CALTEX V. CA- Negotiable Instruments

12 SCRA 448

FACTS:

Security bank issued Certificates of Time Deposits to Angel dela Cruz.  The same were given by Dela Cruz to petitioner in connection to his purchase of fuel products of the latter.  On a later date, Dela Cruz approached the bank manager,  communicated  the  loss  of  the  certificates  and  requested  for  a reissuance.    Upon  compliance  with  some  formal  requirements,  he  was issued replacements.  Thereafter, he secured a loan from the bank where he  assigned  the  certificates  as  security.    Here  comes  the  petitioner, averred  that  the  certificates  were  not  actually  lost  but  were  given  as security for payment for fuel purchases.  The bank demanded some proof of  the  agreement  but  the  petitioner  failed  to  comply.    The  loan  matured and the time deposits were terminated and then applied to the payment of the  loan.    Petitioner  demands  the  payment  of  the  certificates  but  to  no avail.  
 

HELD:

CTDs are negotiable instruments. The documents provide that the amounts deposited  shall  be  repayable  to  the  depositor.  And  who,  according  to  the document, is the depositor? It is the "bearer." The documents do not say that the depositor is Angel de la Cruz and that the amounts deposited are
repayable specifically to him. Rather, the amounts are to  be repayable to the  bearer  of  the  documents  or,  for  that  matter,  whosoever  may  be  the bearer at the time of presentment.
 
If  it  was  really  the  intention  of  respondent  bank  to  pay  the  amount  to Angel de la Cruz only, it could have with facility so expressed that fact in clear and categorical terms in the documents, instead of having the word "BEARER" stamped on the space provided for the name of the depositor in each  CTD.  On  the  wordings  of  the  documents,  therefore,  the  amounts deposited  are  repayable  to  whoever  may  be  the  bearer  thereof.  Thus, petitioner's aforesaid witness merely declared that Angel de la Cruz is the
depositor  "insofar  as  the  bank  is  concerned,"  but  obviously  other  parties not  privy  to  the  transaction  between  them  would  not  be  in  a  position  to know that the depositor is not the bearer stated in the  CTDs. Hence, the situation  would require any party dealing with the CTDs to go behind the
plain  import  of  what  is  written  thereon  to  unravel  the  agreement  of  the parties  thereto  through  facts  aliunde.  This  need  for  resort  to  extrinsic evidence  is  what  is  sought  to  be  avoided  by  the  Negotiable  Instruments Law  and  calls  for  the  application  of  the  elementary  rule  that  the
interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity.
 
The  next  query  is  whether  petitioner  can  rightfully  recover  on  the  CTDs. This time, the answer is in the negative. The records reveal that Angel de la Cruz, whom petitioner chose not to implead in this suit for reasons of its own, delivered the CTDs amounting to P1,120,000.00 to petitioner without informing   respondent   bank   thereof   at   any   time.   Unfortunately   for petitioner,  although  the  CTDs  are  bearer  instruments,  a  valid  negotiation thereof for the true purpose and agreement between it and De la Cruz, as ultimately  ascertained,  requires  both  delivery  and  indorsement.  For, although  petitioner  seeks  to  deflect  this  fact,  the  CTDs  were  in  reality delivered to it as a security for De la Cruz' purchases of its fuel products. Any doubt as to whether the CTDs were delivered as payment for the fuel products or as a security has been dissipated and resolved in favor of the latter  by  petitioner's   own  authorized  and  responsible  representative himself.
 
In  a  letter  dated  November  26,  1982  addressed  to  respondent  Security Bank,  J.Q.  Aranas,  Jr.,  Caltex  Credit  Manager,  wrote:  ".  .  .  These certificates  of  deposit  were  negotiated  to  us  by  Mr.  Angel  dela  Cruz  to guarantee  his  purchases  of  fuel  products."  This  admission  is  conclusive
upon  petitioner,  its  protestations  notwithstanding.  Under  the  doctrine  of estoppel,  an  admission  or  representation  is  rendered  conclusive  upon  the person making it, and cannot be denied or disproved as against the person relying thereon