We have a customer who wrote a post dated check to a business on 09/22/2011. The check is dated 10/22/2011. The customer wrote in the memo line “Bank call me before cashing “. The customer never called the bank prior to presentment to stop payment or notify the bank of post-date or any concerns regarding the check. The payee brought in the check on 9/26/2011 and requested a cashier’s check to replace the personal check, which the teller completed after verifying the funds and the signature. Our account terms and conditions say that the bank may charge a post-dated check to the account unless the customer notifies the bank in writing in a reasonable time for the bank to act on it. On 10/4/2011 the customer called the bank to place a stop payment and learned that the check had been paid, and is now demanding payment due to the post-date on the check. Is the bank’s liability affected by the fact that the check was presented to a teller for payment? We feel like the customer did not meet their responsibility of notifying the bank in time to act on the check.
First, let’s look at what the Texas Business and Commerce Code says –
(c) A bank may charge against the account of a customer a check that is otherwise properly payable from the account, even though payment was made before the date of the check, unless the customer has given notice to the bank of the postdating describing the check with reasonable certainty. The notice is effective for the period stated in Section 4-403(b) for stop-payment orders, and must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it before the bank takes any action with respect to the check described in Section 4-303. If a bank charges against the account of a customer a check before the date stated in the notice of postdating, the bank is liable for damages for the loss resulting from its act. The loss may include damages for dishonor of subsequent items under Section 4-402.
The fact it was presented at a Teller window and has a note in the memo line indicating that the bank should contact the customer before negotiating the check does seem to complicate things. If the check had paid through the usual automated check collection process it would be easier to argue that notice was not given and therefore the bank could charge it against the account of the customer. However, since the customer did not comply with the specifics of 4-403(b) for stop payment orders they in fact did not provide adequate notice and you can charge it against their account.
You also want to review your account agreements to make sure that it includes language that the memo line is for the convenience and use of the customer and is not binding on the bank.