7/25/2019 Chan Wan v Tan Kim and Chen So
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Chan Wan v. Tan Kim Chen So
Facts: Chan Wan collected its bearer instruments in the form
of eleven checks from Equitable Banking Corporation, but
were dishonoured due to insucient funds. As such, she
led this collection suit. !n court, "an #im declared that
the
checks had been issued to $inong and %u& for some shoes,
however, was onl& 'intended as mere receipts(. "he court
declined to order pa&ment as "an #im was not a holder in
due course, and the cross checks was deposited in the bank
not mentioned in the crossing. "he bank mentioned in the
crossing is China Banking Corporation.
Issue:
). Whether Chan Wan is a holder in due course. NO.2. Whether
Chan Wan has the right to collect against the
eleven checks.YES, however, the case was dismissed in
the interest of justice due to incompleteness of details on
the circumstances of the said transaction.
Discussion: "he *egotiable !nstruments +aw regulating the
issuance of negotiable checks, the rights and the
liabilities
arising therefrom, does not mention crossed checks. Art.
-) of the Code of Commerce refers to such instruments. !n
another case decided upon b& this court, said Bills of
E/change Act because the *egotiable +aw, originating from
England and codied in the 0nited 1tates, permits resort
thereto in matters not covered b& it and local
legislation.
Eight of the checks here in question bear across their face
two parallel transverse lines between which these words are
written2 non3negotiable 4 China Banking Corporation. "hese
checks have, therefore, been crossed speciall& to the
China
Banking Corporation, and should have been presented for
pa&ment b& China Banking, and not b& Chan Wan.
!nasmuch
as Chan Wan did present them for pa&ment himself 4 the
%anila court said 4 there was no proper presentment, and
the liabilit& did not attach to the drawer.
). 5n the back of the said checks, endorsements wereshown that
it had been deposited and presented to China
bank for collection. All the crossed checks have the
6clearance7 endorsements of China Bank. But as the Chan
#im has no funds the& were unpaid and returned, some of
them has a stamp of 6account closed7. 8ow the& reach
"an #im(s hands, it did not indicate as the trial court
surmised 9 not a nding of fact 9 that he got them after
returned, as he did not e/plained such circumstance to
the Court. As such, the lower court held him not to be aholder
in due course under the circumstances, since he
knew, upon taking them up, that the checks had alread&
been dishonored.:. 1impl& because he was not a holder in due
course
Chan Wan could not recover on the checks. "he
*egotiable !nstruments +aw does not provide that a
holder who is not a holder in due course, ma& not in
an& case, recover on the instrument. "he onl&
disadvantage of holder who is not a holder in due
course is that the negotiable instrument is sub;ect todefense as
if it were non3 negotiable. "an #im
admitted on cross3e/amination either that the checks
had been issued as evidence of debts to $inong and
%u&, and
