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  • Case 3

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    exquisite
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    Perfecto Palmares obtained Sharon Morales' autograph at a movie premiere and later altered the signed paper to include a promise to pay him P50,000. He then negotiated the paper through several transferees until it reached the current holder, Henry Hilado. None of the transferees were aware of how the paper was created. Sharon Morales would not be liable for paying the note, even to a holder in due course, because the title was defective as Perfecto altered the paper after obtaining her signature.

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    Perfecto Palmares obtained Sharon Morales' autograph at a movie premiere and later altered the signed paper to include a promise to pay him P50,000. He then negotiated the paper through several transferees until it reached the current holder, Henry Hilado. None of the transferees were aware of how the paper was created. Sharon Morales would not be liable for paying the note, even to a holder in due course, because the title was defective as Perfecto altered the paper after obtaining her signature.

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    131 views1 page

    Case 3

    Uploaded by

    exquisite
    Perfecto Palmares obtained Sharon Morales' autograph at a movie premiere and later altered the signed paper to include a promise to pay him P50,000. He then negotiated the paper through several transferees until it reached the current holder, Henry Hilado. None of the transferees were aware of how the paper was created. Sharon Morales would not be liable for paying the note, even to a holder in due course, because the title was defective as Perfecto altered the paper after obtaining her signature.

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    © All Rights Reserved
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    Case 3

    At a movie premier, Perfecto Palmares approached Sharon Morales, the star of


    the movie, and requested an autograph from her. Sharon Morales willingly obliged and
    signed her name at the bottom right portion of a white 8” x 11” stationery which Perfecto
    Palmares presented to her. Shortly after reaching home, Perfecto Palmares printed
    above the signature of Sharon Morales through his computer the following: “I promise to
    pay Perfecto Palmares of his order P50,000.00”. Thereafter, Perfecto Palmares
    negotiated the paper to Arturo Alvarez, Arturo Alvarez to Bernardo Benitez, and
    Bernardo Benitez to Henry Hilado, holder. Alvarez, Benitez and Hilado knew nothing
    about how the apparent note come into being. (F Soriano)

    Question: Will Sharon Morales be held liable for the note?

    If Henry Hilado is a holder in due course, can he collect from Sharon Morales?

    Answer: No, Sharon Morales is not liable for the note and Henry Hilado cannot
    collect from Sharon Morales, whether or not he is a holder, in due course. Each
    holder is considered prima facie to be a holder in due course, but if it is
    demonstrated that the title of some individual who negotiated the instrument was
    defective, the responsibility is on the holder to demonstrate that he or any
    individual under whom he claims to have obtained the title as holder in due
    course.

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