G.R. No. 148211
Lessons Applicable: Liabilities of Parties (Negotiable Instruments Law)
FACTS:
- Nite loaned from Villanueva P409,000
- as a sceurity he issued an Asian Bank Corporation (ABC) check of P325,500 dated February 8, 1994
- it was consented to be changed to June 8, 1994
- check was dishonored due to a material alteration
- August 24, 1994: Nite while abroad partially paid P235K through her representative Emily P. Abojada
- The balance of P174K was due on or before December 8, 1994.
- August 24, 1994: Villanueva filed an action for a sum of money and damages against ABC for the full amount of the dishonored check (despite the loan not being due and Nite away)
- RTC: favored Villanueva
- June 30, 1997: Nite went to ABC to withdraw but she was not able to because of the RTC order
- August 25, 1997: ABC remitted to the sheriff a manager’s check amounting to P325,500 drawn on Nite's account
- CA: favored Nite's appeal
ISSUE: W/N ABC should be liable to Villanueva
HELD: NO. DENIED
- Negotiable Instruments Law
- SEC. 185. Check, defined. – A check is a bill of exchange drawn on a bank payable on demand. Except as herein otherwise provided, the provisions of this Act applicable to a bill of exchange payable on demand apply to a check
- SEC. 189. When check operates as an assignment. – A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder, unless and until it accepts or certifies the check
- Rule 3, Sec. 7 of the Rules of Court states:Sec. 7. Compulsory joinder of indispensable parties. – Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants.
- The contract of loan was between Villanueva and Nite. No collection suit could prosper without Nite who was an indispensable party