Ur-digest (1).docx

VICENTE R. DE OCAMPO & CO. v. ANITA GATCHALIAN. G.R. No. L-15126. November 30, 1961. FACTS: Anita Gatchalian was interested in buying a car. Manuel Gonzales offered to her a car owned by plaintiff De Ocampo. Gonzales claimed that he was authorized by the plaintiff to sell the car. Gonzales ordered defendant to issue a cross-check to comply on showing interest in buying the car. Gonzales promised to return the check the next day. When Gonzales did not appear the day after, defendant issued a stop payment order on the check. She later found out that Gonzales used the check as payment to plaintiff De Ocampo’s clinic for his wife's fees. Plaintiff now demands defendant for payment of the check, in which defendant refused, citing that plaintiff is not a holder in due course.

ISSUE: Whether

or

not

plaintiff

De

Ocampo

is

a

holder

in

due

course.

HELD: The SC held that plaintiff is a not a holder in due course. Section 52 of the Negotiable Instruments Law provides that, A holder in due course is a holder who has taken the instrument under the following conditions: (a) That it is complete and regular upon its face; (b) That he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was the fact; (c) That he took it in good faith and for value; (d) That at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it. The Court ruled that there were circumstances that should have put plaintiff to inquiry as to the why and wherefore of the possession of the check by Manuel Gonzales, and why he used it to pay Matilde's account. These include the fact that appellants had no obligation or liability to the Ocampo Clinic; that the amount of the check did not correspond exactly with the obligation of Matilde Gonzales to Dr. V. R. de Ocampo; and that the check had two parallel lines in the upper left hand corner, which practice means that the check could only be deposited but may not be converted into cash. It was the payee's duty to ascertain from the holder Manuel Gonzales what the nature of the latter's title to the check was or the nature of his possession. Having failed in this respect, the Court declared that plaintiff was guilty of gross neglect in not finding out the nature of the title and possession of Manuel Gonzales, amounting to legal absence of good faith, and it may not be considered as a holder of the check in good faith.

State Investment House Inc. vs. CA GR No. 101163 January 11, 1993 Facts: Nora Moulic issued to Corazon Victoriano, as security for pieces of jewelry to be sold on commission, two postdated checks in the amount of fifty thousand each. Thereafter, Victoriano negotiated the checks to State Investment House, Inc (State). When Moulic failed to sell the jewelry, she returned it to Victoriano before the maturity of the checks. The checks, however, could no longer be retrieved as they had already been negotiated to State. Before the maturity date, Moulic withdrew her funds from the bank. Upon presentment of State of the checks to the bank, the checks were dishonored for insufficiency of funds. State sued to recover the value of the checks. Moulic, on the other hand, contends that she incurred no obligation on the checks because the jewelry was never sold and that the checks were negotiated without her knowledge and consent. Issues: Whether or not State Investment House Inc. was a holder of the check in due course. Held: Yes, Section 52 of the NIL provides what constitutes a holder in due course. The evidence shows that: on the faces of the post dated checks were complete and regular; that State Investment House Inc. bought the checks from Victoriano before the due dates; that it was taken in good faith and for value; and there was no knowledge with regard that the checks were issued as security and not for value. A prima facie presumption exists that a holder of a negotiable instrument is a holder in due course. Moulic failed to prove the contrary.