Professional Documents
Culture Documents
CA
Bellosillo, J.:
Facts:
Nora Moulic issued to Corazon Victoriano, as security
for pieces of jewellery to be sold on commission, two
postdated checks in the amount of fifty thousand
each. Thereafter, Victoriano negotiated the checks to
State Investment House, Inc. When Moulic failed to
sell the jewellry, she returned it to Victoriano before
the maturity of the checks. However, the checks
cannot be retrieved as they have been negotiated.
Before the maturity date Moulic withdrew her funds
from the bank contesting that she incurred no
obligation on the checks because the jewellery was
never sold and the checks are negotiated without her
knowledge and consent. Upon presentment of for
payment, the checks were dishonoured for
insufficiency of funds.
Issues:
1. Whether or not State Investment House inc. was a
holder of the check in due course
2. Whether or not Moulic can set up against the
petitioner the defense that there was failure or
absence of consideration
Held:
FACT:
Moulic issued checks as security to Victoriano, for
pieces of jewelry to besold on commission. Moulic
failed to sell the pieces of jewelry, so she
returned them to Victoriano. The checks however
could not be recovered by Moulic as these have
been discounted already in favor of petitioner.
Consequently, before the maturity dates, Moulic
withdrew her funds from her account.
Thereafter, petitioner presented the checks for
payment but these were dishonored. This prompted
the petitioner to initiate an action
against Moulic.
HELD:
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.