978-1285770178 Case Printout Case CPC-13-09

subject Type Homework Help
subject Pages 5
subject Words 1898
subject Authors Roger LeRoy Miller

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366 Ill.App.3d 1148, 853 N.E.2d 1244
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© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
a particular account, the following rules apply: * * * A depository bank that purchases the instrument or takes it for
collection when so indorsed converts the instrument unless the amount paid by the bank with respect to the
instrument is received by the indorser or applied consistently with the indorsement.” (West 2000).
The trial court granted summary judgment, finding: (1) that Pan American Bank was a “depository bank” subject
to of the Code; and (2) that Pan American Bank, as a depository bank was strictly liable to the payee of the
checks. Pan American Bank now appeals.
This is an appeal from an order granting summary judgment. Therefore, the standard of review is de novo,
meaning no deference is given to the judgment below. . Under de novo review, the court considers the facts and
law related to the case to determine whether the trial court was correct in its conclusion that there was no genuine
issue of material fact and the movant was entitled to judgment as a matter of law. . Summary judgment is a
even though it is also the payor bank, unless the item is presented for immediate payment over the counter.”
(West 2000).
Thus, if we follow the Illinois Code definition of “depository bank” Pan American Bank clearly is a “depository
bank.” It was the first bank to take the check when the checks were deposited in the ATM. Section 3-206
imposes conversion liability on the depository bank for failure to honor a restrictive endorsement. Pan American
Under this definition, in the instant matter, Marquette Bank, not Pan American Bank, was the depository bank.
Leparski used Pan American's ATM machine to deposit the checks into his account at Marquette Bank. Thus,
under the federal regulation, Marquette Bank, not Pan American would have been solely liable for conversion as a
“depository bank.”
We are faced with two conflicting definitions of “depository bank” and the definition which applies will determine
contained in the cited federal regulations, was intended to be limited in scope and was not intended to preempt
the UCC law of negotiable instruments. We therefore find that the trial court was correct as a matter of law in
finding that Pan-American Bank was a depository bank.
Pan-American next maintains that the trial court erred in determining that it is strictly liable for failure to honor the
restrictive endorsement “Interior Crafts-For Deposit Only.” We disagree.
A depository bank that purchases the instrument or takes it for collection when so indorsed converts the
instrument unless the amount paid by the bank with respect to the instrument is received by the indorser or
applied consistently with the indorsement.” (West 2000).
Under section 3-206 a depository bank is liable in conversion unless the payee under a restrictive endorsement
receives the amount of the check or unless the amount of the check is deposited in the endorser's account. It is
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© 2006 Thomson/West. No Claim to Orig. U.S. Govt. Works.
a particular account, the following rules apply: * * * A depository bank that purchases the instrument or takes it for
collection when so indorsed converts the instrument unless the amount paid by the bank with respect to the
instrument is received by the indorser or applied consistently with the indorsement.” (West 2000).
The trial court granted summary judgment, finding: (1) that Pan American Bank was a “depository bank” subject
to of the Code; and (2) that Pan American Bank, as a depository bank was strictly liable to the payee of the
checks. Pan American Bank now appeals.
This is an appeal from an order granting summary judgment. Therefore, the standard of review is de novo,
meaning no deference is given to the judgment below. . Under de novo review, the court considers the facts and
law related to the case to determine whether the trial court was correct in its conclusion that there was no genuine
issue of material fact and the movant was entitled to judgment as a matter of law. . Summary judgment is a
even though it is also the payor bank, unless the item is presented for immediate payment over the counter.”
(West 2000).
Thus, if we follow the Illinois Code definition of “depository bank” Pan American Bank clearly is a “depository
bank.” It was the first bank to take the check when the checks were deposited in the ATM. Section 3-206
imposes conversion liability on the depository bank for failure to honor a restrictive endorsement. Pan American
Under this definition, in the instant matter, Marquette Bank, not Pan American Bank, was the depository bank.
Leparski used Pan American's ATM machine to deposit the checks into his account at Marquette Bank. Thus,
under the federal regulation, Marquette Bank, not Pan American would have been solely liable for conversion as a
“depository bank.”
We are faced with two conflicting definitions of “depository bank” and the definition which applies will determine
contained in the cited federal regulations, was intended to be limited in scope and was not intended to preempt
the UCC law of negotiable instruments. We therefore find that the trial court was correct as a matter of law in
finding that Pan-American Bank was a depository bank.
Pan-American next maintains that the trial court erred in determining that it is strictly liable for failure to honor the
restrictive endorsement “Interior Crafts-For Deposit Only.” We disagree.
A depository bank that purchases the instrument or takes it for collection when so indorsed converts the
instrument unless the amount paid by the bank with respect to the instrument is received by the indorser or
applied consistently with the indorsement.” (West 2000).
Under section 3-206 a depository bank is liable in conversion unless the payee under a restrictive endorsement
receives the amount of the check or unless the amount of the check is deposited in the endorser's account. It is

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