7/28/2019 Sesbreno v. CA
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Sesbreno v. Court of Appeals
Facts:Sesbreo made a money market placement in the amount of
P300,000.00 with the
Philifinance, with a term of 32 days. Philifinance issued Delta
Motors Corporation Promissory
Note ("DMC PN") No. 2731, the Certificate of Securities Delivery
Receipt indicating the sale of
the note with notation that said security was in the custody of
Pilipinas Bank, and postdated
checks drawn against the Insular Bank of Asia and America for
P304,533.33 payable on 13
March 1981. However, the checks were dishonored. Pilipinas Bank
never released the note,
nor any instrument related thereto, to Sesbreno; but Sesbreno
learned that the security which
was issued on April 10, 1980, maturing on 6 April 1981, has a
face value of P2,300,833.33
with PhilFinance as payee and Delta Motors as maker; and was
stamped non -negotiable on
its face. As Sesbreno was unable to collect his investment and
interest thereon, he filed an
action for damages against Delta Motors and Pilipinas Bank.
Delta Motors contents that saidpromissory note was not intended to
be negotiated or otherwise transferred by Philfinance as
manifested by the word "non-negotiable" stamped across the face
of the Note.
Issue:WON the non-negotiability of a promissory note prevents
its assignment.
Held:No. A non-negotiable instrument may not be negotiated but
may be assigned or transferred.The negotiation of a negotiable
instrument must be distinguished from theassignment or
transfer of an instrument whether that be negotiable or
non-negotiable. Only an instrument
qualifying as a negotiable instrument under the relevant statute
may be negotiated either by
indorsement thereof coupled with delivery, or by delivery alone
where the negotiable
instrument is in bearer form. A negotiable instrument may,
however, instead of being
negotiated, also be assigned or transferred. The legal
consequences of negotiation as
distinguished from assignment of a negotiable instrument are, of
course, different. A non-
negotiable instrument may, obviously, not be negotiated; but it
may be assigned or
transferred, absent an express prohibition against assignment or
transfer written in the face of
the instrument:The words "not negotiable," stamped on the face
of the bill of lading, did not
destroy its assignability, but the sole effect was to exempt the
bill from the
