The drawer delivered a check to Wilma, an agent, for safekeeping only and for the purpose of evidencing her sincere intention to buy a car owned by RC, who is Wilma’s principal. Wilma did not return the check and delivered it as payment for her hospital expenses to MB Clinic. Does the presumption that every holder is presumed to be HIDC apply to MB Clinic?
No, the rule that a possessor of the instrument is prima facie a HIDC does not apply to MB Clinic because there was a defect in the title of the holder, since the instrument was not payable to WILMA or to bearer, the drawer had no account with the payee, Wilma did not show or tell the payee why she had the check in his possession and why he was using it for the payment of his own account. 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, the presumption that it is a HIDC does not exist. (De Ocampo& Co. v. Gatchalian, G.R. No. L-‐15126, Nov. 30, 1961)