G.R. No. 150228, 20 July 2009


The President and Vice President of Philippine Racing Club Inc. went abroad for the corporation’s business. In order not to disrupt operations in their absence, they pre-signed several checks to have available cash to settle obligations that might become due. The checks were entrusted to the accountant. A certain John Doe presented to the bank for encashment a couple of checks.

These two (2) checks were among those pre-signed. The checks had similar infirmities and irregularities. Despite said irregularities, the bank did not verify and confirm the legitimacy of the checks but immediately encashed them.

An investigation yielded that there was no transaction involving the payment out of the subject checks. It had been found out, however, that one Clarita Mesina completed without authority the entries on the pre-signed checks.


Whether the proximate cause of the wrongful encashment was due to (a) the bank’s failure to make a verification or (b) the pre-signing of blank checks and leaving the same with its employees.


The bank insists that pursuant to Sections 14 and 16 of the NIL, it could validly presume, upon presentation of the checks, that the party who filled up the blanks had authority and that a valid and intentional delivery to the party presenting the checks had taken place.

It argues that there was delivery because the gross negligence of the accountant in safekeeping the checks should be treated as a voluntary delivery by the maker who is estopped from claiming non-delivery of the instrument.

The contention would have been correct if the subject checks were correctly and properly filled out by the thief and presented to the bank in good order. In that instance, there would be nothing to give notice to the bank of any infirmity in the title of the holder of the checks and it could validly presume that there was proper delivery to the holder.

The bank could not be faulted if it encashed the checks under those circumstances. In all, the subject checks are properly characterized as incomplete and undelivered instruments making Section 15 of the NIL applicable.

The practice of pre-signing of blank checks is a seriously negligent behavior and a highly risky means of ensuring the efficient operation of businesses. It should be foreseen that the pre-signed blank checks could fall into the wrong hands.

Following established jurisprudence, the allocation of sixty percent (60%) of the actual damages involved in this case to the bank is proper. The corporation also bears forty percent (40%) of the loss.

*Case digest by Teonilo M. Bagalanon Jr., JD-IV, Andres Bonifacio Law School, SY 2019-2020