PHILIPPINE EDUCATION CO., INC., VS. SORIANO ET.AL

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PHILIPPINE EDUCATION CO., INC., VS. SORIANO ET.AL

Negotiable Instruments: Money Orders are not Negotiable Instruments

39 SCRA 587. JUNE 30, 1971

Dizon.,

This is an appeal from a decision of the Court of First Instance of Manila dismissing the Complaint filed by the Philippine Education against the defendants. 

FACTS: 


Enrique Montinola sought to purchase from the Manila, Post Office ten (10) money orders of P200.00 each payable to E.P Montinola. After the teller had made out the money orders, Montinola offered to pay for them with private check. As private checks were not generally accepted in payment of money orders, the teller advised him to see the Chief of the money order division, but instead of doing so, Montinola managed to leave the building with his own check and the ten money orders without the knowledge of the teller. 

On the same date (April 18, 1958), upon discovery of the disappearance of the unpaid money orders, a notice was served upon all banks, instructing them not to pay anyone of the money orders with numbers given if presented for payment. The bank of America received a copy of said notice 3 days later. 

On April 23, one of the money orders was received by the appellant Philippine Education., as part of its sales receipts. The following day, it deposited the same with the Bank of America and one day thereafter the latter cleared and received from the Bureau of Posts its face value of P200.00 and so was deposited to the appellant's bank account.

On September 27, 1961 appellee Soriano, Chief of Money Order Division of the Manila Post Office, notified the Bank of America that such money order attached to his letter had been found to have been irregularly issued and that, in view thereof, the amount it represented had been deducted from the Bank's clearing account. For its part, the Bank of America debited appellant's account (Phil.Edu.) with the same amount.

The appellant Phil.Edu invoked that the money order was duly negotiated to them and thus they are entitled to the amount it represents and thus raised that the postal money order in question is a negotiable instrument; and that the money orders, once issued create a contractual relationship of debtor and creditor, respectively bet. the government and the remitters payees or endorsees. 

ISSUE:


Whether or not the postal money order is a negotiable instrument. 

HELD:


No Postal Money Order is not negotiable instrument. Philippine postal statutes were patterned after similar statutes enforced in United States and for this reason, ours are generally construed in accordance with the construction given in U.S to their own postal statutes. The weight of authority in U.S is that postal money orders are not negotiable instruments, the reason being that in establishing and operating a postal money order system, the government is not engaged in commercial transactions but merely exercises a governmental power for the public benefit.

Moreover, some restrictions are imposed upon money orders by postal laws are inconsistent with the character of negotiable instruments or limiting its negotiability, for instance, as far back in 1948 there is already an agreement between Bank of America and the Manila Post Office that payment of money orders may  be withheld under a variety of circumstances, for example, in case of adverse claim against any Bank of America depositor involving postal money orders issued by the Post Office, all amounts cleared in relation thereto shall be refunded back to the post office's account, this special condition attached limits the negotiability of the money orders. 

The appealed decision is affirmed. 





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