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Gempesaw v. Court of Appeals [G.R. No. 92244. February 9, 1993]

30 Jul

FACTS

Petitioner argues that respondent drawee Bank should not have honored the checks because they were “crossed checks”.

 

ISSUE

Whether or not the issuance of “crossed checks” is restrictive indorsement.

 

RULING

NO. They are not the same. In restrictive indorsement, the prohibition to transfer or negotiate must be written in express words at the back of the instrument, so that any subsequent party may be forewarned that ceases to be negotiable. Crossed checks, on the other hand, is done by drawing two parallel lines across the face of the check to mean that it cannot be presented for payment in cash, but can only be deposited in payee’s account. Crossing of checks do not ipso facto cause the cessation of its negotiable character.

 

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