Development Bank of Rizal v Sima Wei; G.R. No. 85419; 09 Mar 1993; 219 SCRA 736

in Legal Chyme by

Respondent Sima Wei executed and delivered to petitioner Bank a promissory note for the payment of a loan. He made partial payments on the note and months later issued two crossed checks for the full payment of his account. The checks were not delivered to petitioner Bank or to any of its representatives and later came to the possession of respondent Lee Kian Huat, who the same to the account of respondent corporation without petitioner’s indorsement.

Whether or not petitioner had acquired any right or interest on the checks.

NO. Courts have long recognized the business custom of using printed checks where blanks are provided for the date of issuance, the name of the payee, the amount payable and the drawer’s signature. All the drawer has to do when he wishes to issue a check is to properly fill up the blanks and sign it. However, the mere fact that he has done these does not give rise to any liability on his part, until and unless the check is delivered to the payee or his representative. A negotiable instrument, of which a check is, is not only a written evidence of a contract right but is also a species of property. Just as a deed to a piece of land must be delivered in order to convey title to the grantee, so must a negotiable instrument be delivered to the payee in order to evidence its existence as a binding contract.

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