Abubakar v.

Auditor General
G.R. No. L-1405
July 31, 1948

Facts:

In 1941, a treasury warrant was issued in favor of Placido Urbanes, a government employee in the
province of La Union. The said treasury warrant was meant to augment the Food Production Campaign in
the said province. It was then negotiated by Urbanes to Benjamin Abubakar, a private individual. When
Abubakar sought to have the treasury warrant encashed, the Auditor General denied payment because
first of, it is against the appropriating law (Republic Act 80) to authorize payments to private individuals
when it comes to treasury warrants. Abubakar then contends that he is entitled to encash as he was a
holder in good faith.

ISSUE:
Whether or not a treasury warrant is a negotiable instrument.

HELD: No. A treasury warrant is not a negotiable instrument. One of the requirements of a negotiable
instrument is that it must be unconditional. In Section 3 of the Negotiable Instruments Law, an order or
promise to pay out of a particular fund makes the instrument conditional. A treasury warrant, like the one
in this case, comes from a particular fund, a particular appropriation. In this case, it was written on the
face of the treasury warrant that it is “payable from the appropriation for food administration”. Thus, it is
not negotiable for being conditional.