Bank of America v.

PRCI

In Bank of America v. PRCI, the Supreme Court applied the last clear
chance doctrine in ordering a bank to return the money that it disbursed
since the presence of highly irregular circumstances should have
cautioned the bank to not encash the checks.

In Bank of America, the President and Vice-President of the client

corporation pre-signed checks and entrusted these to the company
accountant. The officers pre-signed the checks as they did not want to
disrupt company business operations while they were abroad. Two of
these checks were encashed by an unknown individual.

On each encashed check, “ONE HUNDRED TEN THOUSAND

PESOS ONLY” was typewritten on the blank reserved for the payee’s
name. Above that, “CASH” was typewritten. On the blank reserved for
the amount, “One Hundred Ten Thousand Pesos” was printed by a
check writer.

In ruling that the bank was negligent, the Supreme Court said, “the
presence of these irregularities in each check should have alerted the
petitioner to be cautious before proceeding to encash them which it did
not do.” The Supreme Court pointed out that the bank could have
simply phoned its client to clarify the irregularities and ask whether it
actually ordered the payment. However, the bank did no such thing.