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#2262294 - 11/09/21 05:10 PM Maker Negligence for Altered Check?
mnbanker09 Offline
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Joined: Jan 2018
Posts: 120
Company sends a check to John Doe in the mail, check is lost. Company reissues a new check to John Doe, and does not place a stop payment on original check issued. Original check is altered, and is paid by Payor bank. Maker of the check contacts Payor Bank and indicates the original check was altered and paid. Payor bank submits claim for breach of warranty; however, does the payor bank have any claim against the maker for negligence? (Failed to stop payment on item that they no longer wished to have been paid).

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#2262295 - 11/09/21 05:11 PM Re: Maker Negligence for Altered Check? mnbanker09
rlcarey Online
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Joined: Jul 2001
Posts: 79,627
Galveston, TX
No - they accepted an altered check.
The opinions expressed here should not be construed to be those of my employer:

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#2262314 - 11/09/21 10:10 PM Re: Maker Negligence for Altered Check? mnbanker09
John Burnett Offline
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John Burnett
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Posts: 39,684
Cape Cod
The paying bank's customer didn't facilitate the alteration. They have a valid claim against the bank, which I trust they backed up with an affidavit. The paying bank has a claim against the depositary bank, which should refund the money. The fact that the check issuer didn't stop payment on the first check is unfortunate, but it doesn't negate the alteration claim.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8

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