Procedimiento general de instalación del cabezal inteligente

FACTS:

Great Asian Sales was a business engaged in the selling and buying of merchandise. In 2 of its board resolutions, it first authorized Arsenio, its treasurer, to secure a loan from Bancasia as well as to sign any pertinent documents related to such. Second, it authorized Arsenio to obtain from Bancasia a discounting line. Pursuant to these, deeds of assignments were issued by Great Asian in favor of Bancasia for receivables—specifically checks. Almost all the checks assigned by Great Asian were dishonored. Notice of dishonor was sent by the bank and its lawyer to Tan Chong Lin. Later, Great Asian filed for insolvency and in its petition, Bancasia was one of those listed as its creditors. In the meanwhile, a complaint was filed against Great Asian and Tan Chong Lin because of the surety agreement it signed in favor of Bancasia.

HELD:

First, under the 2 board resolutions, indeed Arsenio was authorized to obtain a loan and sign any document related to the securing of the loan. The question is whether the deeds of assignment signed by Arsenio was within the ambits of his authority.

The deeds of assignment enabled Great Asian to generate instant cash, with checks which were not due and demandable then.

In the financing industry, a discounting line means a credit facility with a financing bank or company, which allows a business entity to sell, on a continuing basis, its accounts receivable at a discount. The term discount means the sale of a receivable at less than its face value. The purpose of discounting line is to enable a business entity to generate instate cash out of its receivables which are still to mature at future debts. The financing company or bank which buys the receivables makes its profits out of the difference between the face value of the receivable and the discounted price.

Clearly, the discounting arrangements entered into by Arsenio were the same arrangements authorized under the board resolutions.

Second, on the issue of breach of contract, Bancasia alleged that Great Asian committed a breach. In the deeds of assignment, it was stipulated that there is a vital suspensive condition—in case the drawers fail to pay the checks on maturity, Great Asian obligated itself to pay Bancasia the full face value of the dishonored checks, including penalties and other costs. Failure to pay would give rise to the obligation to pay Bancasia.

Great Asian and Bancasia agreed on this specific with recourse stipulation, despite that the receivables were negotiable instruments. The contracting parties are allowed such stipulation in addition to the warranties of an indorser under the NIL. The explicit with recourse stipulation against Great Asian enlarges the liability of Great Asian beyond that of a mere indorser of a negotiable instrument. Thus, whether or not Bancasia gives notice of dishonor to Great Asian, the latter remains liable because of the with recourse stipulation.

The recourse of Bancasia to file an action for breach of contract doesn’t leave Great Asian with an empty bag. It is then subrogated back as creditor of the receivables. Great Asian can now proceed against the drawers who issued the checks. Even if there was no timely notice of dishonor, Great Asian is not prejudiced. A notice of dishonor is not required if the drawer has no right to expect or require the bank to honor the check, or if the drawer has countermanded payment.

Wednesday: 187 and 189 NOTES: LAST WEEK NOTES: LAST WEEK

OCTOBER 1

OCTOBER 1 --6, 20076, 2007

Sec. 187. Certification of check; effect of. - Where a check is certified by the bank on which it is drawn, the certification is equivalent to an acceptance.

CERTIFICATION OF CHECK

 A certification is an agreement whereby the bank against whom a check is drawn, undertakes to pay it at any future time when presented for payment

 But a bank is not obligated to the depositor to certify checks

 And the drawee is not liable to the holder for refusal of the bank to certify the fcheck

 The refusal of the bank doesn’t dispense with the requirement of presentment for payment since a check is of right presentable only for payment at the bank on which it is drawn

FORM OF CERTIFICATION

 No particular form is required but it must be in writing

 The usual method is by stamping on the check the word “certified” and underneath it the signature of the cashier, or by writing upon the check the word “good” with the date of certification and signature of the officer of the bank having the express or implied authority to certify checks, has been held to be a sufficient certification

 The letters “OK” with the initials of the cashier of a bank doesn’t constitute a sufficient certification under modern banking practice EFFECT OF CERTIFICATION

1. Equivalent to acceptance and is the operative act that makes the drawee bank liable

2. It operates as an assignment of the funds of the drawer in the hands of the drawee bank

3. If obtained by the holder, it discharges the persons secondarily liable

CERTIFICATION EQUIVALENT TO ACCEPTANCE

 Certification is equivalent to acceptance in the drawee bank is bound on the instrument upon certification

 And it is immaterial to such liability in favor of a holder in due course whether the drawer had funds or not in the bank or the drawer was indebted to the bank for more than the amount of the check

 The certifying bank has all the liabilities of an acceptor under Section 62

IMPLICATION OF CERTIFICATION FURTHER EXPLAINED

 The bank virtually says that the check is good and we have the mo0ney of the drawer here ready to pay it. We will pay it now if you will receive it. The holder says no, I will not take the money; you may now certify the check and retain the money for me until this check is presented. The law will not permit a check, when due, to be thus presented, and the money to be left with the bank for the accommodation of the holder without discharging the drawer. The money being due and the check presented, it is his fault if the holder declines to receive the payment, and for his own convenience has the money appropriated to that check subject to its future presentment at any time within the statute of limitations.

FUNCTIONS OF CERTIFIED CHECKS

 Although a check doesn’t call for acceptance and the holder can present it only for payment, the certification of checks is a means in constant and extensive use in the business of banking and its effects and consequences are regulated by the law merchant. Checks drawn against banks, thus marked and certified, enter largely into the commercial and financial transactions of the country; they pass from hand to hand, in the payment of balances from one house and one bank to another. In the great commercial centers, they make up no inconsiderable portion of the circulation and thus perform a useful, valuable and an almost indispensable office

PURPOSE OF PROCURING CHECKS TO BE CERTIFIED

 To impart strength and credit to the paper by acknowledgment from the certifying bank that the drawer has funds therein sufficient to cover the check and securing the engagement of the bank that the check will be paid upon presentation

 When a check is certified, it ceases to possess the character, or to perform its functions, of a check, and represents so much money on deposit, payable to the holder on demand.

 The check becomes a basis for credit and an easy mode of passing money from hand to hadn and answers the purposes of money

PAYMENT NEITHER INCLUDES NOR IMPLIES ACCEPTANCE

 Acceptance and payment are entirely different. If the drawee accepts the paper after seeing it, and then permits it to go into circulation as genuine, on all the principles of estoppel, he ought to be prevented from setting up forgery to defeat liability to one who has taken the paper on the faith of the acceptance or certification

 On the other hand, mere payment of the paper at the termination of its course doesn’t act as an act of estoppel

 Payment is the final act which extinguishes a bill

 Acceptance is the promise to pay in the future and continues the life of the bill

RIGHT OF THE HOLDER TO SUE DRAWER WHERE CHECK NOT CERTIFIED  The drawer of a check certifies that it will be paid on presentment but

not that it will be certified

 This is the theory on which the law discharging the drawer and indorsers upon certification is based

 Certification is different from acceptance in that the refusal of the drawee bank to certify doesn’t amount to a dishonor of the check  There is no need for a notice of non-certification and the check must

still be presented for paymenht CASE DIGESTS: SECTION 187 187 PANLILIO V. DAVID

50 PHIL 105