KINDS OF

CHEQUES
CABIGTING, MARIA QUEENIE LILIRAE
PURZUELO, DANIELLE
DEFINITION
• Cheque is a written statement containing an
unconditional order, addressed to a banker, signed
by the person who has deposited money with the
banker, requiring him to pay a certain amount of
money on demand, or to the order of certain
person or to the bearer of the instrument.
PARTS OF CHECK
KINDS OF CHEQUES
Cheques

Open Check Crossed Check

Bearer Check Order Check General Crossing Special Crossing

BEARER CHEQUE
• If a drawer orders the bank to pay a stated sum of
money to the bearer it is called a bearer cheque
• Any person who lawfully possess a bearer check is
entitled to receive payment of that check
• The cheque can be marked "cash," without naming
anyone in particular
BEARER CHEQUE
ORDER CHEQUE
• If a cheque is to the order of a person in whose
favor cheque is drawn it is called an order cheque
• The order cheque is paid by the bank only when the
bank is satisfied about the identity of the payee
ORDER CHEQUE
CROSSED CHEQUES
• It is written in the same as that of bearer cheque
but issuer specifically specifies it as account payee
on the left hand top corner or simply crosses it
twice with two parallel lines on face of the cheque
CROSSED CHEQUES
• It cannot be paid on the counter of the drawee bank
• It will be deposited in the account of a person in
whose order or favor it is drawn
• It means that it could only be deposited and could
not be converted into cash
WAYS OF CROSSING A CHEQUE
• The crossing may be “Special” wherein between
the two parallel lines is written the name of a bank
or business institution, in which case the drawee
should pay only with the intervention of that bank
WAYS OF CROSSING A CHEQUE
• It may also be “General” wherein between two
parallel lines the words “an Co.” or none at all, in
which case the drawee should not encash the same
but merely accept the same for deposit
EFFECTS OF CROSSED CHEQUES
1. The cheque may not be encashed but only
deposited in the bank
2. The cheque may be negotiated only once - to one
who has an account with a bank; and
EFFECTS OF CROSSED CHEQUES
3. The act of crossing the cheque serves as a
warning to the holder that the cheque has been
issued for a definite purpose so that he must
inquire if he has received the cheque pursuant to
that purpose; otherwise he is not a holder in due
course
QUESTION
• Is the bank liable to the payee for depositing and
encashing the crossed checks to an unauthorized
person?
• Yes. The effects of crossing a check relate to the mode of its
presentment for payment. Under Sec 72 of the Negotiable
Instruments Law, presentment for payment, to be sufficient,
must be made by the holder or by some person authorized to
receive on his behalf. Who the holder or authorized person
depends on the instruction stated on the face of the check.
The check here had been crossed and issued “for payee’s
account only.” This only signifies that the drawer s had
intended the same for deposit only by the person indicated.
• (Associated Bank vs CA, GR No. 89802, May 7, 1992)
LIABILITY OF PAYING BANKER
• The paying banker should make payment of a
crossed cheque only through the collecting banker
• In case of special crossing, the payment of cheque
should be done only to the banker show name has
been mentioned between the two parallel lines
LIABILITY OF PAYING BANKER
In case the paying banker makes payment of crossed cheque in
contravention of the above rules, its liability will be as follows:
• The paying banker will have to reimburse the true owner for any loss
that he might have suffered on account of payment being made to the
wrong person
• The paying banker shall not be entitled to debit his customers account
with the amount of payment in case payment has been made to a
wrong person since it has not followed the mandate of the customer.
Such payment will not be taken as payment made in due course.
CROSSED CHEQUE
ACCOUNT PAYEE CHEQUE
• When two parallel lines along with a crossed made
on the cheque and the word 'ACCOUNT PAYEE'
written between these lines, then that types of
cheques are called account payee cheque.
• The payment of the account payee cheque taken
place on the person, firm or company on which
name the cheque issue.
ACCOUNT PAYEE CHEQUE
STALE CHEQUE
• If any cheque issued by a holder does not get
withdrawn from the bank till three months, then
that type of cheques are called stale cheque
STALE CHEQUE
POST DATED CHEQUE
• If any cheque issued by a holder to the payee for
the upcoming withdrawn date, then that type of
cheques are called post-dated cheque
POST DATED CHEQUE
ANTE DATED CHEQUE
• If any cheque issued for the upcoming withdrawn
date but it withdraw before the date printed on the
cheque, then that type of cheques are called anti
dated cheques.
ANTE DATED CHEQUE
CASHIER'S CHEQUE
• This check is also known as an official check,
treasurer's check or manager's check
• The promise to pay is made by the bank, not the
person using the check.
• This type of check is guaranteed and is often treated
the same as cash
CASHIER'S CHEQUE
• The bank will debit your account or you can pay in
cash for the amount of the check
• The check is then written by the financial institution
and signed by the institution's cashier or manager
CHEQUES AND LAW
• Crime of Estafa which is committed by post-dating a
checque, or issuing a cheque in payment of an
obligation when the offender therein were not
sufficient to cover the amount of the check
CHEQUES AND LAW
• Batas Pambansa Blg. 22, more popularly known as B.P. 22
• This crime is committed by any person who makes or draws
and issues any check to apply on account or for value,
knowing at the time of issue that he does not have
sufficient funds in or credit with the drawee bank for the
payment of such check in full upon its presentment
CHEQUES AND LAW
• The cheque is subsequently dishonored by the
drawee bank for insufficiency of funds or credit or
would have been dishonored for the same reason
had not the drawer, without any valid reason,
ordered the bank to stop payment.
CHEQUES AND LAW
• Settled is the rule that, to constitute estafa, the act
of postdating or issuing a check in payment of an
obligation must be the efficient cause of
defraudation and, as such, it should be either prior
to or simultaneous with the act of fraud
CHEQUES AND LAW
• On the other hand, the elements of the offense under Section 1, BP Blg 22,
are:
1. The making, drawing and issuance of any check to apply to account or for
value;
2. The maker, drawer or issuer knows that at the time of issue he does not
have sufficient funds in or credit with the drawee bank for the payment of
such in full upon presentment; and
3. The check is subsequently dishonored by the drawee bank for insufficiency
of funds or credit or would have been dishonored for the same reason had
not the drawer, without any valid reason, ordered the bank to stop
payment
CHEQUES AND LAW
• It will be noted that BP Blg. 22 requires that the drawer of the
check must have knowledge at the time of issue that he does
not have sufficient funds in or credit with the drawee bank
• Under Section 2 thereof, the making, drawing and issuance of
a check, payment of which is refused by the drawee because
of insufficient funds in or credit with such bank, is prima facie
evidence of knowledge of such insufficiency when the check is
presented within 90 days from the date of the cheque
CHEQUES AND LAW
• However, the prima facie evidence of knowledge of
such insufficiency does not lie when the maker or
drawer pays the holder of the check the amount due
thereon, or makes arrangements for payment in full by
the drawee of such cheque within five (5) banking days
after receiving notice that such cheque has not been
paid by the drawee
QUESTION
• Can a drawer, from whom checks were stolen but
failed to report the same to the authorities or the
drawee bank, recover the value of the checks paid
by the drawee bank on the forged checks which was
stolen from the drawer?
• No, the drawer cannot recover. He is the one which
stands to be blamed for its
negligence/predicament.
• Security Bank and Trust Company v. Triumph
Lumber and Construction Corp., G.R. No. 126696,
Jan. 21, 1999
CASES
 TRAVEL-ON, INC., petitioner,
VS. COURT OF APPEALS AND
ARTURO S. MIRANDA,
respondents.
G.R. NO. L-56169; JUNE 26, 1992
• Doctrine: Post-dated checks as prima facie evidence for indebtedness
FACTS:
Petitioner Travel-On Inc. (Travel-On) is a travel agency while respondent has a
revolving credit line with petitioner.
Petitioner sold and delivered various airline tickets to respondent at a total price
of P278,201.57; that to settle said account, respondent paid various amounts in
cash and in kind, and issued six (6) postdated checks amounting to P115,000.00
which were all dishonored.
This was being refuted by Miranda by saying that he actually paid for his
obligations. He argued that the checks were for accommodation purposes only
since the company needed to show to its Board of Directors that its accounts
receivable was in good standing. The RTC and CA held Miranda not to be liable.
ISSUE: Whether or not the respondent is
liable of the crime charged

HELD:
Respondent is liable. The best evidence that the courts should have looked at were the
checks itself. There is a prima facie presumption that a check was issued for valuable
consideration and the provision puts the burden upon the drawer to disprove this
presumption.
The checks were clear by stating that the company was the payee and not a mere
accommodated party. And also, notice was given to the fact that the checks were
issued after a written demand by the company regarding Miranda’s unpaid liabilities.
 STATE INVESTMENT HOUSE,
petitioner, VS. INTERMEDIATE
APPELLATE COURT, ANITA PEÑA
CHUA AND HARRIS CHUA,
respondents
G.R. NO. 72764; JULY 13, 1989

Doctrine: Crossed Checks

FACTS:

New Sikatuna Wood Industries, Inc. (NSWI) requested for a loan from private
respondent Harris Chua. The latter agreed to grant the loan in the condition
that the former should wait until December 1980 when he would have the
money. Respondent’s wife issued three (3) post-dated crossed checks payable
to NSWI for a total amount of P 299,450.00.

NSWI entered into a separate agreement with petitioner State Investment

House, Inc. and negotiated eleven (11) postdated checks including the three
(3) post-dated crossed checks. The three checks were dishonored.
ISSUE: Whether or not petitioner may be
considered a holder in due course

HELD:
NO. Petitioner’s failure to inquire from the holder the purpose of the
crossed checks prevents him from being considered in good faith and
thus he is not a holder in due course.
The Negotiable Instruments Law regulating the issuance of negotiable
checks does not mention "crossed checks". Jurisprudence provides the
following effects of crossing a check:
• The check may not be encashed but only deposited in the bank
• The check may be negotiated only once—to one who has an account with a
bank
• The act of crossing the check serves the warning to the holder that the
check has been issued for a definite purpose so that he must inquire if he has
received the check pursuant to that purpose, otherwise, he is not a holder in
due course.

There was no proper presentment and the liability didn't attach to the drawer.
Thus, in the absence of due presentment, the drawer doesn’t become liable.
Nonetheless, the petitioner could still collect from NSWI if the latter doesn't
have a valid excuse from refusing payment.
 VICENTE GO, petitioner, VS.
METROPOLITAN BANK AND
TRUST CO., respondent
G.R. NO. 168842; AUGUST 11, 2010

Doctrine: Bank’s liability on crossed checks

FACTS:
Petitioner is the owner of Hope Pharmacy and he filed two separate
complaints against his employees (Chua and Tabaag) and against
Metrobank for unauthorized deposits and encashment of 32 crossed
checks payable to Hope Pharmacy for a total of of P1.4 Million.
In the RTC and CA, it was held that Chua and Tabaag were not liable for
the encashment.
Petitioner avers that without the participation and connivance of the
respondent bank, the checks could not have been accepted for deposit to
any other account, except to the petitioner’s account.
ISSUE: Whether or not the bank is negligent for encashing the
subject crossed checks to without being indorsed by the petitioner

HELD:
YES. Negligence was committed by respondent bank in accepting for
deposit the crossed checks without indorsement and in not verifying
the authenticity of the negotiation of the checks. The law imposes a
duty of extraordinary diligence on the collecting bank to scrutinize
checks deposited with it, for the purpose of determining their
genuineness and regularity.
As a business affected with public interest and because of
the nature of its functions, the banks are under obligation to
treat the accounts of its depositors with meticulous care.

The Court affirmed that the respondent bank is still liable

for moral damages, sufficient to remind it of its
responsibility to exercise extraordinary diligence in the
course of its business which is imbued with public interest.
THANK YOU.