CASE DIGEST:

FACTS: Petitioner brought a car from Viologo Motor Sales Company, which was
secured by a promissory note, which was later on indorsed to Filinvest Finance,
which financed the transaction. Petitioner later on defaulted in her installment
payments, allegedly due to the fraud imputed by VMS in selling her a different
vehicle from what was agreed upon. This default in payment prompted Filinvest
Finance to initiate a case against petitioner. The trial court decided in favor of
Filinvest, to which the appellate court upheld by increasing the amount to be paid.
It is the contention of petitioner that since the agreement between her and
the motor company was inexistent, none had been assigned in favor of private
respondent.
HELD: Petitioners liability on the promissory note, the due execution and
genuineness of which she never denied under oath, is under the foregoing factual
milieu, as inevitable as it is clearly established.
The records reveal that involved herein is not a simple case of assignment
of credit as petitioner would have it appear, where the assignee merely steps into
the shoes of, is open to all defenses available against and can enforce payment only
to the same extent as the assignor-vendor.
The instrument to be negotiable must contain the so-called words of
negotiability. There are only 2 ways for an instrument to be payable to order. There
must always be a specified person named in the instrument and the bill or note is to
be paid to the person to whom he has indorsed and delivered the same. Without
the words or order or to the order of, the instrument is payable only to the
person designated therein and is thus non-negotiable. Any subsequent purchaser
thereof will not enjoy the advantages of being a holder in due course but will merely
step into the shoes of the person designated in the instrument and will thus be open
to the defenses available against the latter.
In the case at bar, the promissory notes is earmarked with negotiability and
Filinvest is holder in due course.