409 SCRA 159



Yang and Chandimari entered into an agreement that the latter would issue to the former a manager’s check in exchange for two checks that Yang has payable  to  the  order  of  David.    The  difference  in  amount  would  be  the profit  of  the  two  of  them.    It  was  further  agreed  upon  that  Yang  would
secure a dollar draft, which Chandimari would exchange with another dollar draft  to  be  secured  from  a  Hong  Kong  bank.    At  the  agreed  time  of rendezvous,  it  was  reported  by  Yang’s  messenger  that  Chandimari  didn't show up and the drafts and checks were allegedly stolen.  This wasn't true however.  Chandimari was able to get hold of the drafts and checks.  He was  even  able  to  deliver  to  David  the  two  checks  and  was  able  to  get money in return.  Consequently, Yang asked for the stoppage of payment of  the  checks  she  believe  to  be  lost,  relying  on  the  report  of  her messenger.  The stoppage order was eventually lifted by the banks and the drafts and checks were able to be encashed.  Yang then filed an action for injunction  and  damages  against  the  banks,  Chandimari  and  David.    The
trial court and CA held in favor of David as a holder in due course.  


Every holder of a negotiable instrument is presumed to be a holder in due course.  This is specially true if one is a holder because he is the payee or indorsee of the instrument.  In the case at bar, it is evident that David was the  payee  of  the  checks.    The  prima  facie  presumption  of  him  being  a holder  in  due  course  is  in  his  favor.    Nonetheless,  this  presumption  is disputable.  On whether he took the check under the conditions set forth in Section  52  must  be  proven.    Petitioner  relies  on  two  arguments  on  why
David  isn’t  a  holder  in  due  course—first,  because  he  took  the  checks without  valuable  consideration;  and  second,  he  failed  to  inquire  on Chandimari’s title to the checks given to him. 
The law gives rise to the presumption of valuable consideration.  Petitioner has  the  burden  of  debunking  such  presumption,  which  it  failed  to  do  so.  Her  allegation  that  David  received  the  checks  without  consideration  is unsupported and devoid of any evidence.
Furthermore, petitioner wasn't able to show any circumstance which should have placed David in inquiry as to why and wherefore of the possession of the  checks  by  Chandimari.    David  wasn't  a  privy  to  the  transactions between  Yang  and  Chandimari.    Instead,  Chandimari  and  David  had  the agreement between themselves of the delivery of the checks.  David even inquired with the banks on the genuineness of the checks in issue.  At that time, he wasn't aware of any request for the stoppage of payment.  Under
these circumstances, David had no obligation to ascertain from Chandimari what the nature of the latter’s title to the checks was, if any, or the nature of his possession.