G.R. No. L-2516, 25 September 1950, 87 SCRA 383


For having issued a rubber check, Ang Tek Lian was convicted of estafa in the Court of First Instance of Manila. It appears that, knowing he had no funds therefor, Ang Tek Lian drew a check upon the 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 act. When the check was presented by Lee Hua Hong to the drawee bank for payment, it was dishonored for insufficiency of funds. Petitioner argued, however, that as the check had been made payable to “cash” and had not been endorsed by Ang Tek Lian, the defendant is not guilty of the offense charged.


Whether a check payable to cash needs indorsement?


No, a check payable to cash does not need indorsement.

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. 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.

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 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.

*Case digest by Radolf Zell Adasa, Andres Bonifacio Law School, SY 2019-2020