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    (Digest) Philippine Education Co. Inc. v. Soriano

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    Liaa Aquino
    Philippine Education Co. filed a case after the Bank of America deducted P200 from its account, which represented the amount of a postal money order. The money order was one of 10 that a man obtained from the Manila Post Office using a private check, but then left without paying. All banks and post offices were notified not to honor the unpaid money orders. Philippine Education Co. received the money order as payment and deposited it, but it was later deducted from its account. The court held that postal money orders are not negotiable instruments under Philippine law because the government issues them to provide a public service rather than commercial transactions, and they have restrictions inconsistent with negotiable instruments. Therefore, Philippine Education Co. lost its

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    (Digest) Philippine Education Co. Inc. v. Soriano

    Uploaded by

    Liaa Aquino
    1K views1 page
    Philippine Education Co. filed a case after the Bank of America deducted P200 from its account, which represented the amount of a postal money order. The money order was one of 10 that a man obtained from the Manila Post Office using a private check, but then left without paying. All banks and post offices were notified not to honor the unpaid money orders. Philippine Education Co. received the money order as payment and deposited it, but it was later deducted from its account. The court held that postal money orders are not negotiable instruments under Philippine law because the government issues them to provide a public service rather than commercial transactions, and they have restrictions inconsistent with negotiable instruments. Therefore, Philippine Education Co. lost its

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    [Digest] Philippine Education Co. Inc. v. Soriano

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    [Digest] Philippine Education Co. Inc. v. Soriano

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    Philippine Education Co. filed a case after the Bank of America deducted P200 from its account, which represented the amount of a postal money order. The money order was one of 10 that a man obtained from the Manila Post Office using a private check, but then left without paying. All banks and post offices were notified not to honor the unpaid money orders. Philippine Education Co. received the money order as payment and deposited it, but it was later deducted from its account. The court held that postal money orders are not negotiable instruments under Philippine law because the government issues them to provide a public service rather than commercial transactions, and they have restrictions inconsistent with negotiable instruments. Therefore, Philippine Education Co. lost its

    Copyright:

    © All Rights Reserved
    Download as ODT, PDF, TXT or read online from Scribd
    Download as odt, pdf, or txt
    1K views1 page

    (Digest) Philippine Education Co. Inc. v. Soriano

    Uploaded by

    Liaa Aquino
    Philippine Education Co. filed a case after the Bank of America deducted P200 from its account, which represented the amount of a postal money order. The money order was one of 10 that a man obtained from the Manila Post Office using a private check, but then left without paying. All banks and post offices were notified not to honor the unpaid money orders. Philippine Education Co. received the money order as payment and deposited it, but it was later deducted from its account. The court held that postal money orders are not negotiable instruments under Philippine law because the government issues them to provide a public service rather than commercial transactions, and they have restrictions inconsistent with negotiable instruments. Therefore, Philippine Education Co. lost its

    Copyright:

    © All Rights Reserved
    Download as ODT, PDF, TXT or read online from Scribd
    Download as odt, pdf, or txt
    of 1

    Philippine_Education_Co._Inc._v.

    _Soriano
    FACTS: 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 with address at Lucena, Quezon. After the
    postal teller had made out money orders numbered 124685, 124687- 124695, Montinola offered to pay
    for them with a private check. As private checks were not generally accepted in payment of money
    orders, the teller advised him to see the Chief of the Money Order Division, but instead of doing so,
    Montinola managed to leave the building with his own check and the ten (10) money orders without the
    knowledge of the teller.
    On the same date, April 18, 1958, upon discovery of the disappearance of the unpaid money orders, an
    urgent message was sent to all postmasters, and the following day notice was likewise served upon all
    banks instructing them not to pay anyone of the money orders aforesaid if presented for payment. The
    Blank of America received a copy of said notice three days later.
    On April 23, 1958 one of the above mentioned money orders numbered 124688 was received by
    appellant (Philippine Education Co. Inc) as part of its sales receipts. The following day it deposited the
    same with the Bank of America, and one day thereafter the latter cleared it with the Bureau of Posts and
    received from the latter its face value of P200.00.
    On September 27, 1961, appellee Mauricio A. Soriano, Chief of the Money Order Division of the
    Manila Post Office, acting for and in behalf of his co-appellee, Post-master Enrico Palomar, notified the
    Bank of America that money order No. 124688 attached to his letter had been found to have been
    irregularly issued and that, in view thereof, the amount it represented had been deducted from the
    bank's clearing account. For its part, on August 2 of the same year, the Bank of America debited
    appellant's account with the same amount and gave it advice thereof by means of a debit memo.
    Philippine Education Co. filed a case to countermand the notice given to the Bank of America on
    September 27, 1961, deducting from 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 8-1/2% per annum. Appellant also asked for damages.
    MAIN ISSUE: Are postal money orders negotiable instruments?
    HELD: No, they are not. The weight of authority in the United States is that postal money orders are
    not negotiable instruments the reason behind this rule being that, in establishing and operating a postal
    money order system, the government is not engaging in commercial transactions but merely exercises a
    governmental power for the public benefit. It is to be noted in this connection that some of the
    restrictions imposed upon money orders by postal laws and regulations are inconsistent with the
    character of negotiable instruments. For instance, such laws and regulations usually provide for not
    more than one endorsement; payment of money orders may be withheld under a variety of
    circumstances.
    Therefore, appellant's contention that the money orders' nature is not in anyway affected by the letter
    dated October 26, 1948 signed by the Director of Posts and addressed to all banks with a clearing
    account with the Post Office, and that, money orders, once issued, create a contractual relationship of
    debtor and creditor, respectively, between the government, on the one hand, and the remitters payees or
    endorsees, on the other is false.

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