FACTS:

Jose Go purchased from Associate Bank a Cashier’s Check, which he left on top  of  the  manager’s  desk  when  left  the  bank.    The  bank  manager  then had  it  kept  for  safekeeping  by  one  of  its  employees.    The  employee  was then in conference with one Alexander Lim.  He left the check in his desk
and  upon  his  return,  Lim  and  the  check  were  gone.    When  Go  inquired about his check, the same couldn't be found and Go was advised to request for the stoppage of payment which he did.  He executed also an affidavit of loss as well as reported it to the police.
 
The bank then received the check twice for clearing.  For these two times, they  dishonored  the  payment  by  saying  that payment  has  been  stopped.  After  the  second  time,  a  lawyer  contacted  it  demanding  payment.    He refused to disclose the name of his client and threatened to sue.  Later, the
name  of  Mesina  was  revealed.    When  asked  by  the  police  on  how  he possessed the  check, he said  it was paid to him Lim.  An  information for theft was then filed against Lim.   
 
A case of interpleader was filed by the bank and Go moved to participate as  intervenor  in  the  complaint  for  damages.    Mesina  moved  for  the dismissal  of  the  case  but  was  denied.    The  trial  court  ruled  in  the interpleader case ordering the bank to replace the cashier’s check in favor of Go.
 

HELD:

Petitioner  cannot  raise  as  arguments  that  a  cashier’s  check  cannot  be countermanded  from  the  hands  of  a  holder  in  due  course  and  that  a cashier’s  check  is  a  check  drawn  by  the  bank  against  itself.    Petitioner failed  to  substantiate  that  he  was  a  holder  in  due  course.    Upon
questioning,  he  admitted  that  he  got  the  check  from  Lim  who  stole  the check.  He refused to disclose how and why it has passed to him.  It simply means that he has notice of the defect of his title over the check from the start.    The  holder  of  a  cashier’s  check  who  is  not  a  holder  in  due  course
cannot  enforce  payment  against  the  issuing  bank  which  dishonors  the same.  If a payee of a cashier’s check obtained it from the issuing bank by fraud,  or  if  there  is  some  other  reason  why  the  payee  is  not  entitled  to collect  the  check,  the  bank  would  of  course  have  the  right  to  refuse
payment of the check when presented by payee, since the bank was aware of the facts surrounding the loss of the check in question.