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RAUL SESBREO, petitioner,

BANK, respondents.
G.R. No. 89252/ 222 SCRA 466
May 24, 1993
Petitioner Raul Sesbreo made a money market placement in the amount of
P300,000.00 with the Philippine Underwriters Finance Corporation ("Philfinance") with a term of
32 days. PhilFinance issued to Sesbreno the Certificate of Confirmation of Sale of a Delta Motor
Corporation Promissory Note 2731, the Certificate of Securities Delivery Receipt indicating the
sale of the note with notation that said security was in the custody of Pilipinas Bank, and
postdated checks drawn against the Insular Bank of Asia and America for P304, 533.33 payable
on 13 March 1981. Upon its maturity, petitioner sought to encash the postdated checks but they
were dishonored for having insufficient funds.
Petitioner then issued a demand letter to private respondent Pilipinas Bank, but the note
was never released nor any instrument related thereto. Petitioner also made a written
demand upon private respondent Delta as maker for the partial satisfaction of DMC PN No.
2731, explaining that Philfinance, as payee thereof, had assigned to him said Note. Delta,
however, denied any liability to petitioner on the promissory note.
As petitioner had failed to collect his investment and interest thereon, he filed an action
for damages with the RTC against private respondents Delta and Pilipinas. The complaint was
dismissed and was affirmed by the CA on appeal.
WON a non-negotiable promissory note be assigned.
Only an instrument qualifying as a negotiable instrument under the relevant statute may
be negotiated either by indorsement thereof coupled with delivery or by delivery alone where the
negotiable instrument is in bearer form. A negotiable instrument may, however, instead of being
negotiated, also be assigned or transferred. The legal consequences of negotiation as
distinguished from assignment of a negotiable instrument are, of course, different. A nonnegotiable instrument may, obviously, not be negotiated; but it may be assigned or transferred,
absent an express prohibition against assignment or transfer written in the face of the

In this case, while the promissory note was marked "non-negotiable," it was not at the
same time stamped "non-transferable" or "non-assignable." Hence, there is no stipulation which
prohibited the promissory notes assigning or transferring, in whole or in part.