Sihi v. IAC.docx

STATE INVESTMENT HOUSE V. IAC 175 SCRA 310 JULY 13, 1989 FACTS:

New Sikatuna Wood Industries Inc. (NSWI) requested for a loan from Harris Chua who later issued 3 crossed checks upon the condition that the former should wait until Decemer !"#$ when he would ha%e the mone&. Susequentl&' New Sikatuna entered an areement with State In%estment House Inc. (SIHI) under a deed of sale. NSWI assined and discounted !! postdated checks includin the 3 issued & Chua. When the 3 checks were deposited & SIHI' the& were howe%er dishonored due to insufficienc& of funds'* stop pa&ment'* and account closed.* SIHI made demands upon upon Chua Chua to make make ood ood the the said said chec checks ks ut the latt latter er fail failed ed to do so. so. +ri% +ri%at ate e respond respondent ents,d s,defe efenda ndants nts filed filed a third third part& part& compla complaint int aains aainstt New Sikatu Sikatuna na Wood Wood Industries' Inc. for reimursement and indemnification in the e%ent that the& e held liale to petitioner,plaintiff. -or failure of third part& defendant to answer the third part& complaint despite due ser%ice of summons' the latter was declared in default.

ISSUE: ISSUE: Whether SIHI is a holder in due course so as to reco%er the amounts in the

checks from Chua HELD: No.

nder Section /0 of the Neotiale Instruments 1aw' presentment for pa&ment to e sufficient must e made (a) & the holder' or & some person authori2ed to recei%e pa&ment on his ehalf. s to who the holder or authori2ed person will e depends on the instructions stated on the face of the check. 4he three su5ect checks in the case at ar had een crossed enerall& and issued pa&ale to New Sikatuna Wood Indutries' Inc. which could onl& mean that the drawer had intended the same for deposit onl& & the rihtful person' i.e.' the pa&ee named therein. pparentl&' it was not the pa&ee who presented presented the same for pa&ment and therefore' therefore' there was no proper presentment' presentment' and the liailit& did not attach to the drawer. 4he checks in issue were crossed enerall& and issued pa&ale to New Sikatuna Sikatuna Wood which could onl& mean that the drawer has intended intended the same for deposit onl& & the rihtful rihtful person. pparentl& pparentl&'' it was not the pa&ee who presented the same for pa&ment and therefore' there was no proper presentment and the liailit& liailit& didn6t didn6t attach to the drawer. drawer. 4hus' in the asence asence of due presentment' presentment' the drawer didn6t didn6t ecome liale. liale. Consequentl& Consequentl&'' no riht of recourse recourse is a%ailale to petitioner aainst the drawer of the su5ect checks considerin that the petitioner is the proper part& authori2ed to make presentment of the checks in question. Nonetheless' the holder could still collect from New Sikatuna if the latter doesn6t ha%e a %alid e7cuse from refusin pa&ment.