- Petitioner
- Caltex (Philippines)
- Respondent
- Court of Appeals
- Citation
- G.R. No. 97753
- Court
- Supreme Court
- Division
- Second Division
- Ponente
- Regalado, J.
- Decided
- August 10, 1992
Summary
Caltex sued Security Bank to recover P1,120,000.00 from certificates of time deposit (CTDs) delivered by Angel dela Cruz in connection with fuel purchases. The Supreme Court held that while CTDs are negotiable instruments payable to bearer, Caltex cannot recover because the CTDs were delivered as security, not payment, as evidenced by Caltex's own letter stating they were 'to guarantee' fuel purchases. Valid negotiation of CTDs as security required both delivery and indorsement under Civil Code provisions on pledge of incorporeal rights. Since Caltex failed to comply with statutory requirements for pledge agreements and Security Bank properly documented its assignment, the bank had superior rights. The decision reinforced requirements for negotiable instrument transfers and proper documentation of security interests in commercial transactions.