Serrano vs.

CA
22 April 1991
GR 45125
Ponente:
Petitioner/s:
Respondent/s:

Feliciano, J.
Loreta Serrano
Court of Appeals and Long Life Pawnshop, Inc.

Petitioner Loreta Serrano pawned 48,500 worth of jewelry to respondent Long Life
Pawnshop, Inc. This was done through her secretary, Josefina Rocco. Josefina pawned
the said items for 22,000 and absconded with the amount and pawn ticket.
In the original case, petitioner Loreta Serrano filed a complaint for qualified theft and
later changed to estafa against Josefina Rocco. She also filed a case for damages against
Long Life for failure to hold the jewelry as Yu An Kiong (Pawnbroker and GM of Long
Life) permitted a certain Tomasa de Leon to redeem it as she had the appropriate
pawn ticket.
CFI Manila rendered a decision in favor of the petitioner.
The CA reversed this on appeal and dismissed the complaint.
In this petitioner for review, the SC reversed the CA decision and reinstated the trial
court decision .
FACTS:
Petitioner Loreta Serrano purchased jewelry from Niceta Ribaya worth 48,500.
She then pawned this through her secretary Josefina Rocco, who absconded
with the amount and the pawn ticket which stipulated that it was
redeemable on presentation of the bearer.
Loreta was then informed 3 months later that the same ticket was being sold
by Long Life Pawnshop.
She proceeded to the shop and informed the Pawnbroker and GM of Long
Life, Yu An Kiong, of her predicament and asked him to hold on to the
jewelry.
Petitioner went to the Manila Police Department to report the loss and file a
complaint for qualified theft which was later changed to Estafa against Rocco
On the same day, Detective Mateo went to the pawnshop and informed the
Pawnbroker of the complaint and asked the latter to notify the police in case
the jewelry was redeemed
However, the day after, the GM permitted a certain Tomasa de Leon to
redeem the Jewelry as she was holding the appropriate pawnshop ticket,
to redeem the jewelry
Petitioner filed a complaint with the CFI for damages against Long life
o Trial Court decision in favor of petitioner. Damages awarded.
o CA reversed decision. And complaint was dismissed
Petitioner filed this petition for review seeking for reversal of CA findings
relating to the credibility of witnesses and to restore the trial courts decision

ISSUE/S:
1. Whether the CA committed an error when they reversed the RTC decision YES
2. Whether the pawn ticket was a negotiable instrument under RA 2031 or the
Negotiable Instruments Law1 (NIL) - NO
HELD:
1. YES, the CA committed a reversible error.
The SC found that the CAs rejection of the testimony of petitioner and
Detective Mateo as well as for faulting Loreta for failing to report the said loss
of jewelry immediately was erroneous as Rocco had simply disappeared with
the money and ticket.
Also, the petitioner had no way to know whether the jewelry was
misappropriated. Additionally, the CAs reliance on the lack of evidence for
the notice given to Yu An Kiong was of no great importance.
Additionally, the SC held that the burden of proof had been discharged by
petitioner, and that it was credible.
2.

No the pawn ticket was not a Negotiable Instrument under the

Negotiable Instruments Law
Yu An Kiong, the pawnbroker, was informed by both the petitioner and police
that the jewelry was stolen or involved in an embezzlement of the proceeds of
the pledge. Thus, he became duty bound (imposed by Art 21 of the Civil
Code) to hold the jewelry and give notice to both the Loreta and the police.
That the pawn ticket stated that the pawn was redeemable by the
bearer, did not dissolve this duty.
Lastly, the SC held that the pawn ticket was not a Negotiable
Instrument under the NIL. Nor was it a Negotiable Document under
Article 1507 of the Civil Code.

RULING: Petition is granted. CFI decision reinstated.

1Negotiable

Instruments Law (RA 2031)

Section 1. Form of negotiable instruments.
An instrument to be negotiable must conform to the following requirements:
(a) It must be in writing and signed by the maker or drawer;
(b) Must contain an unconditional promise or order to pay a sum certain in money;
(c) Must be payable on demand, or at a fixed or determinable future time;
(d) Must be payable to order or to bearer; and
(e) Where the instrument is addressed to a drawee, he must be named or otherwise
indicated therein with reasonable certainty.
Prepared by : Alegre, Kristine Joyce