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Philippine Education Co v. Mauricio Soriano, Et Al.

The plaintiff sought to deposit a stolen postal money order and sued when the postal service deducted the funds. The court ruled that postal money orders are not considered negotiable instruments under Philippine law, adopting the prevailing US view. Money orders differ from negotiable instruments in that the postal service issues them to exercise governmental power for public benefit rather than for commercial transactions. Some restrictions on money orders, like limits on endorsements or withholding payment, are also inconsistent with negotiable instruments. The court found for the defendants.

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1K views2 pages

Philippine Education Co v. Mauricio Soriano, Et Al.

The plaintiff sought to deposit a stolen postal money order and sued when the postal service deducted the funds. The court ruled that postal money orders are not considered negotiable instruments under Philippine law, adopting the prevailing US view. Money orders differ from negotiable instruments in that the postal service issues them to exercise governmental power for public benefit rather than for commercial transactions. Some restrictions on money orders, like limits on endorsements or withholding payment, are also inconsistent with negotiable instruments. The court found for the defendants.

Uploaded by

Katrina Perez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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PHILIPPINE EDUCATION CO., v. MAURICIO A. SORIANO, ET AL., G.R. NO.

L-22405, 30
JUNE 1971

Re: Are money orders considered a negotiable instrument?

FACTS:
Enrique Montinola sought to purchase from the Manila Post Office ten (10) money orders of P200.00
where he offered to pay them with a private check. As private checks were not generally accepted in
payment of money orders, the teller advised Montinola to go see the Chief of the Money Order Division.
Instead of doing so, Montinola managed to leave the building with his check and the money orders
without the knowledge of the teller.
On April 23, 1958, plaintiff-appellant Philippine Education Co. received one of the stolen money orders
and deposited it to the Bank of America. The Bank then cleared it with the Bureau of Posts the next day
and received the face value of P200.00.
Thereafter, the defendant-appellee Mauricio Soriano, the Chief of the Money Order Division, notified the
Bank of America with its finding that the money order had been irregularly issued and, as such, it
deducted from the Bank’s clearing account the said amount. Consequently, said bank debited the same
amount to the account of plaintiff-appellant.
Pursuant to the denial of his request to the Postmaster General to reconsider the action taken by its office
as regards the deduction of P200.00 from the clearing account of the Bank of America, plaintiff-appellant
filed an action against the appellees with the Municipal Court of Manila, praying that the defendants
countermand or revoke the notice given to the Bank of America; or, in the alternative, to pay plaintiff the
same amount with 8 1/2 % of interest, and a claim for damages.
The Municipal Court’s judgment was in favor of the plaintiff, ordering the defendants to either
countermand the notice or pay the plaintiff.
On appeal to the Court of First Instance of Manila, the CFI dismissed the complaints. Plaintiff now comes
to this Court contending that the postal money order in question is a negotiable instrument.

ISSUE:
Whether the postal money order in question is a negotiable instrument.

RULING:
No.
It is not disputed that our postal statutes were patterned after similar statutes in force in the United States.
For this reason, ours are generally construed in accordance with the construction given in the United
States to their own postal statutes, in the absence of any special reason justifying a departure from this
policy or practice. The weight of authority in the United States is that postal money orders are not
negotiable instruments (Bolognesi v. U. S., 189 Fed. 395; U.S. v. Stock Drawers National Bank, 30 Fed.
912), the reason behind this rule being that, in establishing and operating a postal money order system,
the government is not engaging in commercial transactions but merely exercises a governmental
power for the public benefit.
It is to be noted in this connection that some of the restrictions imposed upon money orders by postal laws
and regulations are inconsistent with the character of negotiable instruments. For instance, such laws
and regulations usually provide for not more than one endorsement; payment of money orders may be
withheld under a variety of circumstances (49 C. J. 1153).

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