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Can the check be considered a valid payment of the judgment obligation?

Yes. In commercial Transaction Cashiers Check is deemed cash. When the check has been certified by the drawee bank, this
certification implies that the check is sufficiently funded in the drawee bank and the funds will be applied whenever the check is
presented for payment. The object of certifying a check is to enable the holder to use it as money. When the holder procures the check
to be certified, it operates as an assignment of a part of the funds to the creditors. Hence, the exception provided in Section 63 of the
Central Bank Act which states that checks which have been cleared and credited to the account of the creditor shall be equivalent to a
delivery to the creditor in cash the amount equal to that which is credited to his account. The Cashiers Check and the cash are valid
payment of the obligation. The private respondent has no valid reason to refuse the acceptance of the check and cash as full payment
of the obligation
What is a cashiers check? An instrument may be a check even though it is described on its face by another term,
such as "money order."


Whether or not acceptance is equivalent to Payment?
No. A check is a bill of exchange payable on demand and only the rules governing bills of exchage payable on
demand are applicable to it. Acceptance is a step unnecessary for bills of exchange payable on demand. Acceptance
implies, subsequent negotiation of the instrument from the moment a check is paid it is withdrawn from circulation.
That the paymen of a check does not include or imply its acceptance in the sense that this word is used in section
62 of the Negotiable Instrument Law. Payment in checks, the final act which extinguishes a bill. Acceptance in
certified checks is a promise to pay in the future and continues the life of the bill.
W/N law or business practice prevents the presentation of checks for acceptance before theya re paid.
No. Under the law, where a check is certified by the bank on which it is drawn the certification is equivalent to an
acceptance. And it is then that the warranty under section 62 exists. That if a drawee bank pays a forged check
which was previously accepted or certified by the said bank it cannot recover from a holder who did not participate
in the forgery and did not have actual notice thereof.
W/N MSCI was Negligent and therefore PNB should Recover?
YES. The law provides, when a signature is forged or made without the authority of the person whose signature is
purports to be, it is wholly inoperative, and no right to retain the instrument, or to give a discharge thereof, or to
enforce payment thereof against any party thereto, can be aquired through or under such signature, unless the
party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority.
PNB did not warrant to MCSI that the check is genuine, by its acceptance thereof, nor did it perform any act which
would have induced MSCI to believe it was a genuine check. PNB is not Precluded from setting up the forgery.
W/N the drawee bank should be allowed recovery, as MSCIs position would not become worse that if
the drawee had refused the payment of these checks upon their presentation?
No. Under the law, if a drawee of a check, who is deceived by a forgery of the drawers signature may recover the
payment bank, unless his mistake has placed an innocent holder of the paper in a worse position than he would
have been in if the discovery of forgery had been made on presentation. MSCI has lost nothing by anything which
the drawee has done. It had in its hands some forged worthless papers. It did not purchase or acquired these
papers because of any representation made to it by the drawee. According to the SC, 1. That where a check is
accepted or certified by the bank on which it is drawn, the bank is estopped to deny the genuine of the drawers
signature and his capacity to issue the instrument. 2. That if a drawee bank pays forged check which was previously
accepted or certified by the said bank it cannot recover from a holder who did not participate in the forgery and did
not have actual notice thereof. 3. That on who purchases a check or draft is bound to satisfy himself that hte paper
is genuine, and that by indorsing it or presenting it for payment or putting it into circulation before presentation he
impliedly asserts that he performed his duty.


W/N SIHI is a holder in due course being a second indorser and a holder of crossed checks?
Yes. Sec. 52 (HDC)1. That it is complete and regular upon its face, that he became the holder of it before it was
overdue, and without notice that it had been previously dishonored, if 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 ord
defect in the title of the person negotiating it. Sec. 59, every holder is deemed prima facie holder in due course.
However, when it is shown that the title of any person who has negotiated the instrument was defective, the burden
is on the holder to provethat he or some person under whom he claims, acquired the title as holder in due course.
Effects of crossing of a Check: 1. Check may not be encased but only deposited in the bank. 2. Check may be
negotiated only once- to one who has an account with a bank. 3. Act of crossing the check serves as warning to the
holder that the check has been issued for definite purpose he must inquire if he has received the check pursuant to
the purpose, otherwise, he is not a holder in due course.
Crossing of checks should put the holder on inquiry and upon him devolves the duty to ascertain the inderosers title
to the check or the nature of his possession. Failure to would result to guilty of gross negligence amounting to legal
absense of good faith. Contrary to sec. 52 (c) of the NIL. SIHI is not a holder in due course. Consequently BCCFI
cannot be obliged to pay the checks. However, that SIHI could not recover from the checks. The only disadvantage
of a holder who is not a holder in due course is that the instrument is subject to defenses as if it were nonnegotiable. Hense SIHI can collect from the immediate indorse George.


W/N the acquittal of Lim and Tianson didn't operate to release Steelweld from its liability as an accommodation party.
No. Noteworthy is that neither said pronouncement nor any other part of the judgment of acquittal declared it liable to petitioner.
To be sure, as regards an accommodation party, the condition of lack of notice of any infirmity or defect in title of the
persons negotiating it is of no application since the law preserves the right of recourse of a holder for value against
an accommodation party notwithstanding knowledge that at the time of taking the instrument, knew him only as an accommodation
Further, there is no evidence to show that petitioner possessed the check before the instruments presentment and dishonor.


what transpired during the transactions involving the check, evidence and facts show that there was any participation or intervention
on the part of petitioner. What the record shows is that only after the check was deposited and dishonored, petitioner came
into possession of it in some way and was able to give it in evidence at the trial of the civil case it has instituted against the drawers of
the check.

State Investment House Vs. CA (Security of Jewelry)

W/N State is not a Holder in Due course?
No. A prima facie presumption exists that a holder of a negotiable instrument is a holder in due course. The burden of proving that
State is not a holder in due course is upon Moulic. In this regard, she failed to do so. The evidence shows that the dated checks
were complete and regular; petitioner bought the checks from Victoriano before their due dates; it took the checks in good faith and
for value; and it was never informed nor made aware that these checks were merely issued to payee as security. Consequently,
State is a holder in due course.

Moulic cannot set up the defense that there was failure or want of consideration. It can only

invoke the defense if State was a privy to the purpose for which they were issued and therefore is not a holder in due
course. Furthermore, the mere fact that the checks were issued as security is not sufficient ground to discharge the instrument
as against a holder in due course. And also, Moulic was responsible for the dishonor of her checks.
funds from her account and could not have expected her checks to be honored by then.

She withdrew her