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, the Lim was
already gone and so was the check. Jose Go after inquiring with the bank he
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 revealed 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 it was paid to him by an Alexander Limhe 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. Admittedly, petitioner became the holder of the cashiers check as
endorsed by Alexander Lim who stole the check. He refused to saw 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.