In the instant case, the drawee
(RBC), in requesting restitution from the collecting bank (BNS), was in fact denying to both the collecting bank and the payee the genuineness of the drawer's signatures.
b) No party of a draft or check initially has primary liability since the drawee
has only been ordered by the drawer to make payment.
Original checks will likely be destroyed by the drawee
bank after the electronic image is sent to the depository bank.
The gift, therefore, remains incomplete until the drawee
bank pays the check.
But, by common law, payment in full or at par was required only if the check was presented for payment at the bank against which it was drawn (the drawee
Apparently, the term "debtor" as used in this provision includes a drawee
, as well as a prior holder against whom rights of recourse are sought.
The court ruled that although it is a general rule that a check is not absolute payment until it is paid by the drawee
bank, a contract vendee of property cannot use this general rule to withdraw from a contract before her downpayment check is deposited and paid by the bank.
Some companies have the lockbox bank electronically capture the MICR line information (the information in the bottom line of the check containing the drawee
bank, account number of the payer, and the amount).
Thus, even though under Maryland law the gifts were not completed until the drawee
bank accepted the checks, the gifts were considered completed in 1985 because of the relation-back doctrine and Albert's estate was not increased by the $20,000.
Dissenting justices argued that "a transfer by check occurs on the date the check is delivered to the transferee, provided that the drawee
bank honors the check within 10 days.
The Court held that a depository bank's mailing of a cashed check, drawn on the dummy corporation, to the drawee
bank was not sufficiently related to the fraudulent scheme.
The system identifies the bank of first deposit for each inward clearing item and presents the matched information, along with the image, to the drawee
bank operator for on-line return confirmation.