Mesina v.

IAC
No. L-70145
November 13, 1986
Secs. 56, 57 Holder in Due Course
FACTS: This case involves respondent Jose Go who purchased from Associated Bank
Cashiers Check for 800,000 PHPhe left the same check on the top desk of the bank
manager. The bank manager entrusted the check to an Albert Uy (bank official) who had
a visitor the same day who is Alexander Lim. When he left the desk, Lim was already
gone and so was the check. Jose Go after inquiring with the bank accomplished a STOP
PAYMENT order. Albert Uy went to the police to report the loss of the check, pointing
to the person of Alexander Lim. The police reported that they received the lost checks for
clearing from Prudential Bankwhich was dishonored by Associate Bank. Respondent
Associate Bank immediately dishonored the check prompting a certain Atty. Lorenzo
Navarro to demand payment for the cashiers check in question, which was being held by
his client. The lawyer refused to reveal the name of his client and threatened to sue if
payment is not made. After the bank denied revealing the person who tried to encash, the
complaint has been substituted from a John Doe to a Marcelo Mesina, herein petitioner.
According to Mesina, he came to possess the check since an Alexander Lim paid it to him
he failed to elucidate further what kind of transaction is it.
ISSUES: Whether the IAC erred in ruling that a cashiers check can be countermanded
even in the hands of a holder in due course.
HELD: NO, petitioner is not a holder in due course. Petitioner failed to substantiate his
claim that he is a holder in due course and for consideration or value as shown
established facts of the case. Admittedly, petitioner became the holder of the cashiers
check as endorsed by Alexander Lim who stole the check. He refused to say how and
why it was passed to him. He had therefore notice of the defect of his title over the check
from the start. The holder of a cashiers check who is not a holder in due course cannot
enforce such check against the issuing bank, which dishonors the same. If a payees
cashiers check was obtained from issuing bank by fraud, or if there is some other reason
why the payee is not entitled to collect the check, the respondent bank have the right to
refuse payment. The bank was liable to nobody on the check but Jose Go, the owner of
the check.