Okla. Stat. tit. 12A § 3-312

Current through Laws 2024, c. 453.

Section 3-312 - Lost, Destroyed, or Stolen Cashier's Check, Teller's Check, or Certified Check

(a) In this section:

(1) "Check" means a cashier's check, teller's check, or certified check;

(2) "Claimant" means a person who claims the right to receive the amount of a cashier's check, teller's check, or certified check that was lost, destroyed, or stolen;

(3) "Declaration of loss" means a statement, made in a record under penalty of perjury, to the effect that (i) the declarer lost possession of a check, (ii) 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 or teller's check, (iii) the loss of possession was not the result of a transfer by the declarer or a lawful seizure, and (iv) 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; and

(4) "Obligated bank" means the issuer of a cashier's check or a teller's check or the acceptor of a certified check.

(b) A claimant may assert a claim to the amount of a check by a communication to the obligated bank describing the check with reasonable certainty and requesting payment of the amount of the check, if (i) the claimant is the drawer or payee of a certified check or the remitter or payee of a cashier's check or teller's check, (ii) the communication contains or is accompanied by a declaration of loss of the claimant with respect to the check, (iii) the communication is received at a time and in a manner affording the bank reasonable time to act on it before the check is paid, and (iv) the claimant provides reasonable identification if requested by the obligated bank. Delivery of a declaration of loss is a warranty of the truth of the statements made in the declaration. If a claim is asserted in compliance with this subsection, the following rules apply:

(1) The claim becomes enforceable at the later of (i) the time the claim is asserted, or (ii) the ninetieth (90th) day following the date of the check, in the case of a cashier's check or teller's check, or the ninetieth (90th) day following the date of the acceptance, in the case of a certified check;

(2) Until the claim becomes enforceable, it has no legal effect and the obligated bank may pay the check or, in the case of a teller's check, may permit the drawee to pay the check. Payment to a person entitled to enforce the check discharges all liability of the obligated bank with respect to the check;

(3) If the claim becomes enforceable before the check is presented for payment, the obligated bank is not obliged to pay the check; and

(4) When the claim becomes enforceable, the obligated bank becomes obliged to pay the amount of the check to the claimant if payment of the check has not been made to a person entitled to enforce the check. Subject to paragraph (1) of subsection (a) of Section 4-302 of this title, payment to the claimant discharges all liability of the obligated bank with respect to the check.

(c) If the obligated bank pays the amount of a check to a claimant under paragraph (4) of subsection (b) of this section and the check is presented for payment by a person having rights of a holder in due course, the claimant is obliged to (i) refund the payment to the obligated bank if the check is paid, or (ii) pay the amount of the check to the person having rights of a holder in due course if the check is dishonored.

(d) If a claimant has the right to assert a claim under subsection (b) of this section and is also a person entitled to enforce a cashier's check, teller's check, or certified check which is lost, destroyed, or stolen, the claimant may assert rights with respect to the check either under this section or Section 3-309 of this title.

Okla. Stat. tit. 12A, § 3-312

Added by Laws 1991, SB 25, c. 117, § 63, eff. 1/1/1992; Amended by Laws 2008, SB 1708, c. 382, §8, eff. 11/1/2008 (Laws 2008, SB 1708, c. 382 held unconstitutional and void by Weddington v. Henry, 2008 OK 102, 202 P.3d 143, and repealed by Laws 2009, SB 991, c. 208, §22, eff. 11/1/2009); Amended by Laws 2009, SB 991, c. 208, §8, eff. 11/1/2009.

Oklahoma Code Comment

1. Generally, the rights of a holder to enforce a lost, stolen or destroyed instrument are set forth in Section 3-309. That Section requires the person entitled to enforce a lost instrument to provide "adequate protection" to the issuer before enforcement is permitted. In most jurisdictions, an issuer is entitled to receive an indemnity or bond from the person seeking enforcement.

Section 3-312 sets up an alternative means for enforcing a lost, stolen or destroyed cashier's teller's or certified check. It also creates, for the first time, a legal right in the remitter (purchaser) of a cashier's or teller's check to recover the funds if the instrument is lost, stolen or destroyed. Instead of posting some type of security, which can involve significant expense, the claimant may provide the bank with a written Declaration of Loss and wait for the passage of 90 days from the date of issuance. At the end of the waiting period, the obligated bank is required to pay the claimant if the check has not yet been presented for payment, and thereafter, the bank is not obligated to pay the check.

2. A party entitled to enforce a cashier's, teller's or certified check may utilize Section 3-309 instead of Section 3-312 . For example, the payee on a cashier's check may elect to provide adequate protection, rather than wait 90 days to recover the funds from a lost check.

3 As written, Section 3-312 discharges the obligated bank that makes payment to the claimant. A strict reading of Sections 3-302 and 3-305 might suggest that the holder's ability to enforce the instrument against the obligated bank will depend on when the instrument was negotiated. If it is negotiated after the end of the 90-day period, then the holder win have notice that the item is overdue, and be denied status as a holder in due course even if the other requirements of sub section 3-302(a)(2) are met. On the other hand, a holder who takes the check within the 90-day period and otherwise meets the requirements of sub section 3-302(a)(2) would be entitled to enforce it as a holder in due course, even after the 90-day period lapses, because payment to the claimant is not a defense under sub section 3-305(a)(1) and the item was not overdue when taken. However, sub section 3-312(c) should be read to limit a holder in due course to recovery against the claimant, and not the obligated bank if the obligated bank does not voluntarily elect to pay the instrument.

Essentially, the effective date of the check puts any holder on notice of the existence of a possible defense if the check is not presented for payment within 90 days from issuance. If this were not the case, the obligated bank would be exposed to double liability. In addition, because many indorsements are not dated, it would seldom be clear to the obligated bank, on the face of the instrument, whether it was negotiated to the current holder within the 90-day period. Thus, if sub section 3-312(c) is not read as providing an absolute defense, the obligated bank would be in the unenviable position of either paying the instrument to one who might be subject to a valid defense, or risking a claim for wrongful dishonor. The Official Comment to Section 3-312 confirms this reading, providing that "any person entitled to enforce this check including even a holder in due course, loses the right to enforce the check after a claim becomes enforceable."

4. The existence of a defense based on the age of the instrument raises operational issues for financial institutions that take the instrument for collection. Financial institutions may wish to place a hold on the proceeds of any overdue cashier's, teller's or certified check for 7 days utilizing the "reasonable uncertainty" provisions of Regulation CC, 12C.F.R. § 229.13(e).