6/27/2016 G.R.No.

L22405

TodayisMonday,June27,2016

RepublicofthePhilippines
SUPREMECOURT
Manila

ENBANC

G.R.No.L22405June30,1971

PHILIPPINEEDUCATIONCO.,INC.,plaintiffappellant,
vs.
MAURICIOA.SORIANO,ETAL.,defendantappellees.

MarcialEsposoforplaintiffappellant.

OfficeoftheSolicitorGeneralArturoA.Alafriz,AssistantSolicitorGeneralAntonioG.IbarraandAttorney
ConcepcionTorrijosAgapinanfordefendantsappellees.

DIZON,J.:

AnappealfromadecisionoftheCourtofFirstInstanceofManiladismissingthecomplaintfiledbythePhilippine
EducationCo.,Inc.againstMauricioA.Soriano,EnricoPalomarandRafaelContreras.

On April 18, 1958 Enrique Montinola sought to purchase from the Manila Post Office ten (10) money orders of
P200.00 each payable to E.P. Montinola withaddress at Lucena, Quezon. After the postal teller had made out
moneyordersnumbered124685,124687124695,Montinolaofferedtopayforthemwithaprivatecheckswere
notgenerallyacceptedinpaymentofmoneyorders,thetelleradvisedhimtoseetheChiefoftheMoneyOrder
Division,butinsteadofdoingso,Montinolamanagedtoleavebuildingwithhisowncheckandtheten(10)money
orderswithouttheknowledgeoftheteller.

Onthesamedate,April18,1958,upondiscoveryofthedisappearanceoftheunpaidmoneyorders,anurgent
messagewassenttoallpostmasters,andthefollowingdaynoticewaslikewiseserveduponallbanks,instructing
themnottopayanyoneofthemoneyordersaforesaidifpresentedforpayment.TheBankofAmericareceiveda
copyofsaidnoticethreedayslater.

On April 23, 1958 one of the abovementioned money orders numbered 124688 was received by appellant as
part of its sales receipts. The following day it deposited the same with the Bank of America, and one day
thereafterthelattercleareditwiththeBureauofPostsandreceivedfromthelatteritsfacevalueofP200.00.

On September 27, 1961, appellee Mauricio A. Soriano, Chief of the Money Order Division of the Manila Post
Office,actingforandinbehalfofhiscoappellee,PostmasterEnricoPalomar,notifiedtheBankofAmericathat
moneyorderNo.124688attachedtohisletterhadbeenfoundtohavebeenirregularlyissuedandthat,inview
thereof,theamountitrepresentedhadbeendeductedfromthebank'sclearingaccount.Foritspart,onAugust2
of the same year, the Bank of America debited appellant's account with the same amount and gave it advice
thereofbymeansofadebitmemo.

On October 12, 1961 appellant requested the Postmaster General to reconsider the action taken by his office
deductingthesumofP200.00fromtheclearingaccountoftheBankofAmerica,buthisrequestwasdenied.So
wasappellant'ssubsequentrequestthatthematterbereferredtotheSecretaryofJusticeforadvice.Thereafter,
appellantelevatedthemattertotheSecretaryofPublicWorksandCommunications,butthelattersustainedthe
actionstakenbythepostalofficers.

Inconnectionwiththeeventssetforthabove,MontinolawaschargedwiththeftintheCourtofFirstInstanceof
Manila(CriminalCaseNo.43866)butaftertrialhewasacquittedonthegroundofreasonabledoubt.

On January 8, 1962 appellant filed an action against appellees in the Municipal Court of Manila praying for
judgmentasfollows:
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WHEREFORE,plaintiffpraysthatafterhearingdefendantsbeordered:

(a)TocountermandthenoticegiventotheBankofAmericaonSeptember27,1961,deductingfrom
the said Bank's clearing account the sum of P200.00 represented by postal money order No.
124688, or in the alternative indemnify the plaintiff in the same amount with interest at 8% per
annumfromSeptember27,1961,whichistherateofinterestbeingpaidbyplaintiffonitsoverdraft
account

(b) To pay to the plaintiff out of their own personal funds, jointly and severally, actual and moral
damagesintheamountofP1,000.00orinsuchamountaswillbeprovedand/ordeterminedbythis
HonorableCourt:exemplarydamagesintheamountofP1,000.00,attorney'sfeesofP1,000.00,and
thecostsofaction.

Plaintiffalsopraysforsuchotherandfurtherreliefasmaybedeemedjustandequitable.

OnNovember17,1962,afterthepartieshadsubmittedthestipulationoffactsreproducedatpages12to15of
theRecordonAppeal,theabovenamedcourtrenderedjudgmentasfollows:

WHEREFORE, judgment is hereby rendered, ordering the defendants to countermand the notice
giventotheBankofAmericaonSeptember27,1961,deductingfromsaidBank'sclearingaccount
thesumofP200.00representingtheamountofpostalmoneyorderNo.124688,orinthealternative,
to indemnify the plaintiff in the said sum of P200.00 with interest thereon at the rate of 8% per
annum from September 27, 1961 until fully paid without any pronouncement as to cost and
attorney'sfees.

ThecasewasappealedtotheCourtofFirstInstanceofManilawhere,afterthepartieshadresubmittedthesame
stipulationoffacts,theappealeddecisiondismissingthecomplaint,withcosts,wasrendered.

The first, second and fifth assignments of error discussed in appellant's brief are related to the other and will
thereforebediscussedjointly.Theyraisethismainissue:thatthepostalmoneyorderinquestionisanegotiable
instrumentthatitsnatureassuchisnotinanywayaffectedbytheletterdatedOctober26,1948signedbythe
DirectorofPostsandaddressedtoallbankswithaclearingaccountwiththePostOffice,andthatmoneyorders,
once issued, create a contractual relationship of debtor and creditor, respectively, between the government, on
theonehand,andtheremitterspayeesorendorses,ontheother.

It is not disputed that our postal statutes were patterned after statutes in force in the United States. For this
reason,oursaregenerallyconstruedinaccordancewiththeconstructiongivenintheUnitedStatestotheirown
postalstatutes,intheabsenceofanyspecialreasonjustifyingadeparturefromthispolicyorpractice.Theweight
of authority in the United States is that postal money orders are not negotiable instruments (Bolognesi vs. U.S.
189 Fed. 395 U.S. vs. Stock Drawers National Bank, 30 Fed. 912), the reason behind this rule being that, in
establishing and operating a postal money order system, the government is not engaging in commercial
transactionsbutmerelyexercisesagovernmentalpowerforthepublicbenefit.

Itistobenotedinthisconnectionthatsomeoftherestrictionsimposeduponmoneyordersbypostallawsand
regulationsareinconsistentwiththecharacterofnegotiableinstruments.Forinstance,suchlawsandregulations
usuallyprovidefornotmorethanoneendorsementpaymentofmoneyordersmaybewithheldunderavarietyof
circumstances(49C.J.1153).

Of particular application to the postal money order in question are the conditions laid down in the letter of the
Director of Posts of October 26, 1948 (Exhibit 3) to the Bank of America for the redemption of postal money
ordersreceivedbyitfromitsdepositors.Amongothers,theconditionisimposedthat"incasesofadverseclaim,
themoneyorderormoneyordersinvolvedwillbereturnedtoyou(thebank)andthe,correspondingamountwill
have to be refunded to the Postmaster, Manila, who reserves the right to deduct the value thereof from any
amountdueyouifsuchstepisdeemednecessary."Theconditionsthusimposedinordertoenablethebankto
continueenjoyingthefacilitiestheretoforeenjoyedbyitsdepositors,wereacceptedbytheBankofAmerica.The
latteristhereforeboundbythem.Thatitissoisclearlyreferredfromthefactthat,uponreceivingadvicethatthe
amountrepresentedbythemoneyorderinquestionhadbeendeductedfromitsclearingaccountwiththeManila
PostOffice,itdidnotfileanyprotestagainstsuchaction.

Moreover,notbeingapartytotheunderstandingexistingbetweenthepostalofficers,ontheonehand,andthe
BankofAmerica,ontheother,appellanthasnorighttoassailthetermsandconditionsthereofonthegroundthat
thelettersettingforththetermsandconditionsaforesaidisvoidbecauseitwasnotissuedbyaDepartmentHead
inaccordancewithSec.79(B)oftheRevisedAdministrativeCode.Inreality,however,saidlegalprovisiondoes
notapplytotheletterinquestionbecauseitdoesnotprovideforadepartmentregulationbutmerelysetsdown
certain conditions upon the privilege granted to the Bank of Amrica to accept and pay postal money orders
presented for payment at the Manila Post Office. Such being the case, it is clear that the Director of Posts had
ampleauthoritytoissueitpursuanttoSec.1190oftheRevisedAdministrativeCode.

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In view of the foregoing, We do not find it necessary to resolve the issues raised in the third and fourth
assignmentsoferror.

WHEREFORE,theappealeddecisionbeinginaccordancewithlaw,thesameisherebyaffirmedwithcosts.

Concepcion,C.J.,Reyes,J.B.L.,Makalintal,Zaldivar,Fernando,Teehankee,BarredoandVillamor,JJ.,concur.

CastroandMakasiar,JJ.,tooknopart.

TheLawphilProjectArellanoLawFoundation

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