YANG V.

COURT OF APPEALS
409 SCRA 159
FACTS:
Yang and Chandimari entered into an agreement that the latter would issue to the
former a managers 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 Yangs 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.
HELD:
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 isnt a holder in due coursefirst, because he took the checks without
valuable consideration; and second, he failed to inquire on Chandimaris 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 latters title to the checks was, if any, or the nature of his possession.