1. Phil. Educ. Co., Inc.

vs 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. After the postal teller had made out money orders
numbered 124685, 124687-124695, Montinola offered to pay for them with a 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 building with his own check and the 10 money
orders without the knowledge of the teller.
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
Bank of America received a copy of said notice three days later. The Bank of America received a copy of
the notice but it was already deposited to the appellants account upon clearance. Mauricio Soriano, Chief
of the Money Order Division notified the Bank of America that what had been deposited were irregularly
issued and due to this Bank of America deducted the same in their clearing account and debited it to
appellants account and gave notice by means of debit memo.

Issue: Whether or not postal money orders are negotiable instruments.

Held: No, postal money orders are not negotiable instruments.

It is not disputed that our postal statutes were patterned after statutes in force in the United States. For this
reason, ours are generally construed in accordance with the construction given in the United States to their
own postal statutes, in the absence of any special reason justifying a departure from this policy or practice.
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.
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 orders received by it from its depositors. Among others, the condition is imposed that "in cases of
adverse claim, the money order or money orders involved will be returned to 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 if such step is deemed necessary." The conditions thus imposed
in order to enable the bank to continue enjoying the facilities theretofore enjoyed by its depositors, were
accepted by the Bank of America. The latter is therefore bound by them. That it is so is clearly referred from
the fact that, upon receiving advice that the amount represented by the money order in question had been
deducted from its clearing account with the Manila Post Office, it did not file any protest against such action.
2. Philippine Airlines vs CA
Facts: Amelia Tan filed a complaint for damages against PAL. The latter lost and when the judgment
became final and executory in the CA, it was remanded to the trial court for execution. Tan filed a motion
for the issuance of a writ of execution of judgment which was granted. The judgment, however, remained
unsatisfied.
Months later, Tan moved for the issuance of an alias writ of execution. PAL filed an opposition to the
motion on the ground that it had already fully paid its obligation to plaintiff through the deputy sheriff of the
respondent court as evidenced by a check issued in the name of the sheriff.

Issue: Whether or not the check payment made and addressed to the sheriff by PAL constitute as
satisfaction of judgment.

Held: No, it did not constitute as satisfaction of judgment.

In the absence of an agreement, either express or implied, payment means the discharge of a debt
or obligation in money and unless the parties so agree, a debtor has no rights, except at his own peril, to
substitute something in lieu of cash as medium of payment of his debt. Consequently, unless authorized to
do so by law or by consent of the obligee a public officer has no authority to accept anything other than
money in payment of an obligation under a judgment being executed. Strictly speaking, the acceptance by
the sheriff of the petitioner's checks, in the case at bar, does not, per se, operate as a discharge of the
judgment debt.
Since a negotiable instrument is only a substitute for money and not money, the delivery of such an
instrument does not, by itself, operate as payment. A check, whether a manager's check or ordinary check,
is not legal tender, and an offer of a check in payment of a debt is not a valid tender of payment and may
be refused receipt by the obligee or creditor. Mere delivery of checks does not discharge the obligation
under a judgment. The obligation is not extinguished and remains suspended until the payment by
commercial document is actually realized.
3. Metropolitan Bank & Trust Company vs CA
Facts: In January 1979, Eduardo Gomez opened an account with Golden Savings and deposited over a
period of 2 months 38 treasury warrants marked non-negotiabledrawn by the Philippine Fish Marketing
Authority signed and countersigned by its general manager and auditor. Six of them were payable to
Gomez, while the rest made him second indorser. From June 25 to July 16, 1979, these warrants were
subsequently indorsed to Gloria Castillo, Cashier of Golden Savings and deposited with its account in
Metrobank. They were then sent for clearing by the branch office to the principal office of Metrobank which
forwarded them to the Bureau of Treasury.

Castillo often went several times to the Metrobank branch to where it was deposited to ask if they
were cleared. She was told to wait, while Gomez was not allowed to withdraw from his account. However,
due to Castillos repeated inquiries, according to Metrobank, it finally gave in and allowed Golden Savings
to withdraw. Hence, Golden Savings also allowed Gomez to finally make withdrawals from his own account.
However, on July 21, 1979, Metrobank informed Golden Savings that 32 of the warrants had been
dishonored. Metrobank demanded a refund, but such demand was rejected which prompted Metrobank to
file a case against Golden Savings.

Issue: Whether or not the treasury warrants are negotiable instruments.

Held:

No, treasury warrants are not negotiable instruments. Clearly stamped in the instrument are the
words non-negotiable. Furthermore, in order for an instrument to be negotiable, it must conform to the
requisites stated in Section 1 of the Negotiable Instruments Law. Such instrument must be unconditionally
made and does not arise from a particular fund. In this case the treasury warrants are not unconditional
and are actually made out of a particular fund. In fact, it was even marked non-negotiable on its face. Hence,
treasury warrants are not negotiable instruments.