The entity to which the check is presented on time has the obligation to pay it in whole or in part if there are funds available in the drawer’s account, or to refuse to pay it if there is any suspicion of forgery of the signature or if it has been reported stolen or lost. If a check is presented for collection on time and is not paid in whole or in part, the responsibility will be of the signer, and if there are endorsers and guarantors.
On some occasion you may have wondered what happens if the money on the check is not paid or if it has been lost or stolen.
As the Bank of Spain indicates in its web, in these cases the entity in which the check is presented in term, has the obligation to pay it total or partially if there are available funds in the drawer’s account, or to reject its payment if there is some suspicion on the falsification of its signature or its theft or loss has been denounced.
If a check is presented for collection on time and is not paid in whole or in part, the liability will be that of the signer, and if there are endorsers and guarantors. In this case, the following actions may be exercised:
(a) Exchange or return actions against the drawer, the endorsers and the guarantors.
It consists of claiming:
- To the one who issues and signs the check (the drawer).
- To the endorsers and guarantors, if any, provided that the check has been presented in due time and the lack of payment has been accredited by means of:
- notarized protest
- declaration of the drawee, dated and written on the check with indication of the day of presentation, or
- a declaration from a clearing house, stating that the check has been presented on time and that it has not been paid.
The protest or equivalent declaration must be made before the end of the filing period, unless the filing is made in the last eight days of the period, in which case it may be made within eight days of filing.
The time limit for claims against the drawer, endorsers and guarantors is six months from the end of the filing period.
b) Other general actions:
- Causal actions, arising from the business that motivated the use of a check (for example, a purchase and sale in which the price was paid with a check).
- Action of unjust enrichment against the drawer and the endorsers, in the case of loss of the exchange and causal actions.
In case of loss or theft of the check, you can initiate a voluntary jurisdiction proceeding before the Commercial Court or the Notary, requesting that the check not be paid to a third party, that the check be annulled or that your ownership be recognized.
Prescription
The statute of limitations for a check is 6 months from the expiration of the term of presentation, i.e., it prescribes six months and fifteen days from the date of issuance of the document.
In the case of a bank check, the courts of law apply the ordinary limitation period of 5 years and 15 days in accordance with Article 1964 of the Civil Code, as amended by the first final provision of Law 42/2015.
For further information, please consult with Legal advice
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