Republic of the Philippines Division, but instead of doing so, Montinola managed to

SUPREME COURT leave building with his own check and the ten(10) money
Manila orders without the knowledge of the teller.

EN BANC 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
G.R. No. L-22405 June 30, 1971 them not to pay anyone of the money orders aforesaid if
presented for payment. The Bank of America received a
PHILIPPINE EDUCATION CO., INC., plaintiff-appellant, copy of said notice three days later.
vs.
MAURICIO A. SORIANO, ET AL., defendant-appellees. On April 23, 1958 one of the above-mentioned money
orders numbered 124688 was received by appellant as
Marcial Esposo for plaintiff-appellant. part of its sales receipts. The following day it deposited the
same with the Bank of America, and one day thereafter the
Office of the Solicitor General Arturo A. Alafriz, Assistant latter cleared it with the Bureau of Posts and received from
Solicitor General Antonio G. Ibarra and Attorney the latter its face value of P200.00.
Concepcion Torrijos-Agapinan for defendants-appellees.
On September 27, 1961, appellee Mauricio A. Soriano,
Chief of the Money Order Division of the Manila Post
DIZON, J.: Office, acting for and in behalf of his co-appellee,
Postmaster Enrico Palomar, notified the Bank of America
An appeal from a decision of the Court of First Instance of that money order No. 124688 attached to his letter had
Manila dismissing the complaint filed by the Philippine been found to have been irregularly issued and that, in
Education Co., Inc. against Mauricio A. Soriano, Enrico view thereof, the amount it represented had been deducted
Palomar and Rafael Contreras. from the bank's clearing account. For its part, on August 2
of the same year, the Bank of America debited appellant's
On April 18, 1958 Enrique Montinola sought to purchase account with the same amount and gave it advice thereof
from the Manila Post Office ten (10) money orders of by means of a debit memo.
P200.00 each payable to E.P. Montinola withaddress at
Lucena, Quezon. After the postal teller had made out On October 12, 1961 appellant requested the Postmaster
money ordersnumbered 124685, 124687-124695, General to reconsider the action taken by his office
Montinola offered to pay for them with a private checks deducting the sum of P200.00 from the clearing account of
were not generally accepted in payment of money orders, the Bank of America, but his request was denied. So was
the teller advised him to see the Chief of the Money Order appellant's subsequent request that the matter be referred
to the Secretary of Justice for advice. Thereafter, appellant Plaintiff also prays for such other and further
elevated the matter to the Secretary of Public Works and relief as may be deemed just and equitable.
Communications, but the latter sustained the actions taken
by the postal officers. On November 17, 1962, after the parties had submitted the
stipulation of facts reproduced at pages 12 to 15 of the
In connection with the events set forth above, Montinola Record on Appeal, the above-named court rendered
was charged with theft in the Court of First Instance of judgment as follows:
Manila (Criminal Case No. 43866) but after trial he was
acquitted on the ground of reasonable doubt. WHEREFORE, judgment is hereby rendered,
ordering the defendants to countermand the
On January 8, 1962 appellant filed an action against notice given to the Bank of America on
appellees in the Municipal Court of Manila praying for September 27, 1961, deducting from said
judgment as follows: Bank's clearing account the sum of P200.00
representing the amount of postal money
WHEREFORE, plaintiff prays that after order No. 124688, or in the alternative, to
hearing defendants be ordered: indemnify the plaintiff in the said sum of
P200.00 with interest thereon at the rate of 8-
(a) To countermand the notice given to the % per annum from September 27, 1961 until
Bank of America on September 27, 1961, fully paid; without any pronouncement as to
deducting from the said Bank's clearing cost and attorney's fees.
account the sum of P200.00 represented by
postal money order No. 124688, or in the The case was appealed to the Court of First Instance of
alternative indemnify the plaintiff in the same Manila where, after the parties had resubmitted the same
amount with interest at 8-% per annum from stipulation of facts, the appealed decision dismissing the
September 27, 1961, which is the rate of complaint, with costs, was rendered.
interest being paid by plaintiff on its overdraft
account; The first, second and fifth assignments of error discussed
in appellant's brief are related to the other and will
(b) To pay to the plaintiff out of their own therefore be discussed jointly. They raise this main issue:
personal funds, jointly and severally, actual that the postal money order in question is a negotiable
and moral damages in the amount of instrument; that its nature as such is not in anyway affected
P1,000.00 or in such amount as will be proved by the letter dated October 26, 1948 signed by the Director
and/or determined by this Honorable Court: of Posts and addressed to all banks with a clearing account
exemplary damages in the amount of with the Post Office, and that money orders, once issued,
P1,000.00, attorney's fees of P1,000.00, and create a contractual relationship of debtor and creditor,
the costs of action.
respectively, between the government, on the one hand, if such step is deemed necessary." The conditions thus
and the remitters payees or endorses, on the other. imposed in order to enable the bank to continue enjoying
the facilities theretofore enjoyed by its depositors, were
It is not disputed that our postal statutes were patterned accepted by the Bank of America. The latter is therefore
after statutes in force in the United States. For this reason, bound by them. That it is so is clearly referred from the fact
ours are generally construed in accordance with the that, upon receiving advice that the amount represented by
construction given in the United States to their own postal the money order in question had been deducted from its
statutes, in the absence of any special reason justifying a clearing account with the Manila Post Office, it did not file
departure from this policy or practice. The weight of any protest against such action.
authority in the United States is that postal money orders
are not negotiable instruments (Bolognesi vs. U.S. 189 Moreover, not being a party to the understanding existing
Fed. 395; U.S. vs. Stock Drawers National Bank, 30 Fed. between the postal officers, on the one hand, and the Bank
912), the reason behind this rule being that, in establishing of America, on the other, appellant has no right to assail
and operating a postal money order system, the the terms and conditions thereof on the ground that the
government is not engaging in commercial transactions but letter setting forth the terms and conditions aforesaid is
merely exercises a governmental power for the public void because it was not issued by a Department Head in
benefit. accordance with Sec. 79 (B) of the Revised Administrative
Code. In reality, however, said legal provision does not
It is to be noted in this connection that some of the apply to the letter in question because it does not provide
restrictions imposed upon money orders by postal laws and for a department regulation but merely sets down certain
regulations are inconsistent with the character of conditions upon the privilege granted to the Bank of Amrica
negotiable instruments. For instance, such laws and to accept and pay postal money orders presented for
regulations usually provide for not more than one payment at the Manila Post Office. Such being the case, it
endorsement; payment of money orders may be withheld is clear that the Director of Posts had ample authority to
under a variety of circumstances (49 C.J. 1153). issue it pursuant to Sec. 1190 of the Revised
Administrative Code.
Of particular application to the postal money order in
question are the conditions laid down in the letter of the In view of the foregoing, We do not find it necessary to
Director of Posts of October 26, 1948 (Exhibit 3) to the resolve the issues raised in the third and fourth
Bank of America for the redemption of postal money orders assignments of error.
received by it from its depositors. Among others, the
condition is imposed that "in cases of adverse claim, the WHEREFORE, the appealed decision being in accordance
money order or money orders involved will be returned to with law, the same is hereby affirmed with costs.
you (the bank) and the, corresponding amount will have to
be refunded to the Postmaster, Manila, who reserves the
right to deduct the value thereof from any amount due you