Stelco Marketing Corp. vs. Court of Appeals [GR 96160, 17 une 199!" Secon# $ivision, %arvasa &'( Facts: Stelco Marketing Marketing Corporation Corporation is engage# in t)e t)e #istri*ution #istri*ution an# sale to t)e
pu*lic of structural steel *ars. +t sol# to R- Construction, +nc. uantities of steel *ars of various si/es an# rolls rolls of G.+. ire. )e aggregate aggregate price for t)e purc)ases purc)ases as 21!6,349.61. Alt)oug) t)e correspon#ing correspon#ing invoices issue# *5 S-C stipulate# t)at R- oul# pa5 8C$8 &cas) on #eliver5', t)e latter a#e no pa5ents for t)e construction aterials t)us or#ere# an# #elivere# #espite insistent #ean#s for pa5ent *5 t)e forer. n April :, 1931, R- gave to Arstrong +n#ustries, #escri*e# *5 S-C as its sister corporation corporation an# anufacturing anufacturing ar, a c)eck #ran against against Metro*ank in t)e aount of 21!6,1!9.36, nu*ere# 764;30 an# #ate# : April 1931. )at c)eck as a copan5 copan5 c)eck c)eck of anot)er anot)er corporation corporation,, Steelel# Steelel# Corporation Corporation , signe# signe# *5 its 2resi#ent, 2eter Rafael -ison, an# its nanc >nancial ial assist assistanc ance, e, an# t)e latter latter )a# agree# to give -i a c)eck onl5 *5 a5 of accoo#ation, 8onl5 as guarant5 *ut not to pa5 for an5t)ing.8 ?)en t)e latter #eposite# t)e c)eck at its *ank, it as #is)onore# *ecause of insu@cienc5 fun#s. ?)en so #eposite#, t)e c)eck *ore to &!' in#orseents, t)at of R- Construction, Construction, folloe# *5 t)at of Arstrong Arstrong +n#ustries. n account of t)e #is)onor of Metro*ank C)eck 764;30, an# on coplaint of Arstrong +n#ustries , Rafael -ison an# Arteio orres ere c)arge# in t)e Regional rial Court of Manila it) a violation of atas 2a*ansa ilang !!. )e5 ere acuitte# in a #ecision ren#ere# on t)e groun# t)at t)e c)eck in uestion as not issue# *5 t)e #raer to appl5 appl5 on account account for value, it *eing erel5 erel5 for accoo#atio accoo#ation n purposes. purposes. )at Bu#gent )oever con#itione# t)e acuittal it) t)e pronounceent pronounceent t)at 8t)is is not )oever to release Steelel# Corporation fro its lia*ilit5 un#er Sec. !9 of t)e %egotia*le +nstruents -a for )aving issue# it for t)e accoo#ation of Roeo -i.8 leven leven ont)s later later an# soe : 5ears after after issuance issuance of t)e c)eck , S-C >le# it) t)e Regional rial Court of Caloocan Cit5 a civil coplaint against *ot) R- an# S-?-$ for t)e recover5 of t)e value of t)e steel *ars an# ire sol# to R- in t)e aount of 21!6,1!9.36, plus interest an# attorne5s fees. R- coul# no longer *e locate# locate# an# coul# coul# not *e serve# serve# it) it) suons. suons. +t never never appeare appeare#. #. nl5 S-?-$ >le# an anser. )e Bu#gent sentence# Steelel# to pa5 to Stelco t)e aount of 21!6,1!9.36 it) legal rate of interest an# for attorne5s fees. S-Cs otion for reconsi#eration as #enie# *5 t)e Appellate ri*unal. S-C appeale#. Issue [1]: ?)et)er t)e fourt) fourt) con#ition, i.e. i.e. as to notice, for a )ol#er )ol#er in #ue course course
is applica*le to an accoo#ation part5.
Held [1]: A )ol#er in #ue course, sa5s t)e la, 8is a )ol#er )o )as taken t)e
instruent un#er t)e folloing con#itions( &a' )at it is coplete an# regular upon its faceD &*' )at )e *ecae t)e )ol#er of it *efore it as over#ue, an# it)out notice t)at it )a# *een previousl5 #is)onore#, if suc) as t)e factD &c' )at )e took it in goo# fait) an# for valueD &#' )at at t)e tie it as negotiate# to )i, )e )a# no notice of an5 in>rit5 in t)e instruent or #efect in t)e title of t)e persons negotiating it.8 As regar#s an accoo#ation part5 &suc) as S-?-$', t)e fourt) con#ition, i.e., lack of notice of an5 in>rit5 in t)e instruent or #efect in title of t)e persons negotiating it, )as no application. )is is *ecause Section !9 of t)e la a*ove uote# preserves t)e rig)t of recourse of a 8)ol#er for value8 against t)e accoo#ation part5 notit)stan#ing t)at 8suc) )ol#er, at t)e tie of taking t)e instruent, kne )i to *e onl5 an accoo#ation part5.8 Issue [2]: ?)et)er S-C
*ecae a )ol#er in #ue course of C)eck 764;30, a *earer instruent it)in t)e conteplation of t)e %egotia*le +nstruents -a. Held [2]: %. )ere is no evi#ence t)at S-Cs possession of C)eck *ack to an5
tie *efore t)e instruents presentent an# #is)onor. )ere is no evi#ence )atsoever t)at t)e c)eck as ever given to it, or in#orse# to it in an5 anner or for in pa5ent of an o*ligation or as securit5 for an o*ligation, or for an5 ot)er purpose *efore it as presente# for pa5ent. n t)e contrar5, S-C never *ecae a )ol#er for value an# t)at no)ere in t)e c)eck itself #oes t)e nae of Stelco Marketing appear as pa5ee, in#orsee or #epositor t)ereof. ?)at t)e recor# s)os is t)at( &1' t)e S-?-$ copan5 c)eck in uestion as given *5 its presi#ent to R.. -iD &!' it as given onl5 *5 a5 of accoo#ation, to *e 8use# as collateral for anot)er o*ligationD8 &;' in *reac) of t)e agreeent, )oever, R.. -i in#orse# t)e c)eck to Arstrong in pa5ent of an o*ligationD &:' Arstrong #eposite# t)e c)eck to its account, after in#orsing itD &4' t)e c)eck as #is)onore#. )e recor# #oes not s)o an5 intervention or participation *5 S-C in an5 anner or for )atsoever in t)ese transactions, or an5 counication of an5 sort *eteen S-?-$ an# S-C, or *eteen eit)er of t)e an# Arstrong +n#ustries, at an5 tie *efore t)e #is)onor of t)e c)eck. )e recor# #oes s)o t)at after t)e c)eck )a# *een #eposite# an# #is)onore#, S-C cae into possession of it in soe a5, an# as a*le, several 5ears after t)e #is)onor of t)e c)eck, to give it in evi#ence at t)e trial of t)e civil case it )a# institute# against t)e #raers of t)e c)eck &-ison an# orres' an# R-. 2ossession of a negotia*le instruent after presentent an# #is)onor, or pa5ent, is utterl5 inconseuentialD it #oes not ake t)e possessor a )ol#er for value it)in t)e eaning of t)e laD it gives rise to no lia*ilit5 on t)e part of t)e aker or #raer an# in#orsers. +t is clear fro t)e relevant circustances t)at S-C cannot *e #eee# a )ol#er of t)e c)eck for value. +t #oes not eet to of t)e essential reuisites prescri*e# *5 t)e statute.
+t #i# not *ecoe 8t)e )ol#er of it *efore it as over#ue, an# it)out notice t)at it )a# *een previousl5 #is)onore#,8 an# it #i# not take t)e c)eck 8in goo# fait) an# for value.8 %eit)er is t)ere an5 evi#ence )atever t)at Arstrong +n#ustries, to )o R.. -i negotiate# t)e c)eck, accepte# t)e instruent an# attepte# to encas) it in *e)alf, an# as agent of S-C. n t)e contrar5, t)e in#ications are t)at Arstrong as reall5 t)e inten#e# pa5ee of t)e c)eck an# as t)e part5 actuall5 inBure# *5 its #is)onorD it as after all its representative &a Mr. oung' )o institute# t)e criinal prosecution of t)e #raers, -ison an# orres, al*eit &alt)oug)' unsuccessfull5.
