Appellant Gatchalian drew check worth P600 which was received by plaintiff-appellee in Vicente R. de Ocampo & Co. (VRDO & Co.) payment of indebtedness of certain Matilde Gonzales. Plaintiff-appellee even gave a change of P158.25 to Gonzales.
Whether or not VRDO & Co.’s defense of good faith is tenable.
NO. The irregularity is evident. As holder’s title was defective or suspicious, it cannot be stated that the payee acquired the check without knowledge of said defect in holder’s title, and for this reason the presumption that it is a holder in due course or that it acquired the instrument in good faith does not exist. And having presented no evidence that it acquired the check in good faith, it (payee) cannot be considered as a holder in due course.