Lessons Applicable: Rights of the holder (Negotiable Instruments Law)
FACTS:
- Sept 8 1953 evening: Anita C. Gatchalian was looking for a car for the use of her husband and the family and Manuel Gonzales who was accompanied by Emil Fajardois (personally known to Anita) offered her a car
- Manuel Gonzales represented to defendant Anita that he was duly authorized by Ocampo Clinic, the owner of the car, to look for a buyer and negotiate for and accomplish the sale, but which facts were not known to Ocampo
- September 9 1953
- Anita requested Manuel to bring the car the day following together with the certificate of registration of the car so that her husband would be able to see same
- Manuel Gonzales told her that unless there is a showing that the party interested in the purchase is ready he cannot bring the certificate of registration
- Anita gave him a check which will be shown to the owner as evidence of buyer's GF in the intention to purchase, it being for safekeeping only of Manuel and to be returned
- For the hospitalization of the wife of Manuel, he paid the check to Ocampo clinic
- P441.75 - payment of said fees and expenses
- P158.25 -given to Manual as balance
- Next Day: Manual did not appear so Anita issued a stop payment order
- Anita filed with the Office of the City Fiscal of Manila, a complaint for estafa against Manuel
- Appeal Manuel contends that:
- the check is not a negotiable instrument, under the facts and circumstances stated in the stipulation of facts - no delivery (Section 16, Negotiable Instruments Law) because only for safekeeping (conditional delivery)
- Ocampo is not a holder in due course
- no negotiation prior to acquiring the check
- check is not a personal check of Manuel
- could have inquired why a person would use the check of another to pay his own debt, Gatchalian being personally acquainted with V. R. de Ocampo
ISSUES:
- W/N Ocampo is a holder in due course - NO
- W/N prima facie holder in due course applies - NO
HELD:
- NO
- Sec. 191
- holder - payee or indorsee of a bill or note, who is in possession of it, or the bearer
- Sec. 52
- holder in due course - holder who has taken the instrument under the ff conditions:
- That it is complete and regular on its face
- That he became the holder of it before it was overdue, and without notice that it had been previously dishonored, it such was the fact.
- That he took it in good faith and for value.
- 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
- circumstances
- the amount of the check did not correspond exactly with the obligation of Matilde Gonzales to Dr. V. R. de Ocampo
- 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 payee's duty to ascertain from the holder Manuel what the nature of his title to the check was or the nature of his possession. - failure: guilty of gross neglect and legal absence of GF
- In order to show that the defendant had 'knowledge of such facts that his action in taking the instrument amounted to BF it is not necessary to prove that the defendant knew the exact fraud
- It is sufficient that the buyer of a note had notice or knowledge that the note was in some way tainted with fraud
2. NO
- Sec. 59
- every holder is deemed prima facie to be a holder in due course
- a possessor of the instrument is prima facie a holder in due course does not apply because there was a defect in the title of the holder (Manuel Gonzales) because the instrument is not payable to him or to bearer.
- suspicious circumstance