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Serrano vs.

22 April 1991
GR 45125
Feliciano, J.
Petitioner/s: Loreta Serrano
Court of Appeals and Long Life Pawnshop, Inc.
Petitioner Loreta Serrano pawned 48,500 worth of jewelry to respondent Long Life Pawnshop, Inc. This was
done through her secretary, Josefina Rocco. Josefina pawned the said items for 22,000 and absconded with
the amount and pawn ticket.
In the original case, petitioner Loreta Serrano filed a complaint for qualified theft and later changed to estafa
against Josefina Rocco. She also filed a case for damages against Long Life for failure to hold the jewelry as
Yu An Kiong (Pawnbroker and GM of Long Life) permitted a certain Tomasa de Leon to redeem it as she
had the appropriate pawn ticket.
In this petition for review, the SC reversed the CA decision and reinstated the trial court decision which
awarded damages to petitioner. The court held that the pawn ticket was not a negotiable instrument under RA
Petitioner Loreta Serrano (Serrano) purchased jewelry from Niceta Ribaya worth 48,500. She then pawned this
through her secretary Josefina Rocco, who absconded with the amount and the pawn ticket which stipulated
that it was redeemable on presentation of the bearer.
Subsequently, Serrano was then informed 3 months later that the same ticket was being sold by Long Life
Pawnshop. She proceeded to the shop and informed the Pawnbroker and GM of Long Life, Yu An Kiong, of
her predicament and asked him to hold on to the jewelry.
Serrano then went to the Manila Police Department to report the loss and file a complaint for qualified theft
which was later changed to Estafa against Rocco
On the same day, Detective Mateo went to the pawnshop and informed the Pawnbroker of the complaint and
asked the latter to notify the police in case the jewelry was redeemed
However, the day after, the GM permitted a certain Tomasa de Leon to redeem the Jewelry as she was
holding the appropriate pawnshop ticket, to redeem the jewelry
Petitioner filed a complaint with the CFI for damages against Long life
o Trial Court decision in favor of petitioner. Damages awarded.
o CA reversed decision. And complaint was dismissed
Petitioner filed this petition for review seeking for reversal of CA findings relating to the credibility of witnesses
and to restore the trial courts decision which awarded her damages.
1. Whether the CA committed an error when they reversed the RTC decision - YES
2. Whether the pawn ticket was a negotiable instrument under RA 2031 or the Negotiable Instruments
Law1 (NIL) - NO

Instruments Law (RA 2031)

Section 1. Form of negotiable instruments.
An instrument to be negotiable must conform to the following requirements:
(a) It must be in writing and signed by the maker or drawer;
(b) Must contain an unconditional promise or order to pay a sum certain in money;

1. YES, the CA committed a reversible error.
The SC found that the CAs rejection of the testimony of petitioner and Detective Mateo as well as for
faulting Loreta for failing to report the said loss of jewelry immediately was erroneous as Rocco had
simply disappeared with the money and ticket.
Also, the petitioner had no way to know whether the jewelry was misappropriated. Additionally, the CAs
reliance on the lack of evidence for the notice given to Yu An Kiong was of no great importance.
Additionally, the SC held that the burden of proof had been discharged by petitioner, and that it was
2. No the pawn ticket was not a Negotiable Instrument under the Negotiable Instruments Law
Yu An Kiong, the pawnbroker, was informed by both the petitioner and police that the jewelry was
stolen or involved in an embezzlement of the proceeds of the pledge. Thus, he became duty bound
(imposed by Art 21 of the Civil Code) to hold the jewelry and give notice to both the Loreta and the
police. That the pawn ticket stated that the pawn was redeemable by the bearer, did not dissolve
this duty.
Lastly, the SC held that the pawn ticket was not a Negotiable Instrument under the NIL. Nor was
it a Negotiable Document under Article 1507 of the Civil Code.
RULING: Petition is granted. CFI decision reinstated.

(c) Must be payable on demand, or at a fixed or determinable future time;

(d) Must be payable to order or to bearer; and
(e) Where the instrument is addressed to a drawee, he must be named or otherwise indicated therein with reasonable certainty.
Prepared by : Alegre, Kristine Joyce