Sec.  27.  When  lien  on  instrument  constitutes  holder  for  value.  — Where the holder has a lien on the instrument arising either from contract or by implication of law, he is deemed a holder for value to the extent of his lien.


•      Suppose that A makes a note in the sum of P1000 payable to the order of  B.    B  owes  C  P600.    C  is  said  to  have  a  lien  on  the  note  to  the extent of P600 only, and to that extent, he is a holder for value.
•      Can C as indorsee collect the whole amount of P1000 from A, or only P600? It depends.  If A maker, has defenses against B indorser, such as  absence  of  consideration,  C,  even  if  a  holder  in  due  course  can collect only P600 from A, the extent of his lien.
•      Reason for the rule: C is actually a holder in due course for P600 only.  He  is  a  holder  in  due  course  for  such  as  he  is  a  holder  for  value  for only P600.  For the balance of P400 he is not a holder for value, and since being a holder for value is one of the requisites of a holder in due course,  he  cannot  be  a  holder  in  due  course  as  far  as  the  P400  is concerned.   
•      If A has personal defenses, he cannot use such as far as the P600 is concerned.
•      If A on the other hand has real defenses, C cannot collect anything.   
•      But  if  A  maker  doesn't  have  any  defenses  at  all  against  B  indorser, then C can collect the whole amount of P1000 and hold the P400 for
the benefit of B.