CELY YANG v. COURT OF APPEALS.

G.R. No. 138074. August 15, 2003.

FACTS

Cely Yang and Prem Chandiramani agreed to exchange the latter's manager's
check to two of Yang's checks both payable to the order of Fernando David.
They also agreed that Yang would secure a dollar draft in exchange for
Chandiramani's dollar draft.
At the time of exchange, Yang gave the checks to Danilo Ranigo. Ranigo said
that Chandaramani did not appear the rendezvous and that he lost the
checks and draft, but in fact, the exchange transpired.
Yang requested the respective banks to stop payment on the instruments but
was subsequently denied. Yang filed a complaint for the return of the checks
and for damages against Chandaramani and David.
The lower court sided with David and was held as holder in due course. The
checks were complete in its face when they were negotiated and that he had
no notice that the checks were dishonored and took the checks in good faith.
The lower courts also said that David had taken the necessary precautions to
verify the genuineness of the checks.

ISSUE

Whether David was a holder in due course.

RULING

The SC held that David was a holder in due course and Yang's petition is
denied. Yang has the burden of proof to prove that David was not a holder in
due course which she failed to do so. It was noted that David exchanged the
checks for money when petitioner averred otherwise.
The SC also agreed with the findings of the lower court. In relation to the
checks being crossed, the SC said that in Bataan Cigar v. CA, the checks
were negotiated while in this case it was only deposited.