Negotiable Intrument Law Case Doctrine

De Ocampo vs. Gatchalian

Good faith on the part of the holder is presumed, such presumption is
destroyed if the payee or indorsee acquired possession of the
instrument under circumstances that should have put it to inquiry as to
the title of the holder who negotiated the instrument. The burden is
now on the part of the holder to show that notwithstanding the
suspicious circumstances, it acquired in the actual good faith.
Mesina vs. IAC
The holder of a cashiers check who is not a holder in due
course cannot enforce payment against the issuing bank which
dishonors the same. If a payee of a cashiers 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 bank would of
course have the right to refuse payment of the check when
presented by payee.
Metropol vs. Sambok
A qualified indorserment constitutes the indorser a mere assignor of
the title to the instrument. It may be made by adding to the indorsers
signature the words without recourse or any words of similar import.
Such indorsement relieves the indorser of the general obligation to pay
if the instrument is dishonored but not of the liability arising from
warranties on the instrument as provided by section 65 of NIL.
Recourse means resort to a person who is secondarily liable after the
default of the person who is primarily liable. A person who indorses
without qualification engages that on due presentment, the note shall
be accepted or paid, or both as the case maybe, and that if it be
dishonored, he will pay the amount thereof to the holder.
Sepiera vs. Court of Appeals
Every indorser who indorses without qualification, warrants to all
subsequent holders in due course that, on due presentment, it shall be
accepted or paid or both, according to its tenor, and that if it be
dishonored and the necessary proceedings on dishonor be duly taken,

he will pay the amount thereof to the holder or to any subsequent

indorser who may be compelled to pay it.
Prudencial Bank vs. IAC
Acceptance is presumed to be unqualified or absolute. If the drawee
intends toqualify his acceptance, he must do so distinctly and
unmistakably or else the acceptance will be taken as absolute.
Wong vs. Court of Appeals
A check must be presented for payment within a reasonable time after
its issue or the drawer will be discharged from liability thereon to the
extent of the loss caused by the delay. By current banking practice, a
check becomes stale after more than six (6) months, or 180 days.
The International Corporate Bank vs. Francis S. Gueco and Ma.
Luz E Gueco
A stale check is one which has not been presented for payment within
a reasonable time after its issue. It is valueless and, therefore, should
not be paid. Under the negotiable instruments law, an instrument not
payable on demand must be presented for payment on the day it falls
due. When the instrument is payable on demand, presentment must be
made within a reasonable time after its issue. In the case of a bill of
exchange, presentment is sufficient if made within a reasonable time
after the last negotiation thereof. A check must be presented for
payment within a reasonable time after its issue, and in determining
what is a "reasonable time," regard is to be had to the nature of the
instrument, the usage of trade or business with respect to such
instruments, and the facts of the particular case. The test is whether the
payee employed suchdiligence as a prudent man exercises in his own
affairs. This is because the nature and theory behind the useof a check
points to its immediate use and payability.
State Investment House Inc. vs. CA
The withdrawal of the money from the drawee bank to avoid liability
on the checks cannot prejudice the rights of holders in due course. For
the reason that the holder who takes the negotiated paper makes a
contract with the parties on the face of the instrument; there is an
implied representation that funds or credit are available for the
payment of the instrument in the bank upon which it is withdrawn.

Bataan Cigar and Cigarette Factory, Inc. vs. CA

In order to preserve the credit worthiness of checks, jurisprudence has
pronounced that crossing a check should have the following effects:
(1) check may not be encashed but only deposited in the bank; (2) the
check may be negotiated only once, to one who has an account with a
bank; (3) and the act of crossing the check serves as a warning to the
holder that the check has been issued for a definite purpose so that he
must inquire if he has received the check pursuant to that purpose,
otherwise he is not a holder in due course.
Citytrust banking Corp., vs. Intermediate Appellate Court
Even there was error on the account number the controlling in
determining in whose account the deposit is name of the account
owner. This is so because it is not likely to commit an error in ones
name than merely relying on numbers which are difficult to remember.
Numbers are for the convenience of the bank but was never intended
to disregard the real name of its depositors. The bank is engaged in
business impressed with public trust, and it is its duty to protect in
return its clients and depositors who transact business with it.
Tan vs. Court of Appeals

A cashiers check is a primary obligation of the issuing bank and

accepted in advance by its mere issuance, and by its peculiar character
and general use in the commercial world is regarded substantially to be
as good as the money which it represents.
Papa vs. A.U. Valencia
After more than 10 years from the payment in part by cash and in part
by check, the presumption is that the check had been encashed. Failure
of the payee to encash a check for more than 10 years undoubtedly
resulted in the impairment of the check through his unreasonable and
unexplained delay.
Bank of the Philippine Islands vs. Court of Appeals
Every negotiable instrument is deemed prima facie to have been issued
for a valuable consideration; every person whose signature appears
thereon to have become a party thereto for value. Therefore, it is up to
the party who alleges that there was absence of consideration to prove
such fact.
The presumption will operate only if there was negotiation.
Consideration is not presumed if there was transfer without
indorsement.