Philippine Education Co. vs.

Soriano

L-22405 June 30, 1971

Dizon, J.:

Facts:
Enrique Montinola sought to purchase from Manila Post Office ten money orders of
200php each payable to E. P. Montinola. Montinola offered to pay with the money orders with a
private check. Private check 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 without the knowledge of the teller. Upon the disappearance of the
unpaid money order, a message was sent to instruct all banks that it must not pay for the money
order stolen upon presentment. The Bank of America received a copy of said notice. However,
The Bank of America received the money order and deposited it to the appellant’s account upon
clearance. Mauricio Soriano, Chief of the Money Order Division notified the 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 from the bank’s clearing account. The Bank of America debited
appellant’s account with the same account and give notice by mean of debit memo.

Issue:
Whether or not the postal money order in question is a negotiable instrument

Held:
No. It is not disputed that the Philippine postal statutes were patterned after similar statutes in
force in United States. The Weight of authority in the United States is that postal money orders are
not negotiable instruments, the reason being that in establishing and operating a postal money
order system, the government is not engaged in commercial transactions but merely exercises a
governmental power for the public benefit. Moreover, 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.
BPI vs ROYECA (GR No. 176664)

FACTS: Spouses Royeca executed and delivered apromissory note to Toyota Shaw and to secure
thepayment of this promissory note, they executed aChattel mortgage over a motor vehicle.
However,Toyota transferred the title and rights of this vehicleto Far East Bank and Trust Company
(FEBTC). FEBTCfiled a Complaint for Replevin and Damages againstthe Royecas for refusing to pay the
monthlyamortizations.

ISSUES:1. WON Royecas were able to prove full payment oftheir obligation

2. WON tender of checks constitutes payment.

HELD:1. NO. As a general rule, one who pleads payment hasthe burden of proving it. The debtor
(Royecas) hasthe burden of showing with legal certainty that theobligation has been discharged by
payment.Acknowledgment Receipt was the only proof thatRoyecas delivered the checks for payment. It
wasnot a sufficient proof of payment.Moreover, Royecas had to present proof, not onlythat they delivered
the checks to the petitioner, butalso that the checks were encashed. They failed todo so. Had the checks
been actually encashed, theycould have easily produced the cancelled checks asevidence to prove the
same.A promissory note in the hands of the creditor is aproof of indebtedness rather than proof of
payment.

2. NO. A check is not legal tender and, therefore,cannot constitute a valid tender of payment. Since
anegotiable instrument is only a substitute for moneyand not money, the delivery of such an
instrumentdoes not, by itself, operate as payment. Theobligation is not extinguished and
remainssuspended until the payment by commercialdocument is actually realized.Preponderance of
evidence: evidence which is moreconvincing to the court as worthy of belief than thatwhich is offered in
opposition thereto.REPLEVIN: an action to recover personal propertysaid or claimed to be unlawfully
taken.