UNIFORM COMMERCIAL CODE
Act 174 of 1962
440.4401 Payor bank; charge against customer's account.
Sec. 4401.
(1) A bank may charge against the account of a customer an item that is properly payable from that account even though the charge creates an overdraft. An item is properly payable if it is authorized by the customer and is in accordance with any agreement between the customer and bank.
(2) A customer is not liable for the amount of an overdraft if the customer neither signed the item nor benefited from the proceeds of the item.
(3) A bank may charge against the account of a customer a check that is otherwise properly payable from the account, even though payment was made before the date of the check, unless the customer has given notice to the bank of the postdating describing the check with reasonable certainty. The notice is effective for the period stated in section 4403(2) for stop-payment orders, and must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it before the bank takes any action with respect to the check described in section 4303. If a bank charges against the account of a customer a check before the date stated in the notice of postdating, the bank is liable for damages for the loss resulting from its act. The loss may include damages for dishonor of subsequent items under section 4402.
(4) A bank that in good faith makes payment to a holder may charge the indicated account of its customer according to either of the following:
(a) The original terms of the altered item.
(b) The terms of the completed item, even though the bank knows the item has been completed unless the bank has notice that the completion was improper.
History: 1962, Act 174, Eff. Jan. 1, 1964 ;-- Am. 1993, Act 130, Eff. Sept. 30, 1993
Notes of Decisions
Lee Morof v. United Missouri Bank, Warsaw, 391 F. App'x 534 (6th Cir. 2010).
· cites it 2× “ANALYSIS Specifically, this appeal involves the Mo-rofs’ claim against UMB pursuant to § 4-401 of Michigan’s Uniform Commercial Code, Mich. Comp. Laws § 440.4401 , for UMB’s charges against the Morofs’ accounts based on several checks that the Morofs allege were not “properly…”
Hedglin v. Cmty. Bank (In re A & C Chevrolet-Olds, Inc.), 3 B.R. 396 (E.D. Mich. 1980).
“Since the GMAC check was paid by the bank on February 8, 1978, the settlement becomes final on that date. The Bank became unquali-fiedly liable for the check on that date and the Bankrupt became unqualifiedly liable on the overdraft.”
People v. Miciek, 308 N.W.2d 603 (Mich. Ct. App. 1981).
“According to the official U.C.C. Comment, payment of an overdraft "carries an implied promise to reimburse the drawee”.”
Web Equity Holdings LLC v. Level One Bancorp Inc (Mich. Ct. App. 2019).
· cites it 4× “Plaintiffs filed suit against Level One for wrongfully honoring the checks under MCL 440.4401. In turn, Level One filed a third-party complaint against the depositary banks where the checks were cashed or deposited, which were Huntington, Fifth Third Bank, N.”
Carson Fischer Plc v. Michigan Nat'l Bank (Mich. 2005).
“3407 and (2) if the checks did not contain an “alteration,” whether they were therefore properly payable under MCL 440.4401(1). I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the foregoing is a true and complete copy of the order entered at the direction…”
Bza 301 Holdings LLC v. Louis Stevens (Mich. Ct. App. 2015).
“Defendant contends that the trial court erred in ruling for plaintiff because plaintiff was not entitled to enforce the promissory note on several grounds, primarily because it was not a holder in due course under MCL 440.4401 et seq. This Court reviews de novo a lower court’s…”
Am. Express Travel Related Servs. Co. v. Bank One-Dearborn, N.A., 227 F.R.D. 490 (E.D. Mich. 2005).
“§ 440.4401. Defendant Bank One also brings a claim against Third Party Defendant, Federal Reserve Bank of Chicago (the “Chicago Fed”), because of Third Party Defendant’s action in presenting the check to Defendant Bank One for collection.”
Newman v. Mfrs. Nat'l Bank, 152 N.W.2d 564 (Mich. Ct. App. 1967).
· cites it 2× “PA 1962, No 174, § 4401 (CL 1948, § 440.4401 [Stat Ann 1964 Bev § 19.4401]) provides as follows: “(1) As against its customer, a bank may charge against his account any item which is otherwise properly payable from that account even though the charge creates an overdraft.”
— Mich. Comp. Laws § 440.4401(1) — 2 cases
Web Equity Holdings LLC v. Level One Bancorp Inc (Mich. Ct. App. 2019).
“Plaintiffs filed suit against Level One for wrongfully honoring the checks under MCL 440.4401. In turn, Level One filed a third-party complaint against the depositary banks where the checks were cashed or deposited, which were Huntington, Fifth Third Bank, N.”
Carson Fischer Plc v. Michigan Nat'l Bank (Mich. 2005).
“3407 and (2) if the checks did not contain an “alteration,” whether they were therefore properly payable under MCL 440.4401(1). I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the foregoing is a true and complete copy of the order entered at the direction…”
— Mich. Comp. Laws § 440.4401(3) — 1 case
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