Check Handling, Cashier’s Check: Lost Cashier's Check
Printer-friendly VersionQuestion:
Our bank issued a cashier's check to a customer. The customer mailed the check to a bank for deposit, but it apparently got lost in the mail. What is the law on a lost cashier's check?
Answer:
Section 3.312 of the UCC, enacted in 1995, applies to cases in which a cashier's check, teller's check, or certified check is lost, destroyed, or stolen. Under the UCC §3.312, a claim may be asserted only by the drawer or payee of a certified check or the remitter or payee of a cashier's check or teller's check.
The claim may be made by communication to the obligated bank describing the check with reasonable certainty and requesting payment of the amount of the check. ("Obligated bank" means the issuer of a cashier's check or teller's check or the acceptor of a certified check.) The communication must be received at a time and in a manner affording the bank a reasonable time to act on it before the check is paid. The claimant must provide reasonable identification if requested by the obligated bank. Additional requirements (such as requiring the posting of a bond or other form of security on the claimant to assert a claim) may not be imposed on the claimant by the obligated bank.
The communication must contain or be accompanied by a "declaration of loss" of the claimant with respect to the check. A "declaration of loss" is a written statement (usually an affidavit) made under penalty of perjury to the effect that:
1) the declarer lost possession of the check;
2) the declarer is the drawer or payee of the check, in the case of a certified check, or the remitter or payee of the check, in the case of a cashier's check or teller's check;
3) the loss of possession was not the result of a transfer by the declarer or a lawful seizure; and
4) the declarer cannot reasonably obtain possession of the check because the check was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.
Delivery of the declaration of loss is a warranty of the truth of the statements made in the declaration. If the claimant falsely submits a declaration of loss, a holder of the check, unable to obtain payment because of the declaration of loss, would have a cause of action against the claimant for breach of this warranty.
A claim asserted as set forth above, has no legal effect until it is enforceable at the later of:
(1) the time the claim is asserted; or
(2) the 90th day following the date of the check in the case of a cashier's check or teller's check, or the 90th day following the date of acceptance, in the case of a certified check.
Because a depositary bank cannot be sure whether a claim under Section 3.312 has been asserted on a teller's check, cashier's check, or certified check, it should not take one of these checks if it cannot present the check for payment before the 90th day following the date of the cashier's check or teller's check or the 90th day following the date of acceptance, in the case of a certified check. If a depositary bank takes such a check after the applicable 90-day period and a valid claim has been asserted, payment will be excused when it presents the check to the obligated bank.
Because a claim has no legal effect until it becomes enforceable, until the claim is enforceable the obligated bank may pay the check or, in the case of a teller's check, may permit the drawee to pay the check. The obligated bank is discharged of all liability with respect to the check once it has paid a person entitled to enforce the check.
When the claim becomes enforceable and payment of the check has not been made to a person entitled to enforce the check, the obligated bank is obliged to pay the amount of the check to the claimant. If anyone presents the check after the claim becomes enforceable, the obligated bank may dishonor the check.
The claim may be made by communication to the obligated bank describing the check with reasonable certainty and requesting payment of the amount of the check. ("Obligated bank" means the issuer of a cashier's check or teller's check or the acceptor of a certified check.) The communication must be received at a time and in a manner affording the bank a reasonable time to act on it before the check is paid. The claimant must provide reasonable identification if requested by the obligated bank. Additional requirements (such as requiring the posting of a bond or other form of security on the claimant to assert a claim) may not be imposed on the claimant by the obligated bank.
The communication must contain or be accompanied by a "declaration of loss" of the claimant with respect to the check. A "declaration of loss" is a written statement (usually an affidavit) made under penalty of perjury to the effect that:
1) the declarer lost possession of the check;
2) the declarer is the drawer or payee of the check, in the case of a certified check, or the remitter or payee of the check, in the case of a cashier's check or teller's check;
3) the loss of possession was not the result of a transfer by the declarer or a lawful seizure; and
4) the declarer cannot reasonably obtain possession of the check because the check was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.
Delivery of the declaration of loss is a warranty of the truth of the statements made in the declaration. If the claimant falsely submits a declaration of loss, a holder of the check, unable to obtain payment because of the declaration of loss, would have a cause of action against the claimant for breach of this warranty.
A claim asserted as set forth above, has no legal effect until it is enforceable at the later of:
(1) the time the claim is asserted; or
(2) the 90th day following the date of the check in the case of a cashier's check or teller's check, or the 90th day following the date of acceptance, in the case of a certified check.
Because a depositary bank cannot be sure whether a claim under Section 3.312 has been asserted on a teller's check, cashier's check, or certified check, it should not take one of these checks if it cannot present the check for payment before the 90th day following the date of the cashier's check or teller's check or the 90th day following the date of acceptance, in the case of a certified check. If a depositary bank takes such a check after the applicable 90-day period and a valid claim has been asserted, payment will be excused when it presents the check to the obligated bank.
Because a claim has no legal effect until it becomes enforceable, until the claim is enforceable the obligated bank may pay the check or, in the case of a teller's check, may permit the drawee to pay the check. The obligated bank is discharged of all liability with respect to the check once it has paid a person entitled to enforce the check.
When the claim becomes enforceable and payment of the check has not been made to a person entitled to enforce the check, the obligated bank is obliged to pay the amount of the check to the claimant. If anyone presents the check after the claim becomes enforceable, the obligated bank may dishonor the check.