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Cely Yang v.

Doctrine: Every holder of a negotiable instrument is presumed to be a holder in
due course.
Petitioner Cely Yang agreed with private respondent Prem Chandiramani to procure
from Equitable Banking Corp. and Far East Bank and Trust Company (FEBTC) two
cashiers checks in the amount of P2.087 million each, payable to Fernando david
and FEBTC dollar draft in the amount of US$200,000.00 payable to PCIB FCDU
account No. 4195-01165-2. Yang gave the checks and the draft to Danilo Ranigo to
be delivered to Chandiramani. Ranigo was to meet Chandiramani to turn over the
checks and the dollar draft, and the latter would in turn deliver to the former Phil.
Yang gave the cashiers checks and dollar drafts to her business associate, Albert
Liong, to be delivered to Chandiramani by Liongs messenger, Danilo Ranigo.
Commercial International Bank (PCIB) managers check in the sum of P4.2 million
and the dollar draft in the same amount to be issued by Hang Seng Bank Ltd. of
Hong Kong. But Chandiramani did not appear at the rendezvous and Ranigo
allegedly lost the two cashiers checks and the dollar draft.
Liong, in turn, informed Yang, and the loss was then reported to the police. The loss
was then reported to the police. It transpired, however that the checks and the
dollar draft were never lost, for Chandiramani was able to get hold of them without
delivering the exchange consideration consisting of PCIB Managers checks. Two
hours after Chandiramani was able to meet Ranigo, the former delivered to David
the two cashiers checks of Yang and, in exchange, got US $360,000 from David,
who in turn deposited them. Chandiramani also deposited the dollar draft in PCIG
FCDU No. 4194-0165-2.
He also deposited FEBTC Dollar Draft No. 4771, dated December 22, 1987, drawn
upon the Chemical Bank, New York for US$200K in PCIB FCDU Account No. 4195-
01165-2 on the same date. Yang requested FEBTC and Equitable to stop payment on
the instruments she believed to be lost. Both Banks complied with her request, but
upon the representation of PCIB, FEBTC subsequently lifted the stop payment order
on FEBTC Dollar Draft No. 4771, thus, enabling the holder PCIB FCDU Account No.
4194-0165-2 to receive the amount of US $ 200, 000. Yang filed against David and
Chandiramani. CA affirms RTC: in favor of David

ISSUE: Whether or not David may be considered a holder in due course.

RULING: Every holder of a negotiable instrument is presumed to be a holder in due
course. This is especially true if one is a holder because he is the payee or
endorsee 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 Chandiramani 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
Chandiramani. David wasn't a privy to the transactions between Yang and
Chandiramani. Instead, Chandigarh 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 Chandiramani what the nature of the latters title to the
checks was, if any, or the nature of his possession.
WHEREFORE, the instant petition is DENIED. The assailed decision of the Court of
Appeals, dated March 25, 1999, in CA-G.R. CV No. 52398 is AFFIRMED. Costs against
the petitioner.