Block B 2017 Digests

Negotiable Instruments, Section 1

SERRANO v CA
G.R. No. 45125, April 22, 1991

This is a Petition for Review seeking the reversal of the CAs findings that there was no negligence
imputable to Yu An Kiong (owner of Long Life Pawnshop) as basis for an award of damages

Facts
Loreta Serrano (petitioner) bought pieces of jewelry for P48,500 from Niceta Ribaya
After a few weeks, as Serrano was in need of money, she instructed Josefine Rocco, her secretary,
to pawn the jewelry
Rocco went to Long Life Pawnshop, Inc. (private respondent) and pledged the jewelry for P22,000;
she then absconded with the money and pawn ticket
o Yu An Kiong, principal owner and General Manager transacted with Rocco
o The pawnshop ticket stipulated that it was redeemable on presentation by the bearer
Three months after the incident, Ribaya was informed that a pawnshop ticket issued by Long Life,
covering the jewelry she once owned, was being offered for sale
Ribaya then informed Serrano, who went to the pawnshop and verified that it was indeed her
missing jewelry; she then told Yu An Kiong not to let anyone redeem the jewelry as she was the
rightful owner
o Serrano claims Yu An Kiong agreed
After Serrano filed a complaint for Estafa against Rocco at the Manila Police Department, Detective
Corporal Oswaldo Mateo claims to have gone to the pawnshop, showed Yu An Kiong petitioners
report and left the latter a note asking him to hold the jewelry and notify the police in case someone
should redeem the same
The next day, Yu An Kiong permitted one Tomasa de Leon, who had the pawnshop ticket, to
redeem the jewelry
Serrano filed a complaint with the then Court of First Instance of Manila for damages against Long
Life for failure to hold the jewelry
o CFI decided in favor of Serrano
o CA reversed CFI decision and ruled there was no negligence on the part of Yu An Kiong

Issue
Whether or not Yu An Kiong is absolved from liability since the pawnshop ticket stated that it was
redeemable on presentation by the bearer

Held
No. Having been notified by petitioner and the police that jewelry pawned to it was either stolen or involved
in an embezzlement of the proceeds of the pledge, private respondent pawnbroker became duty bound to
hold the things pledged and to give notice to petitioner and the police of any effort to redeem them. Such a
duty was imposed by Art. 21, Civil Code (ANY PERSON WHO WILFULLY CAUSES LOSS OR INJURY TO ANOTHER IN A MANNER THAT
IS CONTRARY TO MORALS, GOOD CUSTOMS OR PUBLIC POLICY SHALL COMPENSATE THE LATTER FOR THE DAMAGE). The circumstance
that the pawn ticket stated that the pawn was redeemable by the bearer, did not dissolve that duty. The pawn
ticket was not a negotiable instrument under the Negotiable Instruments Law. Respondent pawnbroker
acted in reckless disregard of its duty in the instant case and must bear the consequences, without prejudice
to its right to recover damages from Josefina Rocco.

WHEREFORE, the decision of the RTC, holding that the petitioner may claim damages from the
respondent for failure to hold the jewelry and for allowing its redemption, is reinstated in toto.