I’ve Actually Been There

Today in commercial paper we discussed Valley Bank of Ronan v. Hughes.    147 P.3d 185.  Hughes got scammed.  He was sent four checks.  If he wired a certain sum overseas, he could keep the difference as a commission.  Two of the checks were cashiers checks.  One for $1,000,000 and the other for $500,000.  The other two checks were personal checks totalling $132,000.  He was to wire $800,000 to Amman, Jordan.  His profit would be $832,000.

In Hughes’ defense, when he went to the bank in Ronan, Montana, he asked the manager to verify that the cashiers checks were valid.  “Of course,” he was told, “it’s just like cash.”  The bank didn’t actually do anything to verify them.  So Hughes wired away the money.  Long story short, the checks were no good, the wired money disappeared, and Hughes was left holding the bag.  The bank charged back his account.

While it’s a shame Hughes was taken advantage of, what interested me was I realized I’ve been to Ronan, Montana.  I drove through it on my way to Glacier National Park in August, 2009.  I don’t remember it.  I hadn’t given it any thought in over three years.  But I can say I’ve been there.

Going to Lose the Argument

This week in commercial paper I learned that the UCC requires a bank to make cash deposits available for withdrawal the next banking day.  That seemed odd to me.  Unlike for a check, which could be written against insufficient funds or have some other problem, the bank knows it has the money when cash is deposited.  The customer literally hands it over.  I imagined some strange conversations:

Customer: Oh, I forgot, I need $50 back from the $100 I just deposited.

Bank: I’m sorry, that money isn’t available.

Customer: What do you mean?  It’s sitting right there on the counter.

Bank: It’s not available until tomorrow.

Customer: That doesn’t make sense.  It should be available right now.  I can see it.

Bank: It’s not available yet.

Customer pointing: It’s right there.

Bank: That may be, sir, but it’s not available.