Ang Tek Lian vs.

Court of Appeals
L-2516 September, 1950

Facts:
Ang Tek Lian knowing that he had no funds therefore, drew a check upon China Banking Corporation payable to the
order of “cash”. He delivered it to Lee Hua Hong in exchange for money. The check was presented by Lee Hua hong to the
drawee bank for payment, but it w3as dishonored for insufficiency of funds. With this, Ang Tek Lian was convicted of estafa.

Issue:
Whether or not the check issued by Ang Tek Lian that is payable to the order to “cash” and not have been indorsed
by Ang Tek 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 “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 solvency, it has the right to demand identification or assurance against possible complication,
such as forgery of drawer’s signature, loss of the check by the rightful owner, raising of the amount payable, etc. 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
instrument without further question; and it would incur no liability to the drawer in thus acting.

Ang Tek Lian v. Court of Appeals

[G.R. No. L-2516. September 25, 1950]

FACTS

Petitioner drew a check payable to the order of “cash” knowing that he had no funds. He delivered it in exchange of money.
Petitioner was found guilty of estafa, but petitioner argued that the check had not been indorsed by him, hence, he should
not be held guilty thereof.

ISSUE

Whether or not indorsement is necessary to negotiate a check payable to the order of “cash”.

RULING

NO. Indorsement is no longer necessary. Under the Negotiable Instruments Law (Sec. 9 [d]), 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 without the
drawer’s indorsement. Being a bearer instrument, negotiation may be done by mere delivery of the instrument.

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Ang Tek Lian vs Court of Appeals
87 Phil. 383 – Mercantile Law – Negotiable Instruments Law – Negotiable Instruments in General – Indorsement to “Cash” –
Bearer Instrument
In 1946, Ang Tek Lian approached Lee Hua and asked him if he could give him P4,000.00. He said that he meant to
withdraw from the bank but the bank’s already closed. In exchange, he gave Lee Hua a check which is “payable to the order
of ‘cash’”. The next day, Lee Hua presented the check for payment but it was dishonored due to 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 Hua and
that when the latter accepted the check without Ang tek Lian’s indorsement, he had done so fully aware of the risk he was
running thereby.
ISSUE: Whether or not Ang Tek Lian is correct.
HELD: No. Under the Negotiable Instruments Law (sec. 9 [d]), a check drawn payable to the order of “cash” is a check
payable to bearer hence a bearer instrument, and the bank may pay it to the person presenting it for payment without the
drawer’s indorsement. Where a check is made payable to the order of ‘cash’, the word “cash” does not purport to be the
name of any person, and hence the instrument is 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.