Ang Tek Lian vs CA

Facts:
● Nov 16 1946: Ang Tek Lian, knowing that he had insufficient funds, drew a check upon
China Bank Corp for 4k payable to the order of “cash”
○ Delivered checks to Lee Hua Hong in exchange of money
● Nov 18 1946: check was presented by Lee Hua Hong to the drawee bank for payment but
it was dishonored for insufficiency of funds (P335 lang laman ng bank ni Ang Tek Lian;
rubber check yung tawag ng case sa check ni Lian)
● Lee Hua Hong testimony:
○ Ang Tek Lian went to his office and asked him to exchange check with cash
alleging that he needs 4k but could not withdraw from the bank as the bank was
already closed
■ Was assured that Lian had sufficient funds because they used to borrow
from each other, Lian owns a hotel (North Bay Hotel) so he trusted him
○ Despite efforts to notify Lian that checks were dishonored, Lian could not be
located anywhere
● Lee Hua Hong filed a complaint for estafa.
● CFI: convicted Lian
● CA: affirmed
● Ang Tek Lian contends that:
○ As the check had been made payable to “cash” and had not been endorsed by Ang
Tek Lian, he is not guilty
■ Logic of Lian: Lee Hua Hong accepted the check with full knowledge that
it would be dishonored hence Lian could not have acted fraudulently
Issue: W/N Ang Tek Lian is not guilty of estafa as he did not endorse the rubber check
Held:
NO. Under NIL, a check drawn payable to the order of “cash” is a check payable to bearer, and
the bank may pay it to the person presenting it for payment w/o the drawer’s indorsement. A
check payable to the order of cash is a bearer instrument. The word cash does not purport to be
the name of any person hence, the instrument is payable to bearer.
● If the bank is not sure of the bearer’s identity or financial solvency, it has the right to
demand identification or assurance against possible complications like: Forgery of
drawer’s signature, Loss of check of rightful owner, Raising of amount payable
○ In cases like this, the bank may require indorsement BUT where the bank is
satisfied of the identity, it will pay the instrument w/o question and it would incur
NO LIABILITY to the drawer.
● IN THIS CASE, the form of check that Ang Tek Lian issued was totally unconnected
with its dishonor. The check was returned unsatisfied because the drawer had insufficient
funds and not because the drawer’s indorsement is lacking.
Dispositive: DENIED