G.R. No. 167567, 22 September 2010

FACTS:

Respondent, as a security for his credit purchases, issued to petitioner several postdated checks. Later on respondent took the checks from the petitioner leading the latter to file a case of theft against him.

The prosecutor dismissed the case as the checks were issued to the petitioner as mere security hence ownership of the same still belonged to respondent.

ISSUE:

Was ownership of the postdated checks transferred from respondent to petitioner?

RULING:

No. Since the checks were issued to cover the credit purchases not as payment.

The Negotiable Instruments Law provides that:

Sec. 12. Antedated and postdated – The instrument is not invalid for the reason only that it is antedated or postdated, provided this is not done for an illegal or fraudulent purpose. The person to whom an instrument so dated is delivered acquires the title thereto as of the date of delivery.

Note however that delivery as the term is used in the aforementioned provision means that the party delivering did so for the purpose of giving effect thereto. Otherwise, it cannot be said that there has been delivery of the negotiable instrument. Once there is delivery, the person to whom the instrument is delivered gets the title to the instrument completely and irrevocably.

If the subject check was given by Puzon to SMC in payment of the obligation, the purpose of giving effect to the instrument is evident thus title to or ownership of the check was transferred upon delivery.

However, if the check was not given as payment, there being no intent to give effect to the instrument, then ownership of the check was not transferred to SMC. The evidence of SMC failed to establish that the check was given in payment of the obligation of Puzon. There was no provisional receipt or official receipt issued for the amount of the check.

The check was only meant to cover the transaction and in the meantime Puzon was to pay for the transaction by some other means other than the check. This being so, title to the check did not transfer to SMC.

*Case digest by Roger Angielo V. Atenta, JD-IV, Andres Bonifacio Law School, SY 2019-2020