In
the case of Rizal Commercial Banking
Corporation vs. Hi-Tri Development Corporation, et al,[1], the Court
speaking through Justice Sereno held that: “the mere issuance of a manager’s
check does not ipso fact work as an
automatic transfer of funds to the account of the payee. In case the procurer of the manager’s or
cashier’s check retains custody of the instrument, does not tender it to the
intended payee, or fails to make an effective delivery, we find the following
provision on undelivered instruments under the Negotiable Instruments Law
applicable:
Sec.
16. Delivery; when effectual; when
presumed.—Every contract on a negotiable instrument is incomplete and revocable
until delivery of the instrument for the purposes of giving effect thereto. As between immediate parties and as regards a
remote party other than a holder in due course, the delivery, in order to be
effectual, must be made either by or under the authority of the party making,
drawing, accepting, or indorsing, as the case may be; and, in such case, the
delivery may be shown to have been conditional, or for a special purpose only,
and not for the purpose of transferring the property in the instrument. But where the instrument is in the hands of a
holder in due course, a valid delivery thereof by all parties prior to him so
as to make them liable to him is conclusively presumed. And where the instrument is no longer in the
possession of a party whose signature appears thereon, a valid and intentional
delivery by him is presumed until the contrary is proved.
Since there was no
delivery, presentment of the check for payment did no occur. An order to debit the accout x x x was never
made. x x x As a result, the assigned
fund is deemed to remain part of the account of x x x [the one] which procured
the Manager’s Check. The doctrine that
the deposit represented by a manager’s check automatically passes to the payee
is inapplicable, because the instrument—although accepted in advance—remains
undelivered.”
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