against the Insular Bank of Asia and America for P304,533.33 payable
on 13 March 1981.
On 13 March 1981, petitioner sought to encash the postdated checks issued by Philfinance. However,
the checks were dishonored for having been drawn against insufficient funds. On 26 March 1981,
Philfinance delivered to petitioner the DCR No. 10805 issued by private respondent Pilipinas Bank
("Pilipinas").
DMC PN No. 2731 was discovered to be marked as "NON-NEGOTIABLE".
ISSUE:
Whether or not DMC PN No. 2731 marked as non-negotiable may be assigned?
RULING:
YES.
A negotiable instrument may, however, instead of being negotiated, also be assigned or transferred. The
legal consequences of negotiation as distinguished from assignment of a negotiable instrument are, of
course, different. A non-negotiable instrument may, obviously, not be negotiated; but it may be
assigned or transferred, absent an express prohibition against assignment or transfer written in the face
of the instrument: The words "not negotiable," stamped on the face of the bill of lading, did not destroy
its assignability, but the sole effect was to exempt the bill from the statutory provisions relative thereto,
and a bill, though not negotiable, may be transferred by assignment; the assignee taking subject to the
equities between the original parties.
DMC PN No. 2731, while marked "non-negotiable," was not at the same time stamped "non-
transferable" or "non-assignable." It contained no stipulation which prohibited Philfinance from
assigning or transferring, in whole or in part, that Note.
