Facts: In Civil Case, Private Respondent sued Petitioner in his official capacity as Superintendent of Schools in Cebu City. It appears that Private Respondent had extended loans to public school teachers in Cebu City and the teachers concerned executed promissory notes and special powers of attorney in favor of Private Respondent to take and collect their salary checks from the Division Office in Cebu City of the Bureau of Public Schools. However, Petitioner forbade the collection of the checks on the basis of Circular No. 21, series 1969, dated December 5, 1969, of the Director of Public Schools which Prohibiting the payment of salary to persons other than the employee concerned. Private Respondent sought to compel Petitioner to honor the special powers of attorney; to declare Circular No. 21 to be illegal; and to make Petitioner pay attorney’s fees and damages. The trial court granted the prayer of Private Respondent but the claim for money was disallowed on the ground that he acted in good faith in implementing Circular No. 21. Petitioner now seeks in this petition for review a reversal of the trial court’s decision.
Issue: Whether Circular No. 21 is valid, enforceable and does not violate the Non-impairment Clause?
Held: Yes, the court answer is in the affirmative. The salary check of a government officer or employee such as a teacher does not belong to him before it is physically delivered to him. Until that time the check belongs to the Government. Accordingly, before there is actual delivery of the check, the payee has no power over it; he cannot assign it without the consent of the Government. On this basis Circular No. 21 stands on firm legal footing. Private Respondent’s claim that the Circular impairs the obligation of contracts with the teachers is baseless. For the Circular does not prevent the Private Respondent from collecting the loans. The Circular merely makes the Government a non-participant in their collection which is within its competence to do.
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