I believe that would be negligence. If the bank could prove, as you admit, that the check was signed in blank, you would probably be out the money. Since the bank had no idea that the checks were stolen, the signature matches their records, and thus, are properly payable. That said, if proof could be found against the person that stole the check, criminal proceedings could probably be taken.
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David J Mulkerin, CRCM
All opinions expressed are mine and not those of my employer and are not to be taken as legal advice.