Emergency Recit:

AVELINO is the president of Violago Motor Sales Corporation (VMSC). AVELINO sold a car to spouses PEDRO
and FLORENCIA. Terms were that spouses would pay down payment and the balance would be paid
through BA Finance. Spouses executed a Promissory Note in favor of VMSC plus chattel mortgage on car. Deed
of Assignment from VMSC in favor of BA Finance. Spouses didn’t know that AVELINO sold and delivered the
car to another cousin, ESMERALDO. Since they didn’t get the car, they stopped paying BA Finance. BA Finance
filed a case in the RTC against spouses and Avelino. Found the spouses guilty but are entitled to be repaid by
Avelino. CA said that the PN was a negotiable instrument & that BA finance was a holder in due course. Spouses
insist that BA Finance is not a holder in due course. SC held that in order to determine if BA Finance is a
holder in due course, it must determine first if the promissory note is a negotiable instrument covered by NIL.
ISSUE: Is a PN a negotiable instrument? YES. All the requisites of a negotiable instrument are present.