PECO vs. Soriano: Kool Kids 2016 - ALS 2D

PECO vs. Soriano from the bank’s clearing account.
The Bank of America debited

G.R. No. L-22405 | 39 SCRA 587 | June 30, 1971 | DIZON, J. (reduced) PECO’s account with the same account and give notice by
Petition: Appeal from a decision of the CFI of Manila dismissing complaint mean of debit memo.
filed by PECO against Soriano, et al.
Petitioners: Philippine Education Co., Inc. ISSUES
Respondents: Mauricio A. Soriano, et al. o W/N the Postal Money Order in question is a negotiable instrument. NO
Negotiable Instruments Law; Chapter 1: Form and Interpretation;
Section 8 RULING & RATIO
o Philippine postal statutes were patterned after statutes in force in the US.
DOCTRINE Therefore, they are generally construed in accordance with construction
• In establishing and operating a postal money order system, the given in the US to their own statutes.
government is not engaging in commercial transactions but merely o In the US, postal money orders are not negotiable instruments. This is
exercises a governmental power for public benefit. because in establishing and operating a postal money order system, the
government is not engaging in commercial transactions but merely
Civil Code Provision exercises a governmental power for public benefit.
Chapter 1: Form and Interpretation o Moreover, some restrictions on money orders by postal laws and
Section 8: The instrument is payable to order where it is drawn payable to regulations are inconsistent with the character of negotiable instruments.
the order of a specified person or to him or his order. It may be drawn • For example, (a) such laws usually provide for not more than 1
payable to the order of: endorsement and (b) payment of money orders may be withheld
(a) A payee who is not maker, drawer, or drawee; or under a variety of circumstances
(b) The drawer or maker; or o There was already an agreement between Bank of America and the
(c) The drawee; or Manila Post Office, that in case the post office would have an adverse
(d) Two or more payees jointly; or claim against any Bank of America depositor involving postal money
(e) One or some of several payees; or orders issued by the post office, all amounts cleared in relation thereto
(f) The holder of an office for the time being. shall be refunded back to the post office’s account with the bank. This in
Where the instrument is payable to order, the payee must be named or itself is already a limitation in the negotiability and nature of the postal
otherwise indicated therein with reasonable certainty. money orders issued by the post office because of the special conditions
attached.
FACTS
o Enrique Montinola sought to purchase from Manila Post Office 10 money DISPOSITION
orders of P200 each payable to E.P. Montinola with address at Lucena, o WHEREFORE, the appealed decision being in accordance with law, the
Quezon. Montinola offered to pay for the money orders with private same is hereby affirmed with costs.
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
Kool Kids 2016 | ALS 2D N-08-03 Peco v. Soriano.pdf
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PECO vs. Soriano from the bank’s clearing account.

The Bank of America debited

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