Ang Tek Lian v.

Court of Appeals

011

87 Phil 383, 1950, Bengzon, J.

Digested by Zoe Velasco Law 108 NIL
Topic: When instrument is payable to bearer
Petitioner drew a check, knowing he had no funds therefore and presented it to Lee Hua Hong. He was sued for
estafa. Petitioner says that since he was not the one who indorsed the check, then he should incur no liability.
DOCTRINE: A check made payable to cash is a check made payable to bearer; and indorsement by the drawer
is not needed in order for the bank to honor it. .
FACTS
Ang Tek Lian had no funds. However, despite being aware of this, he still drew a check upon China
Banking Corp.
o (for the sum of 4k payable to the order of "cash")
He then delivered it to Lee Hua Hong in exchange for money handed by the latter. The story was that Lee
Hua Hong gave the money to Ang Tek Lian because the latter needed the money but he cannot withdraw
because the bank was closed.
Two days later, the check was presented but was dishonored for insufficient funds.
o For both dates, the amount deposited in the bank was only P355.
Ang Tek Lian was then convicted for the crime of estafa under Article 315 (d) for issuing a rubber check.
Ang Tek Lians defense: He did not commit estafa because the check had been made payable to "cash" and
it had not been indorsed.
o He also pointed out that it is the uniform practice of banks that checks so drawn are invariably
dishonored. Thus when Lee Hua Hong accepted the check, Ang was not acting fraudulently
because Lee knew of the risk.
ISSUES & HOLDING
What is the nature of a check payable to cash? A check payable to "cash" is a check payable to
bearer. Where a check is made payable to "cash," the check does not purport to be the name of any person and
hence the instrument is made payable to bearer. The drawee bank need not obtain any indorsement, but may
pay it to the person presenting it without indorsement.
RATIO

Where a check is made payable to "cash," the check does not purport to be the name of any person and
hence the instrument is made payable to bearer. The drawee bank need not obtain any indorsement, but
may pay it to the person presenting it without indorsement.
Indorsement not required - the requirement of indorsements before a bank can honor a check payable
to "cash" is not uniform practice among banks and depends on the circumstances of the transaction.
The bank may demand identification in certain circumstances - this is in order to prevent
complications such as in situations where there is:
a) forgery of the drawer's signature;
b) loss of the check by the rightful owner;
c) raising of the amount payable. Where the bank is satisfied with the identity of the bearer who tenders
the check, it will pay the instrument w/o further question.

DISPOSITIVE
Wherefore, the decision of the Court
of Appeals is AFFIRMED.