Since there was no delivery, presentment of the check to the bank for
payment did not occur. An order to debit the account of respondents was never
made. x x x As a result, the assigned fund is deemed to remain part of the
account of Hi-Tri, 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.
- An ordinary check refers to a bill of exchange drawn by a depositor
(drawer) on a bank (drawee), requesting the latter to pay a person
named therein (payee) or to the order of the payee or to the bearer, a named
sum of money. The issuance of the check does not of itself operate
as an assignment of any part of the funds in the bank to the credit of the
drawer. Here, the bank becomes liable only after it accepts or
certifies the check. After the check is accepted for payment, the
bank would then debit the amount to be paid to the holder of the check from the
account of the depositor-drawer.
There are checks of a
special type called manager’s or cashier’s checks. These are bills of exchange
drawn by the bank’s manager or cashier, in the name of the bank, against the
bank itself. Typically, a manager’s or a cashier’s check is procured from
the bank by allocating a particular amount of funds to be debited from the
depositor’s account or by directly paying or depositing to the bank the value
of the check to be drawn. Since the bank issues the check in its name, with
itself as the drawee, the check is deemed accepted in advance. Ordinarily,
the check becomes the primary obligation of the issuing bank and constitutes
its written promise to pay upon demand.
Nevertheless, the
mere issuance of a manager’s check does not ipso facto 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 purpose 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. (Emphasis supplied.)
Petitioner
acknowledges that the Manager’s Check was procured by respondents, and that the
amount to be paid for the check would be sourced from the deposit account of
Hi-Tri. When Rosmil did not accept the Manager’s Check offered by
respondents, the latter retained custody of the instrument instead of
cancelling it. As the Manager’s Check neither went to the hands of Rosmil nor
was it further negotiated to other persons, the instrument remained
undelivered. Petitioner does not dispute the fact that respondents retained
custody of the instrument.
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