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#2139107 - 07/21/17 05:48 PM Stop Payment Cashier's Check
George Offline
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I know the reg says we have to wait 90 days, but are there exceptions?

Here is the situation: mailed payment out of a customers escrow account for their insurance renewal premium at the end of June. We received notification that payment has not been received and that the policy will be cancelled if payment is not made.

Does this justify us placing a stop payment on the cashier's check prior to the 90 days?

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#2139139 - 07/21/17 07:41 PM Re: Stop Payment Cashier's Check George
John Burnett Offline
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You can do what you want operationally, but if that check is presented for payment by a party entitled to enforce payment, you will pay it or risk paying even more if the party has to sue you to collect.

Have you obtained a declaration from the remitter that the check has been lost, stolen or destroyed, claiming reimbursement? If you have, UCC 3-312 will cover you if after 90 days from the issue date of the lost check honor the claim and refuse payment on the original citing "UCC 3-312 claim paid." But that protection doesn't kick in until the end of the 90-day period.

So you're left with a risk decision. What are the chances the original will show up?
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#2139140 - 07/21/17 07:53 PM Re: Stop Payment Cashier's Check George
George Offline
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Thank you, John, I appreciate the information! So, to clarify, no matter what we do internally (i.e. place a stop pay), if the check is received by the Payee and deposited/cashed within 90 days, then we are still legally obligated to pay the funds? Even if we are the remitter on the check? Personally, I think the chances of the check showing up now are slim as it has been almost a month since it was mailed out.

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#2139154 - 07/21/17 08:56 PM Re: Stop Payment Cashier's Check George
John Burnett Offline
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John Burnett
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Yes to your first question, unless you can show that the party depositing/presenting the check was not entitled to enforce payment (if there is a forged indorsement involved, for example).
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#2139159 - 07/21/17 09:17 PM Re: Stop Payment Cashier's Check George
George Offline
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Posts: 364
Fair enough. Thank you sir!

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#2152588 - 11/07/17 09:21 PM Re: Stop Payment Cashier's Check George
justsayjulie Offline
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back home again
Tagging on to this discussion. The same holds true for a situation in which a client was scammed, purchased a cashier's check, and after mailing it to the scam artist, had second thoughts. Correct?
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#2152595 - 11/07/17 09:36 PM Re: Stop Payment Cashier's Check George
rlcarey Online
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rlcarey
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Galveston, TX
It is no longer the client's obligation - it is a direct obligation of the bank.
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#2152604 - 11/07/17 09:51 PM Re: Stop Payment Cashier's Check George
justsayjulie Offline
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back home again
Thank you, Randy.
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#2153789 - 11/15/17 09:47 PM Re: Stop Payment Cashier's Check justsayjulie
John Burnett Offline
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John Burnett
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Cape Cod
If the purchaser still has the check, there's no problem. It can be voided and no stop payment is needed. But once the cashier's check is in the payee's hands, the bank has no choice but to pay the check when it's presented by someone with the right to enforce payment. A lost/stolen/destroyed claim under UCC 3-312 won't help here, either, because the purchaser/remitter can't honestly provide the affidavit needed.
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John S. Burnett
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#2153826 - 11/16/17 10:37 AM Re: Stop Payment Cashier's Check John Burnett
Elwood P. Dowd Offline
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Elwood P. Dowd
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Next to Harvey
I can stop payment on a check drawn on my account that I signed. I cannot stop payment on a check drawn on John's account that John signed.

So, if a check is drawn on a bank and signed by a bank employee...
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