1) Sima Wei executed a promissory note to pay a bank but then issued two crossed checks to settle the account that were not delivered to the bank.
2) For a negotiable instrument to be valid, it must be delivered to the payee. Without delivery, there is no liability on the instrument.
3) While the bank cannot claim liability for the undelivered checks, it does have a right of action against Sima Wei for the balance due on the original promissory note.
1) Sima Wei executed a promissory note to pay a bank but then issued two crossed checks to settle the account that were not delivered to the bank.
2) For a negotiable instrument to be valid, it must be delivered to the payee. Without delivery, there is no liability on the instrument.
3) While the bank cannot claim liability for the undelivered checks, it does have a right of action against Sima Wei for the balance due on the original promissory note.
1) Sima Wei executed a promissory note to pay a bank but then issued two crossed checks to settle the account that were not delivered to the bank.
2) For a negotiable instrument to be valid, it must be delivered to the payee. Without delivery, there is no liability on the instrument.
3) While the bank cannot claim liability for the undelivered checks, it does have a right of action against Sima Wei for the balance due on the original promissory note.
1) Sima Wei executed a promissory note to pay a bank but then issued two crossed checks to settle the account that were not delivered to the bank.
2) For a negotiable instrument to be valid, it must be delivered to the payee. Without delivery, there is no liability on the instrument.
3) While the bank cannot claim liability for the undelivered checks, it does have a right of action against Sima Wei for the balance due on the original promissory note.
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A negotiable instrument of which a check is, is not only a written amount of P1,820,000.00.
0. Sima Wei subsequently issued two crossed
evidence of a contract right but is also a species of property. checks payable to petitioner Bank drawn against China Banking Corporation in full settlement of the drawer's account evidenced by The payee of a negotiable instrument acquires no interest with the promissory note. These two checks however were not delivered respect thereto until its delivery to him. to the petitioner-payee or to any of its authorized representatives but instead came into the possession of respondent Lee Kian Huat, who The delivery of checks in payment of an obligation does not deposited the checks without the petitioner-payee's indorsement to the constitute payment unless they are cashed or their value is account of respondent Plastic Corporation with Producers Bank. impaired through the fault of the creditor. Inspite of the fact that the checks were crossed and payable to petitioner Bank and bore no indorsement of the latter, the Branch Manager of Producers Bank authorized the acceptance of the checks for deposit and credited them to the account of said Plastic Development Bank vs. Sima Wei Corporation. DEVELOPMENT BANK OF RIZAL, plaintiff-petitioner, ISSUE/s of the CASE vs. SIMA WEI and/or LEE KIAN HUAT, MARY CHENG UY, Whether petitioner Bank has a cause of action against Sima Wei for SAMSON TUNG, ASIAN INDUSTRIAL PLASTIC the undelivered checks. CORPORATION and PRODUCERS BANK OF THE PHILIPPINES, defendants-respondents. ACTION OF THE COURT G.R. No. 85419 RTC: Motion to dismiss - Granted March 9, 1993 CA: Dismissed Ponente: CAMPOS, JR., J.: SC: affirmed
COURT RATIONALE ON THE ABOVE CASE
NATURE OF CASE PETITION for review by certiorari of the decision of the Court of No. A negotiable instrument must be delivered to the payee in order Appeals. to evidence its existence as a binding contract. Section 16 of the NIL FACTS provides that every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of Respondent Sima Wei executed and delivered to petitioner Bank a giving effect thereto. Thus, the payee of a negotiable instrument promissory note engaging to pay the petitioner Bank or order the acquires no interest with respect thereto until its delivery to him. Without the initial delivery of the instrument from the drawer to the payee, there can be no liability on the instrument. Petitioner however has a right of action against Sima Wei for the balance due on the promissory note.
SUPREME COURT RULING
In the light of the foregoing, the judgment of the Court of Appeals
dismissing the petitioner's complaint is AFFIRMED insofar as the second cause of action is concerned. On the first cause of action, the case is REMANDED to the trial court for a trial on the merits, consistent with this decision, in order to determine whether respondent Sima Wei is liable to the Development Bank of Rizal for any amount under the promissory note allegedly signed by her.
Until Its Delivery Which Must Be Intended To Give Effect To The Instrument To Him. Without The Initial Delivery, There Can Be No Liability On The Instrument."