Answer:
Answer by Jim Bedsole:
I don't know about the stop payment issue, but I do know that the UCC dictates that when there is a discrepancy between the numerical amount and the written amount, the written amount prevails. So if someone accepts the check for $10,000, you'll have recourse to only pay $1,000.
Answer:
Answer by John Burnett:
The reference is to Section 3-114 of the UCC, which reads, "If an instrument containts contradictory terms, typewritten terms prevail over printed terms, handwritten terms prevail over both, and words prevail over numbers." (1990 version).
The problem here is that this language doesn't really answer your question. The "check protection" embossing on most cashier's checks is done in numeric format. So you end up with both amounts on the check being numeric.
This one could make for an interesting court case! In fact, it has, in at least two cases reported in Brady on Bank Checks. In St. Paul Fire & Marine Ins. Co. v. State Bank of Salem, 412 NE2d 103, 30 UCC Rep. 557 (Ind. Ct. App. 1980), a check was mistakenly drawn for $100,478.23 by means of a check imprinter, whereas the amount in figures space was typed in as $478.23, the intended amount. The figures amount was later changed to agree with the imprinted amount by means of a typed addition that was crudely done. The larger amount was deemed controlling.
In U. S. Fidelity & Guar. Co. v. First Nat'l Bank of SC, 244 SC 436, 137 SE2d 582 (1964) a pre-UCC case, involving a series of embezzlements by a dishonest employee of the drawer. In some cases, the employee raised the numeric handwritten amount after getting the drawer's signature, and embossed the higher amount with the check writing machine. The court accepted the amount entered by the check writing machine, rather than the lower amount actually authorized by the signer of the check (pre alteration).
In each of these cases, the amount "in numbers" was raised by alteration after issuance. The facts don't exactly fit your scenario, but there's no clear argument in the UCC that the lower amount on your check is the amount you'll have to pay!
As for your question about stopping payment, if this is a cashier's check you're describing, you have no stop payment rights. You may be able to refuse payment to the payee, and you may be able to pay only the lower amount (depending on all the circumstances) to a holder in due course, but you really ought to consult counsel on this mess before you do anything.
First published on BankersOnline.com 6/30/03
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