ABUBAKAR vs. THE AUDITOR GENERAL - G.R. No. L-1405

BENJAMIN ABUBAKAR vs. THE AUDITOR GENERAL

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

Treasury Warrant A-2867376 was issued in favor of Placide S. Urbanes on 10 December 1941 for P1,000, but is now in the hands of Benjamin Abubakar. The Auditor refused to authorize the payment of the treasury warrant. Abubakar contends that he is a holder in good faith and for value and thus, entitled to the rights and privileges of a holder in due course.

Issue: Whether or not Abubakar is a holder in due course.

Held: A treasury warrant is not a negotiable instrument; it being an order for payment out of a “particular fund”, and is not unconditional and does not fulfill one of the essential requirements of a negotiable instrument. Therefore, a holder of a treasury warrant cannot argue that he is a holder in good faith and for value of a negotiable instrument and thus entitled to the rights and privileges of a holder in due course, free from defenses.