FACTS: Assailed in this Petition for Review on Certiorari is the Decision of the respondent CA affirming the nullity of the transfer of central Bank Certificate of Indebtedness (CBC) No. D981, with a face value of P500,000 from Philippine Underwriters Finance Corporation (Philfinance) to the petitioner Trader’s Royal Bank (TRB)
ISSUE: Whether or not CBCI No D891 is a negotiable instrument
HELD: No. The language of negotiability which characterizes a negotiable paper as a credit instrument is its freedom to circulate as a substitute for money. Hence, freedom negotiability is the touchstone relating to the protection of holders in due course, and the freedom of negotiability is the foundation for the protection which the law throws around a holder in due course.
This freedom in negotiability is totally absent in a certificate of indebtedness as it merely acknowledges paying a sum of money to a specified person or entity for a period of time.
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