MARCELO A.

MESINA vs IAC
G.R. NO. 70145 (November 13, 1986)

DOCTRINE:
The holder of a cashier's check who is not a holder in due course cannot enforce such
check against the issuing bank which dishonors the same. If a payee of a cashier's check
obtained it from the issuing bank by fraud, or if there is some other reason why the payee is
not entitled to collect the check, the respondent bank would have the right to refuse payment
of the check when presented by the payee, since respondent bank was aware of the facts
surrounding the loss of the check in question.

FACTS:
1. Jose Go purchased from Associated Bank a cashier's check. However, he just left it on
top of the bank manager’s desk when he departed from the bank. The manager then
entrusted Alberto Uy, a bank official, for the safekeeping of the check.
2. When Jose Go inquired for his cashier’s check from Alberto Uy, they found out that it
was missing from the folder and nowhere to be found. He was then advised to
accomplish a "STOP PAYMENT" order. Also, Jose Go executed an affidavit of loss
and Alberto Uy visited the police to report the loss check pointing to Alexander Lim
as the one who could shed light on it; since, he was his visitor prior to the incident.
3. Two days later, Associated Bank received the lost check for clearing from Prudential
Bank; however, it was immediately dishonored and returned with the words
“PAYMENT STOPPED” stomped on it.
4. After dishonoring the same check twice, Associated Bank received summons and
copy of a complaint for damages of Marcelo Mesina who was in possession of the lost
check and is demanding payment. Of which, the police officer found out that he came
to posses the check when Alexander Uy paid it him in a “certain transaction” to which
he refused to elucidate further.

ISSUE:
Whether or not Marcelo Mesina can collect on the stolen check on the ground that he
is a holder in due course?

HELD:
No. Marcelo Mesina failed to substantiate his claim that he is a holder in due course
and for consideration or value as shown by the established facts of the case. He admittedly
became the holder of the cashier's check as endorsed by Alexander Lim who stole the check.
He refused to say how and why it was passed to him. He had therefore notice of the defect of
his title over the check from the start. The holder of a cashier's check who is not a holder in
due course cannot enforce such check against the issuing bank which dishonors the same.