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87 Phil. 383 – Mercantile Law – Negotiable Instruments Law – Ang Tek Lian vs.

Court of Appeals
Negotiable Instruments in General – Indorsement to “Cash” – Bearer L-2516 September, 1950
Instrument Bengzon, J.:

Facts:
Ang Tek Lian knowing that he had no funds therefor, drew a
In 1946, Ang Tek Lian approached Lee Hua and asked him if he could check upon China Banking Corporation payable to the order of “cash”.
give him P4,000.00. He said that he meant to withdraw from the bank He delivered it toLee Hua Hong in exchange for money. The check
but the bank’s already closed. In exchange, he gave Lee Hua a check was presented by Lee Hua hong to the drawee bank for payment, but
which is “payable to the order of ‘cash’”. The next day, Lee Hua it w3as dishonored for insufficiency of funds. With this, Ang Tek Lian
presented the check for payment but it was dishonored due to was convicted of estafa.
insufficiency of funds. Lee Hua eventually sued Ang Tek Lian. In his
defense, Ang Tek Lian argued that he did not indorse the check to Lee Issue:
Hua and that when the latter accepted the check without Ang tek Whether or not the check issued by Ang Tek Lian that is
Lian’s indorsement, he had done so fully aware of the risk he was payable to the order to “cash” and not have been indorsed by Ang Tek
running thereby. Lian, making him not guilty for the crime of estafa.

Held:
No.Under Sec. 9 of NIL a check drawn payable to the order of
ISSUE: Whether or not Ang Tek Lian is correct. “cash” is a check payable to bearer and the bank may pay it to the
person presenting it for payment without the drawer’s indorsement.
However, if the bank is not sure of the bearer’s identity or financial
HELD: No. Under the Negotiable Instruments Law (sec. 9 [d]), a solvency, it has the right to demand identification or assurance against
check drawn payable to the order of “cash” is a check payable to bearer possible complication, such as forgery of drawer’s signature, loss of
hence a bearer instrument, and the bank may pay it to the person the check by the rightful owner, raising of the amount payable, etc.
presenting it for payment without the drawer’s indorsement. Where a But where the bank is satisfied of the identity or economic standing of
the bearer who tenders the check for collection, it will pay the
check is made payable to the order of ‘cash’, the word “cash” does not
instrument without further question; and it would incur no liability to
purport to be the name of any person, and hence the instrument is
the drawer in thus acting.
payable to bearer. The drawee bank need not obtain any indorsement
of the check, but may pay it to the person presenting it without any
indorsement.

Ang Tek Lian vs. CA

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