Sec. 185. Check, defined.

- A check is a bill of exchange drawn on a bank payable on

demand. Except as herein otherwise provided, the provisions of this Act applicable to a
bill of exchange payable on demand apply to a check.
Two characteristics; distinguishes check from other Bills of Exchange:
1. Drawn on bank - Drawee is always a BANK
2. Always payable on demand
If drawn by the bank, not necessarily a check; it depends:
If Drawee is a bank, it is called-- bank draft.
If drawee is not a bank (individual person or corporation other than bank) - NOT
a check.
POST- DATED CHECKS
Some people contend they are not payable on demand, so look at when it is to
be paid because when that time arrives, it will be considered payable on
demand.
Even if almost like money, is never money. There are types of checks which are
in banking practice are deemed cash but its effect are not that of a cash.
Example: Managers check used to pay obligation. Payment will not extinguish
the obligation until it is enchased. Managers or cashiers check are deemed cash
but the legal effects are the same with other check.
LEGAL EFFECT: effect of Payment is ONLY when already encash.
NOTE: While in practice, it is deemed cash, it is still not money.
TYPES OF CHECK:
1. Memorandum check
On its face, appears memo.
The effect is the drawer becomes absolutely liable to the payee.
The drawer is treated like that of a maker thus, primarily/personally liable
even if there is a drawee.
Given when:
a. You dont really want to pay in check; or
b. You dont want the check to be encashed; or
c. You just want to present something to the creditor as proof of good pay.
When presented, there are instances that the creditor or debtor will require
return without being enchased.
NOTE: You dont have to wait for maturity to be paid by the drawer because, it is
used for purposes of exhibition.
2. Cashiers check
Signed and certified by cashier. After signing, it becomes the absolute
obligation of bank to pay that check.

Almost like in effect with:

a. a managers check in terms of effect EXCEPT that different person signs it for
purposes of certification.
b. a certified check because the bank is already bound bearing the signature of
cashier or manager.
3. Managers check
preferred because it bears the obligation of the bank to pay absolutely. So,
more security. A certified check, either can be cashiers check or some
other officers who are authorized to sign on behalf of the bank.
4. Crossed check
bears two parallel lines, usually at the left hand of the check.
Two parallel lines may contain:
a. name of entity (specially crossed),
b. If blank or NO company or no name of entity (general crossed check).
SPECIALLY CORSSED
means that the entity must be the owner of the account where the check will
be deposited.
GENERALLY CROSSED
Anyone can have that check deposited but never encashed.
EFFECTS: the same that, crossed checks can never be encashed but only be
deposited at the account of person made as payee.
Situation: There are people who cant wait to clear the check (it takes three banking
days). So, what they prefer is have the check discounted. If discounted, then it
discounts to the person who is not the payee. It can still be deposited but cant require
the bank to have it encashed.
If specially crossed, you cant do that. Entity named in between parallel lines
has to be the one to have the check deposited in its account.
It can be that what is written in between is the name of the drawee or name of
bank who will pay the check.
STALE CHECKS
after 6 months or 180 days, reckoned from:
a. Date of check supposedly or issuance of check.
b. If post-dated, count on the date written at the instrument because only at that
time that it becomes demandable.