Kauffman v. PNB,
GR No. 16454 September 29, 1921
Facts:
George A. Kauffman,
was the president of a domestic corporation engaged chiefly in the exportation
of hemp from the Philippine Islands and known as the Philippine Fiber and
Produce Company (PFPC). On February 5, 1918, the board of directors of said
company, declared a dividend of P100, 000.00 from its surplus earnings for the
year 1917, of which the plaintiff was entitled to the sum of P98, 000.
George B. Wicks, treasurer of the Philippine Fiber
and Produce Company, presented himself in the exchange department of the
Philippine National Bank in Manila and requested that a telegraphic transfer of
$45,000 should be made to the plaintiff in New York City, upon account of the PFPC.
Accordingly, Wicks, as treasurer of the PFPC, thereupon drew and delivered a
check for that amount on the PNB; and the same was accepted by the officer
selling the exchange in payment of the transfer in question. As evidence of
this transaction a document was made out and delivered to Wicks, which is
referred to by the bank's assistant cashier as its official receipt. As
evidence of this transaction a document was made out and delivered to Wicks,
which is referred to by the bank's assistant cashier as its official receipt.
This memorandum receipt is in the following language:
CABLE TRANSFER BOUGHT FROM
PHILIPPINE NATIONAL BANK,
Manila, P.I.
Stamp P18
Foreign Amount
Rate
$45,000. 3/8 %
P90,337.50
Payable through Philippine National Bank, New York. To G. A. Kauffman,
New York. Total P90,355.50. Account of Philippine Fiber and Produce Company.
Sold to Messrs. Philippine Fiber and Produce Company, Manila.
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(Sgd.) Y LERMA,
Manager, Foreign Department.
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Upon receiving the telegraphic message, the bank's
representative in New York sent a cable message in reply suggesting the
advisability of withholding this money from Kauffman, in view of his reluctance
to accept certain bills of the Philippine Fiber and Produce Company. The PNB
acquiesced in this and on October 11 dispatched to its New York agency another
message to withhold the Kauffman payment as suggested.
Meanwhile Wicks, the treasurer of the PFPC, cabled
to Kauffman in New York, advising him that $45,000 had been placed to his
credit in the New York agency of the PNB; and in response to this advice
Kauffman presented himself at the office of the PNB in New York City on October
15, 1918, and demanded the money. By this time, however, the message from the PNB
of October 11, directing the withholding of payment had been received in New
York, and payment was therefore refused.
In view of these facts, the plaintiff Kauffman
instituted the present action in the Court of First Instance of the city of
Manila to recover said sum, with interest and costs; and judgment having been
there entered favorably to the plaintiff, the defendant appealed. PNB argued
that Kauffman was not a party to the contract with the bank for the
transmission of this credit, no right of action can be vested in him for the
breach thereof.
Issue:
Whether or not
Kauffman is a party to the contract with the bank for the transmission of the
said credit.
Held:
Yes.
Ratio:
The provisions of the
Negotiable Instruments Law can come into operation there must be a document in
existence of the character described in section 1 of the Law; and no rights
properly speaking arise in respect to said instrument until it is delivered. In
the case before us there was an order, it is true, transmitted by the defendant
bank to its New York branch, for the payment of a specified sum of money to
George A. Kauffman. But this order was not made payable "to order or
"to bearer," as required in subsection (d) of that Act; and inasmuch
as it never left the possession of the bank, or its representative in New York
City, there was no delivery in the sense intended in section 16 of the same
Law. In this connection it is unnecessary to point out that the official receipt
delivered by the bank to the purchaser of the telegraphic order, and already
set out above, cannot itself be viewed in the light of a negotiable instrument,
although it affords complete proof of the obligation actually assumed by the
bank.
The right of the
plaintiff to maintain the present action is clear enough; for it is undeniable
that the bank's promise to cause a definite sum of money to be paid to the
plaintiff in New York City is a stipulation in his favor within the meaning of
Art. 1257, par. 2, Civ. Code [Should the contract contain any stipulation in favor of a third
person, he may demand its fulfillment, provided he has given notice of his
acceptance to the person bound before the stipulation has been revoked. (Art.
1257, par. 2, Civ. Code.)]; and the circumstances under which that promise was given disclose an
evident intention on the part of the contracting parties that the plaintiff
should have the money upon demand in New York City. The recognition of this
unqualified right in the plaintiff to receive the money implies in our opinion
the right in him to maintain an action to recover it; and indeed if the
provision in question were not applicable to the facts now before us, it would
be difficult to conceive of a case arising under it.