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    Chan Wan V Tan Kim and Chen So

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    Patricia Jazmin Patricio
    1) Chan Wan collected eleven checks from Equitable Banking Corporation that were dishonored due to insufficient funds. Chan Wan filed a collection suit against Tan Kim. 2) The court found that Chan Wan was not a holder in due course. Eight of the checks were crossed to China Banking Corporation but Chan Wan deposited them, so there was no proper presentment. 3) However, the case was dismissed in the interest of justice due to incomplete details about the circumstances of the transaction between Tan Kim and Pinong/Muy. The record was returned to the lower court for additional evidence.

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    Chan Wan V Tan Kim and Chen So

    Uploaded by

    Patricia Jazmin Patricio
    1K views2 pages
    1) Chan Wan collected eleven checks from Equitable Banking Corporation that were dishonored due to insufficient funds. Chan Wan filed a collection suit against Tan Kim. 2) The court found that Chan Wan was not a holder in due course. Eight of the checks were crossed to China Banking Corporation but Chan Wan deposited them, so there was no proper presentment. 3) However, the case was dismissed in the interest of justice due to incomplete details about the circumstances of the transaction between Tan Kim and Pinong/Muy. The record was returned to the lower court for additional evidence.

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    Money Market Instruments

    Original Title

    Chan Wan v Tan Kim and Chen So

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    1) Chan Wan collected eleven checks from Equitable Banking Corporation that were dishonored due to insufficient funds. Chan Wan filed a collection suit against Tan Kim. 2) The court found that Chan Wan was not a holder in due course. Eight of the checks were crossed to China Banking Corporation but Chan Wan deposited them, so there was no proper presentment. 3) However, the case was dismissed in the interest of justice due to incomplete details about the circumstances of the transaction between Tan Kim and Pinong/Muy. The record was returned to the lower court for additional evidence.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1K views2 pages

    Chan Wan V Tan Kim and Chen So

    Uploaded by

    Patricia Jazmin Patricio
    1) Chan Wan collected eleven checks from Equitable Banking Corporation that were dishonored due to insufficient funds. Chan Wan filed a collection suit against Tan Kim. 2) The court found that Chan Wan was not a holder in due course. Eight of the checks were crossed to China Banking Corporation but Chan Wan deposited them, so there was no proper presentment. 3) However, the case was dismissed in the interest of justice due to incomplete details about the circumstances of the transaction between Tan Kim and Pinong/Muy. The record was returned to the lower court for additional evidence.

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    of 2

    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 insufficient funds. As such, she
    filed this collection suit. In court, Tan Kim declared that the
    checks had been issued to Pinong and Muy for some shoes,
    however, was only intended as mere receipts. The court
    declined to order payment as Tan Kim was not a holder in
    due course, and the cross checks was deposited in the bank
    not mentioned in the crossing. The bank mentioned in the
    crossing is China Banking Corporation.
    Issue:
    1. 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: The Negotiable Instruments Law regulating the
    issuance of negotiable checks, the rights and the liabilities
    arising therefrom, does not mention "crossed checks". Art.
    541 of the Code of Commerce refers to such instruments. In
    another case decided upon by this court, said Bills of
    Exchange Act because the Negotiable Law, originating from
    England and codified in the United States, permits resort
    thereto in matters not covered by it and local legislation.
    Eight of the checks here in question bear across their face
    two parallel transverse lines between which these words are
    written: non-negotiable China Banking Corporation. These
    checks have, therefore, been crossed specially to the China
    Banking Corporation, and should have been presented for
    payment by China Banking, and not by Chan Wan. Inasmuch
    as Chan Wan did present them for payment himself the
    Manila court said there was no proper presentment, and
    the liability did not attach to the drawer.
    1. On the back of the said checks, endorsements were
    shown that it had been deposited and presented to China

    bank for collection. All the crossed checks have the


    clearance endorsements of China Bank. But as the Chan
    Kim has no funds they were unpaid and returned, some of
    them has a stamp of account closed. How they reach
    Tan Kims hands, it did not indicate as the trial court
    surmised not a finding of fact that he got them after
    returned, as he did not explained such circumstance to
    the Court. As such, the lower court held him not to be a
    holder in due course under the circumstances, since he
    knew, upon taking them up, that the checks had already
    been dishonored.
    2. Simply because he was not a holder in due course
    Chan Wan could not recover on the checks. The
    Negotiable Instruments Law does not provide that a
    holder who is not a holder in due course, may not in
    any case, recover on the instrument.
    The only
    disadvantage of holder who is not a holder in due
    course is that the negotiable instrument is subject to
    defense as if it were non- negotiable.
    Tan Kim
    admitted on cross-examination either that the checks
    had been issued as evidence of debts to Pinong and
    Muy, and/or that they had been issued in payment of
    shoes which Pinong had promised to make for her.
    Seeming to imply that Pinong had to make the shoes,
    she asserted Pinong had "promised to pay the checks
    for me". However, the facts was not completely aired
    out. Needless to say, if it were true that the checks
    had been issued in payment for shoes that were never
    made and delivered, Tan Kim would have a good
    defense as against a holder who is not a holder in due
    course.
    Considering the deficiency of important details on
    which a fair adjudication of the parties' right depends,
    we think the record should be and is hereby returned,
    in the interest of justice, to the court below for
    additional evidence, and such further proceedings as
    are not inconsistent with this opinion. With the
    understanding that, as defendants did not appeal,

    their counterclaim must be and is hereby definitely


    dismissed.

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