Death of one who signed an uncashed check.

[micky]

I have a clear recollection, fwiw, of being taught that when someone
writes a check but dies before it is cashed, the check becomes
non-negotiable.

Now someone tells me the opposite. He quotes the UCC, esp. section b,
which seems to allow 10 days after death, even with knowledge of death
on the part of the bank.

Is this an exception to a general rule? Even though it's in the
UCC, its wording doesn't seem to be limited to commerce or goods.

Is it a change from what the law was 40 years ago, when I was told
what I think I was told?

Is there some other way I can avoid being wrong? :-)

What about the payee? Is he barred from presenting the check for
payment as soon as he knows of the death of the payer? Or does he get
10 days too?

Thanks

UCC 4-405

§ 4-405. DEATH OR INCOMPETENCE OF CUSTOMER.

(a) A payor or collecting bank's authority to accept, pay, or collect
an item or to account for proceeds of its collection, if otherwise
effective, is not rendered ineffective by incompetence of a customer
of either bank existing at the time the item is issued or its
collection is undertaken if the bank does not know of an adjudication
of incompetence. Neither death nor incompetence of a customer revokes
the authority to accept, pay, collect, or account until the bank knows
of the fact of death or of an adjudication of incompetence and has
reasonable opportunity to act on it.

(b) Even with knowledge, a bank may for 10 days after the date of
death pay or certify checks drawn on or before that date unless
ordered to stop payment by a person claiming an interest in the
account.
--- end --


Also, section b foresees a check being certified after the
payer/maker/drawer/author (which?) is dead. I thought only the payer
could certify a check. I guess I just assumed that. Who else can
certify a check? Just guessing, maybe an agent of the payee who
does't have the authority to cash or the means to deposit it? Can he
firm up his principal's right to the money by certifying a check the
payer did not certify?

[Stuart A. Bronstein]

micky <mis...@bigfoot.com> wrote:

> I have a clear recollection, fwiw, of being taught that when
> someone writes a check but dies before it is cashed, the check
> becomes non-negotiable.

I do not remember ever hearing that. In fact the rule has always
been that contracts have always been enforceable against the
estates of deceased contracting parties. I don't see any reason
why there should be any difference for a check, which is generally
given as part of a contractual transaction.

> Now someone tells me the opposite. He quotes the UCC, esp.
> section b, which seems to allow 10 days after death, even with
> knowledge of death on the part of the bank.

You are talking about section 4-405 and subparagraph b to that
statute. There are a lot of subparagraph b's in the UCC, so it is
confusing if you don't specify which.

> Is this an exception to a general rule? Even though it's in
> the UCC, its wording doesn't seem to be limited to commerce or
> goods.

I think you are confusing death with filing bankruptcy. In the
latter case a check is not supposed to be cashed.

> Is it a change from what the law was 40 years ago, when I was
> told what I think I was told?

No.

> Is there some other way I can avoid being wrong? :-)

I doubt it.

> What about the payee? Is he barred from presenting the check
> for payment as soon as he knows of the death of the payer? Or
> does he get 10 days too?

It looks like he gets ten days.

--
Stu
http://DownToEarthLawyer.com

[micky]

On Wed, 16 Oct 2013 07:47:12 -0400, micky <mis...@bigfoot.com> wrote:

>(b) Even with knowledge, a bank may for 10 days after the date of
>death pay or certify checks drawn on or before that date unless
>ordered to stop payment by a person claiming an interest in the
>account.
>--- end --
>
>Also, section b foresees a check being certified after the
>payer/maker/drawer/author (which?) is dead. I thought only the payer
>could certify a check. I guess I just assumed that. Who else can
>certify a check? Just guessing, maybe an agent of the payee who
>does't have the authority to cash or the means to deposit it? Can he
>firm up his principal's right to the money by certifying a check the
>payer did not certify?

Wherever I say "certify a check" I mean "request that a check be
certified" I know the bank certifies the check. Sorry

[Mike Anderson]

On 10/16/2013 7:47 AM, micky wrote:
> Also, section b foresees a check being certified after the
> payer/maker/drawer/author (which?) is dead. I thought only the payer
> could certify a check. I guess I just assumed that. Who else can
> certify a check? Just guessing, maybe an agent of the payee who
> does't have the authority to cash or the means to deposit it? Can he
> firm up his principal's right to the money by certifying a check the
> payer did not certify?

I always thought that a BANK certifies the check (person writes check
drawn on an account. The bank then certifies the check saying that there
are funds available at the time and withdraws or locks said funds so
they will still be available at the time that the check is presented for
payment.) But I'm not a lawyer so what do I know?

[Stuart Bronstein]

Mike Anderson <prabb...@gmail.com.com> wrote:
> micky wrote:

>> Also, section b foresees a check being certified after the
>> payer/maker/drawer/author (which?) is dead. I thought only
>> the payer could certify a check. I guess I just assumed that.
>> Who else can certify a check?
>

> I always thought that a BANK certifies the check (person writes
> check drawn on an account. The bank then certifies the check
> saying that there are funds available at the time and withdraws
> or locks said funds so they will still be available at the time
> that the check is presented for payment.) But I'm not a lawyer
> so what do I know?

Generally the maker of the check asks the bank to certify it. Then
the bank (for a fee) segregates the funds (takes it out of the
account) and then certifies the check to guarantee the check will be
paid.

My understanding is that banks don't like to certify checks these
days, and it's hard to get them to do so. Instead they prefer to
give you a cashier's check - a check written by the bank on their own
account. It's not quite as good as a certified check, but it's
close.

--
Stu
http://DownToEarthLawyer.com

[Mike Anderson]

On 10/19/2013 6:04 PM, Stuart Bronstein wrote:
> Mike Anderson <prabb...@gmail.com.com> wrote:
>> micky wrote:
>
>>> Also, section b foresees a check being certified after the
>>> payer/maker/drawer/author (which?) is dead. I thought only
>>> the payer could certify a check. I guess I just assumed that.
>>> Who else can certify a check?
>>
>> I always thought that a BANK certifies the check (person writes
>> check drawn on an account. The bank then certifies the check
>> saying that there are funds available at the time and withdraws
>> or locks said funds so they will still be available at the time
>> that the check is presented for payment.) But I'm not a lawyer
>> so what do I know?
>
> Generally the maker of the check asks the bank to certify it. Then
> the bank (for a fee) segregates the funds (takes it out of the
> account) and then certifies the check to guarantee the check will be
> paid.

Yes, so I walk into a bank and hand them a check to be certified. For
some reason, they say "It'll take 24 hours. Please come back tomorrow to
pick it up." I leave it with them and walk out the door and drop dead
from a heart attack. They could still certify the check at any time in
the next 10 days.

Micky did say in a later post that he he was using the word 'certify'
wrong and that "Wherever I say "certify a check" I mean "request that a
check be certified"." In THAT usage, no, there couldn't be a request for
a check to be certified once the person who wrote the check was
deceased. But since the UCC was using the word 'certify' correctly, then
there was no paradox like Micky thought there was.