Ang Tek Lian vs Court of Appeals

FACTS:
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.