VII holders in due course

Mesina vs iac
Jose Go maintains an account with Associated Bank. He needed to transfer
P800,000.00 from Associated Bank to another bank but he realized that he does
not want to be carrying that cash so he bought a cashiers check from Associated
Bank worth P800,000.00. Associated Bank then issued the check but Jose Go
forgot to get the check so it was left on top of the desk of the bank manager. The
bank manager, when he found the check, entrusted it to Albert Uy for the later to
safe keep it. The check was however stolen from Uy by a certain Alexander Lim.
Jose Go learned that the check was stolen son he made a stop payment order
against the check. Meanwhile, Associated Bank received the subject check from
Prudential Bank for clearing. Apparently, the check was presented by a certain
Marcelo Mesina for payment. Associated Bank dishonored the check.
When asked how Mesina got hold of the check, he merely stated that Alfredo
Lim, whos already at large, paid the check to him for a certain transaction.
ISSUE: Whether or not Mesina is a holder in due course.
HELD: No. Admittedly, Mesina became the holder of the cashiers check as
endorsed by Alexander Lim who stole the check. Mesina however refused to say
how and why it was passed to him. Mesina had therefore notice of the defect of
his title over the check from the start. The holder of a cashiers check who is not
a holder in due course cannot enforce such check against the issuing bank which
dishonors the same. The check in question suffers from the infirmity of not having
been properly negotiated and for value by Jose Go who is the real owner of said
instrument.