87 Phil. 383 – Mercantile Law – Negotiable Instruments Law – Negotiable Instruments in General – Indorsement to “Cash – !earer Instrument In 1946, Ang Tek Tek Lian approached Lee Hua and asked as ked him if he could c ould give him P4,00000 He said !ha! he mean! !o "i!hdra" from !he #ank #u! !he #ank$s alread% closed In e&change, he gave Lee Hua a check "hich is 'pa%a#le !o !he order of (cash$) The ne&! da%, Lee Hua presen!ed !he check for pa%men! #u! i! "as dishonored due due !o insufficienc% of funds Lee Hua even!uall% sued Ang Tek Tek Lian In his defense, Ang Tek Tek Lian argued !ha! he did no! indorse !he check !o Lee Hua and !ha! "hen !he la!!er accep!ed !he check "i!hou! Ang !ek Lian$s indorsemen!, he had done so full% a"are of !he risk he "as running !here#% ISSUE: *he!her or no! Ang Tek Lian is correc! HELD: +o nder !he +ego!ia#le Ins!rumen!s La" -sec 9 .d/, a check dra"n pa%a#le pa%a#le !o !he order of 'cash) is a check pa%a#le !o #earer hence a #earer ins!rumen!, and !he #ank ma% pa% i! !o !he person presen!ing i! for pa%men! "i!hou! !he dra"er$s indorsemen! *here a check is made pa%a#le !o !he order of (cash$, !he "ord 'cash) does no! purpor! !o #e !he name of an% person, and hence !he ins!rumen! is pa%a#le !o #earer The dra"ee #ank need no! o#!ain o#!ain an% indorsemen! of !he check, #u! ma% pa% i! !o !he person presen!ing i! "i!hou! an% indorsemen!
la"philne!
G.R. No. L-2516
epu#lic of !he Philippines SUPREME COURT 2anila 3+ A+5 G.R. No. L-2516
September 25, 15!
"NG TE# LI"N, pe!i!ioner, vs THE COURT O$ "PPE"LS, responden!
Laurel" #abido" #abido" $lmario and Laurel %or &etitioner. &etitioner. '%%ice o% the #olicitor General (eli) !autista $ngelo and #olicitor Manuel *omacru+ *omacru+ %or res&ondent. %ENG&ON, J.:
or having issued a ru##er check, Ang Tek Lian "as convic!ed of esta%a in !he 5our! of irs! Ins!ance of 2anila The 5our! of Appeals affirmed !he verdic! I! appears !ha!, kno"ing he had no funds !herefor, Ang Tek Lian dre" on 7a!urda%, +ovem#er 16, 1946, !he check 3&hi#i!s A upon !he 5hina anking 5orpora!ion for !he sum of P4,000, pa%a#le !o !he order of 8cash8 He delivered i! !o Lee Hua Hong in e&change for mone% "hich !he la!!er handed in ac! n +ovem#er 1:, 1946, !he ne&! #usiness da%, !he check "as presen!ed #% Lee Hua Hong !o !he dra"ee #ank for pa%men!, #u! i! "as dishonored for insufficienc% of funds, !he #alance of !he deposi! of Ang Tek Lian on #o!h da!es #eing P;;< onl% The 5our! of Appeals #elieved !he version of Lee Huan Hong "ho !es!ified !ha! 8on +ovem#er 16, 1946, appellan! "en! !o his -complainan!=s office, a! 1>1? Herran, Paco, 2anila, and asked him !o e&change 3&hi#i! A @ "hich he -appellan! !hen #rough! "i!h him @ "i!h cash alleging !ha! he needed #adl% !he sum of P4,000 represen!ed #% !he check, #u! could no! "i!hdra" i! from !he #ank, i! #eing !hen alread% closed !ha! in vie" of !his reBues! and rel%ing upon appellan!=s assurance !ha! he had sufficien! funds in !he #lank !o mee! 3&hi#i! A, and #ecause !he% used !o #orro" mone% fr om each o!her, even #efore !he "ar, and appellan! o"ns a ho!el and res!auran! kno"n as !he +or!h a% Ho!el, said complainan! delivered !o him, on !he same da!e, !he sum of P4,000 in cash !ha! despi!e repea!ed effor!s !o no!if% him !ha! !he check had #een dishonored #% !he #ank, appellan! could no! #e loca!ed an%C"here, un!il he "as summoned in !he 5i!% iscal=s ffice in vie" of !he complain! for esta%a filed in connec!ion !here"i!h and !ha! appellan! has no! paid as %e! !he amoun! of !he check, or an% par! !hereof8 Inasmuch as !he findings of fac! of !he 5our! of Appeals are final, !he onl% Bues!ion of la" for decision is "he!her under !he fac!s found, esta%a had #een accomplished Ar!icle ;1<, paragraph -d, su#sec!ion > of !he evised Penal 5ode, punishes s"indling commi!!ed 8% pos! da!ing a check, or issuing such check in pa%men! of an o#liga!ion !he offender kno"ing !ha! a! !he !ime he had no funds in !he #ank, or !he funds deposi!ed #% him in !he #ank "ere no! sufficien! !o cover !he amoun! of !he check, and "i!hou! informing !he pa%ee of such circums!ances8 *e #elieve !ha! under !his provision of la" Ang Tek Lian "as properl% held lia#le In !his connec!ion, i! mus! #e s!a!ed !ha!, as e&plained in Peo&le ,s. (ernande+ -<9 Phil, 61<, esta%a is commi!!ed #% issuing ei!her a pos!da!ed check or an ordinar% check !o accomplish !he decei! I! is argued, ho"ever, !ha! as !he check had #een made pa%a#le !o 8cash8 and had no! #een endorsed #% Ang Tek Lian, !he defendan! is no! guil!% of !he offense charged ased on !he proposi!ion !ha! 8#% uniform prac!ice of all #anks in !he Philippines a check so dra"n is invaria#l% dishonored,8 !he follo"ing line of reasoning is advanced in suppor! of !he argumen!D *hen, !herefore, he -!he offended par!% accep!ed !he check -3&hi#i! A from !he appellan!, he did so "i!h full kno"ledge !ha! i! "ould #e dishonored upon presen!men! In !ha! sense, !he appellan! could no! #e said !o have ac!ed fraudulen!l% #ecause !he complainan!, in so accep!ing !he check as i! "as
dra"n, mus! #e considered, #% ever% ra!ional considera!ion, !o have done so full% a"are of !he risk he "as running !here#%8 -rief for !he appellan!, p 11 *e are no! a"are of !he uniformi!% of such prac!ice Ins!ances have undou#!edl% occurred "herein !he ank reBuired !he indorsemen! of !he dra"er #efore honoring a check pa%a#le !o 8cash8 u! cases !here are !oo, "here no such reBuiremen! had #een made I! depends upon !he circums!ances of each !ransac!ion nder !he +ego!ia#le Ins!rumen!s La" -sec 9 .d /, a check dra"n pa%a#le !o !he order of 8cash8 is a check pa%a#le !o #earer, and !he #ank ma% pa% i! !o !he person presen!ing i! for pa%men! "i!hou! !he dra"er=s indorsemen! A check pa%a#le !o !he order of cash is a #earer ins!rumen! acal ,s. +a!ional 5i!% ank of +e" Eork -19;;, 146 2isc, ?;> >6> + E 7, :;9 5lear% ,s. Fe eck Pla!e Glass 5o -190?, <4 2isc, <;? 104 + E 7, :;1 2assachuse!!s onding Insurance 5o ,s. Pi!!s#urgh Pipe 7uppl% 5o -Te& 5iv App, 19;9, 1;< 7 * ->d, :1: #ee also H 5ook 7on ,s. 2ood% -1916, 1? Ga App, 46< :? 7 3, ?1; *here a check is made pa%a#le !o !he order of 8cash8, !he "ord cash 8does no! purpor! !o #e !he name of an% person8, and hence !he ins!rumen! is pa%a#le !o #earer The dra"ee #ank need no! o#!ain an% indorsemen! of !he check, #u! ma% pa% i! !o !he person presen!ing i! "i!hou! an% indorsemen! -ollmann, anks and anking, Permanen! 3di!ion, Jol 6, p 494 f course, if !he #ank is no! sure of !he #earer=s iden!i!% or financial solvenc%, i! has !he righ! !o demand iden!ifica!ion and Kor assurance agains! possi#le complica!ions, @ for ins!ance, - a forger% of dra"er=s signa!ure, -b loss of !he check #% !he righ!ful o"ner, -c raising of !he amoun! pa%a#le, e!c The #ank ma% !herefore reBuire, for i!s pro!ec!ion, !ha! !he indorsemen! of !he dra"er @ or of some o!her person kno"n !o i! @ #e o#!ained u! "here !he ank is sa!isfied of !he iden!i!% and Kor !he economic s!anding of !he #earer "ho !enders !he check for collec!ion, i! "ill pa% !he ins!rumen! "i!hou! fur!her Bues!ion and i! "ould incur no lia#ili!% !o !he dra"er in !hus ac!ing A check pa%a#le !o #earer is au!hori!% for pa%men! !o holder *here a check is in !he ordinar% form, and is pa%a#le !o #earer, so !ha! no indorsemen! is reBuired, a #ank, !o "hich i! is presen!ed for pa%men!, need no! have !he holder iden!ified, and is no! negligen! in falling !o do so -2ichie on anks and anking, Permanen! 3di!ion, Jol <, p ;4; 5onseBuen!l%, a dra"ee #ank !o "hich a #earer check is presen!ed for pa%men! need no! necessaril% have !he holder iden!ified and ordinaril% ma% no! #e charged "i!h negligence in failing !o do so 7ee pinions 65D> and 65D; If !he #ank has no reasona#le cause for suspec!ing an% irregulari!%, i! "ill #e pro!ec!ed in pa%ing a #earer check, 8no ma!!er "ha! fac!s unkno"n !o i! ma% have occurred prior !o !he presen!men!8 1 2orse, anks and anking, sec ;9;
Al!hough a #ank is en!i!led !o pa% !he amoun! of a #earer check "i!hou! fur!her inBuir%, i! is en!irel% reasona#le for !he #ank !o insis! !ha! holder give sa!isfac!or% proof of his iden!i!% -Pa!on=s Figes!, Jol I, p 10:9 An%"a%, i! is significan!, and conclusive, !ha! !he form of !he check 3&hi#i! A "as !o!all% unconnec!ed "i!h i!s dishonor The 5our! of Appeals declared !ha! i! "as re!urned unsa!isfied because the drawer had insu%%icient %unds @ no! #ecause !he dra"er=s indorsemen! "as lacking *herefore, !here #eing no Bues!ion as !o !he correc!ness of !he penal!% imposed on !he appellan!, !he "ri! of certiorari is denied and !he decision of !he 5our! of Appeals is here#% affirmed, "i!h cos!s Moran" C. -." '+aeta" Paras" Pablo" *uason" and e/es" --." concur
The La"phil Proec! C Arellano La" ounda!ion
