Opinion ID: 3013502
Heading Depth: 2
Heading Rank: 3

Heading: FNCB’s Efforts To Return The Disputed

Text: Check On March 13, 2001, FNCB determined it would not pay the Disputed Check because of the absence of sufficient funds in the account on which the check was drawn. That same day, FNCB sought to return the Disputed Check to NBT through the Reserve Bank. The parties agree that the Disputed Check was physically delivered to the Reserve Bank prior to 11:59 p.m. on March 13. In addition to sending the Disputed Check back to the Reserve Bank on March 13, 1999) (hereinafter “Clark & Clark”) (outlining the provisional credit process). Based upon this assumption, the depositary bank provisionally places the value of the check into the payee’s account and forwards the check to the clearinghouse or transferor bank for collection. The clearinghouse provisionally shifts the value of the check from the clearinghouse account of the payor bank to the clearinghouse account of the depositary bank. Unless the payor bank revokes the provisional credit in accordance with § 4301 of the Pennsylvania UCC, the payor bank is deemed to have finally paid the check and is accountable to the depositary bank for the full amount of the check. See 13 Pa. Cons. Stat. Ann. §§ 4215, 4302; see also Colorado Nat’l Bank v. First Nat’l Bank & Trust Co., 459 F. Supp. 1366, 136869 (W.D. Mich. 1978) (discussing provisional credit process); Channel Equip. Co. v. Cmty. State Bank, 996 S.W.2d 374, 37778 (Tex. Ct. App. 1999) (same). 7 FNCB also sent a notice of dishonor to NBT via the FedLine,4 in which FNCB indicated that it did not intend to pay the Disputed Check. NBT received this notice prior to the close of business on March 13. In addition, on the morning of March 14, 2001, FNCB executives telephoned NBT officials and telefaxed a letter to NBT, advising NBT that FNCB had decided to dishonor the Disputed Check.