PECO vs. Soriano
The Bank of America debited
G.R. No. L-22405 | 39 SCRA 587 | June 30, 1971 | DIZON, J.
Petition: Appeal from a decision of the CFI of Manila dismissing complaint
filed by PECO against Soriano, et al.
Petitioners: Philippine Education Co., Inc.
Respondents: Mauricio A. Soriano, et al.
Negotiable Instruments Law; Chapter 1: Form and Interpretation;
Section 8
DOCTRINE
• In establishing and operating a postal money order system, the
government is not engaging in commercial transactions but merely
exercises a governmental power for public benefit.
Civil Code Provision
Chapter 1: Form and Interpretation
Section 8: The instrument is payable to order where it is drawn payable to
the order of a specified person or to him or his order. It may be drawn
payable to the order of:
(a) A payee who is not maker, drawer, or drawee; or
(b) The drawer or maker; or
(c) The drawee; or
(d) Two or more payees jointly; or
(e) One or some of several payees; or
(f) The holder of an office for the time being.
Where the instrument is payable to order, the payee must be named or
otherwise indicated therein with reasonable certainty.
FACTS
o Enrique Montinola sought to purchase from Manila Post Office 10 money
orders of P200 each payable to E.P. Montinola with address at Lucena,
Quezon. Montinola offered to pay for the money orders with private
checks, which were not generally accepted in payment of money orders.
o The teller advised him to see the Chief of the Money Order Division.
Instead of doing so, Montinola left the building with his own check and 10
money orders without the knowledge of the teller.
o An urgent message was sent to all postmasters and upon all banks
instructing them not to pay anyone if the money orders were presented
for payment. Bank of America received a copy of the notice 3 days later.
o Philippine Education Co., Inc. (PECO) received one of the money orders
as part of its sales receipt. The following day it deposited the same with
Bank of America and it was cleared one day after with the Bureau of
Posts receiving its face value of P200.
o Mauricio Soriano, Chief of the Money Order Division notified Bank of
America that the money order deposited had been found to have been
irregularly issued and that, the amount it represented had been deducted
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from the bank’s clearing account.
(reduced) PECO’s account with the same account and give notice by
mean of debit memo.
ISSUES
o W/N the Postal Money Order in question is a negotiable instrument. NO
RULING & RATIO
o Philippine postal statutes were patterned after statutes in force in the US.
Therefore, they are generally construed in accordance with construction
given in the US to their own statutes.
o In the US, postal money orders are not negotiable instruments. This is
because in establishing and operating a postal money order system, the
government is not engaging in commercial transactions but merely
exercises a governmental power for public benefit.
o Moreover, some restrictions on money orders by postal laws and
regulations are inconsistent with the character of negotiable instruments.
• For example, (a) such laws usually provide for not more than 1
endorsement and (b) payment of money orders may be withheld
under a variety of circumstances
o There was already an agreement between Bank of America and the
Manila Post Office, that in case the post office would have an adverse
claim against any Bank of America depositor involving postal money
orders issued by the post office, all amounts cleared in relation thereto
shall be refunded back to the post office’s account with the bank. This in
itself is already a limitation in the negotiability and nature of the postal
money orders issued by the post office because of the special conditions
attached.
DISPOSITION
o WHEREFORE, the appealed decision being in accordance with law, the
same is hereby affirmed with costs.
N-08-03 Peco v. Soriano.pdf
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