Published 7 February 2022, The Daily Tribune

Prudence is touted the mother of all virtues for it teaches one to exercise wisdom, insight, and carefulness in one’s dealings. One of the most practical applications of prudence is the matter of safekeeping valuable items such as cash, cards, jewelry, checks and digital devices that have access to online banking.

We all know what to do if our wallet goes missing — we call our banks to block access to the missing debit or credit cards, and apply for new ones immediately. If jewels go missing, the first step is to contact the insurance provider for possible relief. But when checks go missing, the next step might not be readily known to all for the implications might be more complex than missing cash or jewels. The most prudent action is of course to reach out to one’s bank and inform them of the loss, and provide details such as account number, check number, and other helpful information.

But when a lost check is already out there and cannot be accounted for, one concern that comes to mind is possible liability under the Bouncing Checks Law or Batas Pambansa (BP) 22 that might arise if an unscrupulous person getting hold of the checks decides to improperly use the same. After all, a check is one convenient way of payment, a means of accessing funds in your account issued in the name of the payee. More formally speaking, a check is a bill of exchange drawn on a bank payable on demand.

But lost checks are not always a lost cause.

Under Act 2031 also known as Negotiable Instruments Law, where an incomplete instrument (or a check) has not been delivered, it will not, if completed and negotiated without authority of the check owner/issuer be a valid contract in the hands of any holder, as against any person whose signature was placed thereon before delivery (Sec. 15). For instance, this applies in the case of blank checks that have been pre-signed by the owner.

This is because every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. As between immediate parties and as regards a remote party other than a holder in due course, the delivery, in order to be effectual, must be made either by or under the authority of the party making, drawing, accepting or indorsing, as the case may be. In other words, the check must be delivered to the payee by the authority of the issuer.

But where the instrument is in the hands of a holder in due course, a valid delivery thereof by all parties prior to him so as to make them liable to him is conclusively presumed. And where the instrument is no longer in the possession of a party whose signature appears thereon, a valid and intentional delivery by him is presumed until the contrary is proved (Sec. 16).

Applying these provisions, if a check is incomplete and undelivered, the issuer cannot be liable to anyone who relies on the check even if a valid signature appears therein.

In the case of Samson Ching vs Clarita Nicdao and Hon. Court of Appeals (GR 141181, 27 April 2007), petitioner filed several counts of violation of BP 22 against respondent. Petitioner alleged that respondent had issued him a check in the amount of P20 million in payment of her obligation. However, the check was dishonored by the drawee bank for the reason that it was drawn against insufficient funds.

The Court of Appeals found plausible respondent’s defense that the check was among the ones she has the practice of pre-signing as a matter of business practice, and then leaving the details to be filled out later. The subject pre-signed blank check was the same one that had gone missing way back in 1995, and the check was never delivered by respondent to petitioner. As such, the said check without the details as to the date, amount and payee, was an incomplete and undelivered instrument when it went missing, and ended up in petitioner’s hands.

On the civil liability arising from the checks, the Supreme Court applied the foregoing provisions of the Negotiable Instruments Law in ruling that petitioner did not acquire any right or interest over the check and cannot assert any cause of action founded on said check. The check had been a stolen check and had never been issued nor delivered by respondent to petitioner. As such, the owner cannot be obligated to make good the stolen check and cannot, therefore, be held liable for violation of BP 22.

Nothing is better than vigilance when it comes to taking care of one’s belongings, especially checks. Given their value and ability to cause headaches, not to mention liabilities, legal matters arising from lost checks are best prevented by prudent measures, rather than cured.

For more of Dean Nilo Divina’s legal tidbits, please visit For comments and questions, please send an email to