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NIL Case Digest For Series 1

This case discusses whether an undelivered salary check of a government employee can be subject to garnishment. The Supreme Court ruled that (1) based on the Negotiable Instruments Law, a check is not owned by the payee until actual delivery, so the undelivered checks of the government employee still belonged to the government; and (2) as public funds, the checks may not be garnished to satisfy a judgment to avoid disrupting public services by diverting funds from their intended purposes. The ruling upheld that undelivered salary checks of government employees, as still being public funds, are not subject to garnishment.

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Bianka Sylvee
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79 views7 pages

NIL Case Digest For Series 1

This case discusses whether an undelivered salary check of a government employee can be subject to garnishment. The Supreme Court ruled that (1) based on the Negotiable Instruments Law, a check is not owned by the payee until actual delivery, so the undelivered checks of the government employee still belonged to the government; and (2) as public funds, the checks may not be garnished to satisfy a judgment to avoid disrupting public services by diverting funds from their intended purposes. The ruling upheld that undelivered salary checks of government employees, as still being public funds, are not subject to garnishment.

Uploaded by

Bianka Sylvee
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 PPSX, PDF, TXT or read online on Scribd
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Negotiable

Instruments Law
Case Digest
April 12, 2021
Loreto D. De la Victoria vs. Hon. Jose P. Burgos and Raul H. Sesbreñ o
G.R. No. 111190 June 27, 1995

FACTS OF THE CASE:


• RAUL filed a complaint for damages against Assistant City Fiscals Bienvenido Mabanto,
Jr. and Dario D. Rama before the Regional Trial Court of Cebu City.
• Judgment was rendered ordering the City Fiscals to pay P 11, 000.00 to RAUL.
• RAUL filed a Motion for Execution which was granted and a Writ of Execution was
issued.
• A Notice of Garnishment was served on LORETO DE LA VICTORIA as City Fiscal of
Mandaue City where Mabanto was detailed.
• The Notice directed LORETO to release the salary checks of Mabanto to the deputy
sheriff.
Loreto D. De la Victoria vs. Hon. Jose P. Burgos and Raul H. Sesbreñ o
G.R. No. 111190 June 27, 1995

FACTS OF THE CASE:


• LORETO moved to quash the notice of garnishment claiming that he was not in
possession of any money, funds, credit, property or anything of value belonging to
Mabanto, Jr., except his salary and RATA checks, but that said checks were not yet
properties of Mabanto, Jr., until delivered to him. As such, they were still public funds
which could not be subject to garnishment.
• The RTC said Mabanto’s checks had been released through LORETO by the
Department of Justice duly signed by the officer concerned. Upon service of the writ of
garnishment, LORETO as custodian of the checks was under obligation to hold them
for the judgment creditor. He had no sufficient reason to hold the checks because they
were no longer government funds and presumably delivered to the payee, conformably
with the last sentence of Sec. 16 of the Negotiable Instruments Law.
Loreto D. De la Victoria vs. Hon. Jose P. Burgos and Raul H. Sesbreñ o
G.R. No. 111190 June 27, 1995

ISSUES:
• Whether a check in the hands of the maker or its duly authorized representative is
already owned by the payee before physical delivery to him?
• Whether an undelivered salary check of a government employee funded with public
funds can be subject to garnishment?
Loreto D. De la Victoria vs. Hon. Jose P. Burgos and Raul H. Sesbreñ o
G.R. No. 111190 June 27, 1995

THE SUPREME COURT SAID:


•LORETO has well argued his case. (As future lawyers, your aim is to argue your case well! )
•Section 16 of the Negotiable Instruments Law states that “Every contract on a negotiable instrument is incomplete
and revocable until delivery of the instrument for the purpose of giving effect thereto x x x x x Where the instrument is
no longer in the possession of a party whose signature appears thereon, a valid and intentional delivery by him is
presumed until the contrary is proved.”
•As Assistant City Fiscal, the source of the salary of Mabanto is public funds. He receives his compensation in the
form of checks from the Department of Justice through the City Fiscal of Mandaue City as head of office.
•Remember that delivery means the transfer of the possession of the instrument by the maker or drawer with intent
to transfer title to the payee and recognize him as the holder thereof.
•The Regional Trial Court considered Mabanto’s checks as no longer government funds and presumed delivered to
the payee based on the last sentence of Sec. 16 of the Negotiable Instruments Law which states: "And where the
instrument is no longer in the possession of a party whose signature appears thereon, a valid and intentional delivery
by him is presumed." Yet, the presumption is not conclusive because the last portion of the provision says "until the
contrary is proved." However this phrase was deleted by the trial court for no apparent reason. Proof to the contrary
is its own finding that the checks were still in the custody of LORETO. Inasmuch as said checks had not yet been
delivered to Mabanto they did not belong to him and still had the character of public funds
Loreto D. De la Victoria vs. Hon. Jose P. Burgos and Raul H. Sesbreñ o
G.R. No. 111190 June 27, 1995

THE SUPREME COURT SAID:


• The salary check of a government officer or employee does not belong to him
before it is physically delivered to him. Until that time the check belongs to the
government. Accordingly, before there is actual delivery of the check, the payee has
no power over it; he cannot assign it without the consent of the Government.

• As a necessary consequence of being public fund, the checks may not be garnished
to satisfy judgment. The rationale behind this doctrine is obvious consideration of
public policy. The functions and public services rendered by the State cannot be
allowed to be paralyzed or disrupted by the diversion of public funds from their
legitimate and specific objects, as appropriated by law.
Thank you!
Until our next class.   

REMEMBER:
Stay positive and
never lose hope.
Better days are
coming.

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