Ang Tek Lian vs.

Court of Appeals
Facts: Knowing that he had no funds therefore, Ang Tek Lian drew a check for the sum of P 4,000 payable to the order of “cash”. He delivered it to Lee Hua Hong in exchange for money which the latter handed in the act. The check was dishonored upon presentment due to insufficiency of funds. The petitioner was convicted of Estafa in the CFI Manila. The CA affirmed the verdict. Ang Tek LIan filed a petition to the Supreme Court. Issue: Whether the petitioner cannot be convicted of Estafa because the check was made payable to “cash” and had not been endorsed by Ang Tek Lian. Held: No. Under the Negotiable Instruments Law, a check drawn payable to “cash” is a check payable to the order of the bearer, and the bank may pay it to the person presenting it for payment without the drawer’s indorsement. Of course if the bank is not sure of the bearer’s identity or financial solvency, it has the right to demand identification and/or assurance against complications,-- for instance, (a) forgery of drawer’s signature, (b) loss of the check by the rightful owner, (c) raising of the amount payable, etc. The bank may therefore require for its protection, that the indorsement of the drawer—or some other person known to it—be obtained. But where the Bank is satisfied of the identity/or the economic standing of the bearer who tenders the check for collection, it will pay the instrument without further question; and it will incur no liability to the drawer in thus acting. The Court of Appeals declared that it was returned unsatisfied because the drawer had insufficient funds—not because the drawer’s indorsement was lacking.

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