13 November 1986, 145 SCRA 497


Jose Go, purchased from Associated Bank a cashier’s check. Unfortunately, he left said check on the top of the desk of the bank manager when he left the bank. The bank manager entrusted the check for safekeeping to a bank official, who had then a visitor in the person of Alexander Lim. The bank official had to answer a phone call on a nearby telephone after which he proceeded to the men’s room. When he returned to his desk, his visitor Lim was already gone.

When Go inquired for his cashier’s check from the bank official, the check was not in his folder and nowhere to be found. The bank official advised Go to go to the bank to accomplish a “STOP PAYMENT” order, which suggestion the latter immediately followed. He also executed an affidavit of loss. The bank official went to the police to report the loss of the check, pointing to the person of Alexander Lim as the one who could shed light on it.

The bank then received the check twice for clearing. For these two times, they dishonored the payment by saying that payment has been stopped. After the second time, a lawyer contacted it demanding payment. He refused to disclose the name of his client and threatened to sue. Later, the name of Mesina, herein petitioner, was revealed. When asked by the police on how he possessed the check, he said it was paid to him by Lim. An information for theft was then filed against Lim.

A case of interpleader was filed by the bank and Go moved to participate as an intervenor in the complaint for damages. Petitioner moved for the dismissal of the case but was denied. The trial court ruled in the interpleader case ordering the bank to replace the cashier’s check-in favor of Go.


Whether petitioner ca be considered as a holder in due course.


No, petitioner failed to substantiate his claim that he is a holder in due course and for consideration or value as shown by the established facts of the case.

Admittedly, petitioner became the holder of the cashier’s 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 cashier’s check who is not a holder in due course cannot enforce such check against the issuing bank which dishonors the same. If a payee of a cashier’s check obtained it from the issuing bank by fraud, or if there is some other reason why the payee is not entitled to collect the check, the respondent bank would, of course, have the right to refuse payment of the check when presented by the payee, since respondent bank was aware of the facts surrounding the loss of the check in question. The bank was therefore liable to nobody on the check but Jose Go.

When payment on it was therefore stopped, respondent bank was not the one who did it but Jose Go, the owner of the check. Respondent bank could not be drawer and drawee for clearly, Jose Go owns the money it represents and he is therefore the drawer and the drawee in the same manner as if he has a current account and he issued a check against it; and from the moment said cashier’s check was lost and/or stolen no one outside of Jose Go can be termed a holder in due course because Jose Go had not indorsed it in due course. The check in question suffers from the infirmity of not having been properly negotiated and for value by respondent Jose Go who as already been said is the real owner of said instrument.

*Case digest by Rezeile S. Morandarte, JD-IV, Andres Bonifacio College, SY: 2019-2020