Sesbreno vs CA

FACTS: Petitioner Sesbreno made a money market placement

with PhilFinance for a term of 32 days. In return, PhilFinance
issued to Sesbreno the Certificate of Confirmation of Sale with a
Delta Motor Corporation Promissory Note, 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 March 13, 1981. The checks
were dishonored for having been drawn against insufficient
funds. Pilipinas Bank never released the note, nor any instrument
related thereto to Sesbreno, but Sesbreno learned that the security
which was issued on April 10, 1980, maturing on 6 April 1981,
has a face value of P2,300,833.33 with PhilFinance as payee and
Delta Motors as maker; and was stamped “non-negotiable” on its
face. As Sesbreno was unable to collect his investment and
interest thereon, he filed an action for damages against Delta
Motors and Pilipinas Bank. Delta Motors contents that said
promissory note was not intended to be negotiated or otherwise
transferred by Philfinance as manifested by the word "non-
negotiable" stamped across the face of the Note.

ISSUE: WON non-negotiability of a promissory note prevents its

assignment

HELD/RULING: A negotiable instrument, instead of being

negotiated, may also be assigned or transferred. The legal
consequences of negotiation and assignment of the instrument are
different. A non-negotiable instrument may not be negotiated but
may be assigned or transferred, absent an express prohibition
against assignment or transfer written in the face of the
instrument. The subject promissory note, while marked "non-
negotiable," was not at the same time stamped "non-transferable"
or "non-assignable." It contained no stipulation which prohibited
Philfinance from assigning or transferring such note, in whole or
in part.