CASE DIGEST: Ang Tek Lian v. Court of Appeals

 

ANG TEK LIAN, petitioner, vs. THE COURT OF APPEALS, respondent

G.R. No. L-2516                 |              September 25, 1950

FACTS:

Knowing he had no funds therefor, Ang Tek Lian drew on November 16, 1946 a check upon China Banking Corporation for the sum of P4,000, payable to the order of "cash". He delivered it to Lee Hua Hong in exchange for money which the latter handed in. The next business day, the check was presented by Lee Hua Hong to the drawee bank for payment, but it was dishonored for insufficiency of funds, the balance of the deposit of Ang Tek Lian being P335 only.

Despite repeated efforts to notify him that the check had been dishonored by the bank, appellant could not be located anywhere, until he was summoned in the City Fiscal's Office in view of the complaint for estafa filed in connection therewith; and that appellant has not paid as yet the amount of the check, or any part thereof.

Ang Tek argued that as the check had been made payable to "cash" and had not been endorsed he is not guilty of the offense charged. Based on the proposition that "by uniform practice of all banks in the Philippines a check so drawn is invariably dishonored," he reasoned that when the offended party accepted the check from him, he did so with full knowledge that it would be dishonored upon presentment.

ISSUE:

Whether or not Ang Tek Lian is guilty of estafa

RULING:

Ang Tek Lian was properly held liable. In this connection, it must be stated that, as explained in People vs. Fernandez, estafa is committed by issuing either a postdated check or an ordinary check to accomplish the deceit.

Under the Negotiable Instruments Law, 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.

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 possible 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 of some other person known to it—be obtained. But where the Bank is satisfied of the identity and/or the 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.

A check payable to bearer is authority for payment to the holder. Where a check is in the ordinary form, and is payable to bearer, so that no indorsement is required, a bank, to which it is presented for payment, need not have the holder identified, and is not negligent in failing to do so.

Consequently, a drawee bank to which a bearer check is presented for payment need not necessarily have the holder identified and ordinarily may not be charged with negligence in failing to do so. If the bank has no reasonable cause for suspecting any irregularity, it will be protected in paying a bearer check, 'no matter what facts unknown to it may have prior to the presentment.