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    Caltex v. CA (1992)

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    Cathy Alcantara
    1. Caltex presented certificates of time deposit (CTDs) issued by Security Bank to Angel Dela Cruz as security for fuel purchases from Angel. 2. The court ruled that Caltex was not a holder in due course of the CTDs because they were delivered as collateral security for purchases rather than payment, and were not properly endorsed as required for a pledge under the Civil Code. 3. Security Bank was entitled to set off the CTDs against Angel's outstanding loan after it matured since Caltex failed to produce evidence of a valid pledge agreement granting it rights to the CTDs.

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    Caltex v. CA (1992)

    Uploaded by

    Cathy Alcantara
    52 views1 page
    1. Caltex presented certificates of time deposit (CTDs) issued by Security Bank to Angel Dela Cruz as security for fuel purchases from Angel. 2. The court ruled that Caltex was not a holder in due course of the CTDs because they were delivered as collateral security for purchases rather than payment, and were not properly endorsed as required for a pledge under the Civil Code. 3. Security Bank was entitled to set off the CTDs against Angel's outstanding loan after it matured since Caltex failed to produce evidence of a valid pledge agreement granting it rights to the CTDs.

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    Case digest - Banking; Negotiable Instruments Law

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    1. Caltex presented certificates of time deposit (CTDs) issued by Security Bank to Angel Dela Cruz as security for fuel purchases from Angel. 2. The court ruled that Caltex was not a holder in due course of the CTDs because they were delivered as collateral security for purchases rather than payment, and were not properly endorsed as required for a pledge under the Civil Code. 3. Security Bank was entitled to set off the CTDs against Angel's outstanding loan after it matured since Caltex failed to produce evidence of a valid pledge agreement granting it rights to the CTDs.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    52 views1 page

    Caltex v. CA (1992)

    Uploaded by

    Cathy Alcantara
    1. Caltex presented certificates of time deposit (CTDs) issued by Security Bank to Angel Dela Cruz as security for fuel purchases from Angel. 2. The court ruled that Caltex was not a holder in due course of the CTDs because they were delivered as collateral security for purchases rather than payment, and were not properly endorsed as required for a pledge under the Civil Code. 3. Security Bank was entitled to set off the CTDs against Angel's outstanding loan after it matured since Caltex failed to produce evidence of a valid pledge agreement granting it rights to the CTDs.

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    CALTEX V. CA AND SECURITY BANK (1992) | J. Regalado e.

    Instrument addressed to a drawee, he must be named or otherwise


    indicated with reasonable certainty
    FACTS: Negotiability determined from the writing, from the face of the
    1. Defendant Security Bank through its Sucat Branch issued 280 certificates instrument. The documents provide that the amounts deposited shall
    of time deposit (CTD) in favor of one Angel Dela Cruz, who deposited an be repayable to the depositor and according to the document, the
    aggregate amount of 1,120,000 depositor is the bearer thus, the amounts are to be repayable to
    2. Angel del Cruz delivered the CTDs to Caltex for his purchase of fuel the bearer at the time of presentment.
    products If it was really the intention of the bank to pay the amount to Angel
    3. Sometime in March 1982, Angel dela Cruz informed the Bank Branch Dela Cruz only, then it could have so expressed that fact in clear and
    Manager that he lost all the CTDs; he executed and gave the bank an categorical terms
    Affidavit of Loss in order to receive replacement CTDs
    4. In the same month, Angel negotiated and obtained a loan from the same 2. W/N Caltex is a holder in due course of the CTDs NO
    bank in the amount of 875,000. He executed a notarized Deed of Although the CTDs are bearer instruments, a valid negotiation thereof
    Assignment of Time Deposit which stated that he surrenders to the bank for the true purpose and agreement between Caltex and Angel,
    full control of the time deposits from and after date of assignment with requires both delivery and indorsement. The CTDs were in reality
    authorization to pre-terminate, set-off and apply the deposits to the delivered to Dela Cruz as a security for the purchase of fuel products,
    payment of whatever amounts may be due on the loan upon its maturity and not as payment guarantee his purchases
    5. In November 1982, Caltex Phils through its Credit Manager, presented the If they were delivered as payment, then Caltex could have easily just
    CTDs it received from Angel to Security Bank, alleging that these were said so.
    delivered to Caltex as security for purchases made to them, and expressing Security Bnak actually requested for several documents to show
    its intent to preterminate said CTDs payment, but the requested receipts opposed the motion to have
    6. Security Bank requested Caltex to furnish it with a copy of the guarantee these produced in court.
    agreement with Angel Dela Cruz, but Caltex did not submit the requested There was no negotiation in the sense of a transfer of legal title of the
    documents, so SB rejected its demand & claim CTDs in petitioners name, it was expressed that the disposition was
    7. In April 1983, the loan of Angel dela Cruz with the bank matured, and 4 only meant to be a security.
    months later, SB set-off and applied the time deposits to the payment of As such holder of collateral security, Caltex would be in the character
    the matured loan of a pledgee. The pertinent law applicable now would be the
    8. Plaintiff Caltex filed the complaint that the bank be ordered to pay the value provisions on pledge:
    of the CTD "Art. 2095. Incorporeal rights, evidenced by negotiable
    9. RTC: dismissed the complaint; CA: affirmed the dismissal instruments, . . . may also be pledged. The instrument proving
    the right pledged shall be delivered to the creditor, and if
    ISSUES/RATIO: negotiable, must be indorsed."
    1. W/N the CTDs are negotiable YES "Art. 2096. A pledge shall not take effect against third persons if
    CTDs meet the requirements set by the Negotiable Instruments Law a description of the thing pledged and the date of the pledge do
    not appear in a public instrument."
    for an instrument to become negotiable:
    The CTDs here were only delivered and not indorsed. Caltex also failed
    a. Must be in writing and signed by the maker or drawer
    to produce any document evidencing any contract of pledge or
    b. Contain an unconditional promise or order to pay a sum certain in
    guarantee agreement between it and Angel Dela Cruz, thus the mere
    money
    delivery of the CTDs did not legally vest in petition any right effective
    c. Must be payable on demand, or at a fixed or determinable future
    against Security Bank. This is in contrast with the assignement of the
    time
    CTDs made by angel in favor of the bank, since this was embodied in a
    d. Must be payable to order or bearer
    public instrument.

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