HSBC Bank USA v. F & M Bank Northern Virginia
United States Court of Appeals for the Fourth Circuit
246 F.3d 335 (2001)
- Written by Sean Carroll, JD
Facts
Donald Lynch bought a check from Allied Irish Bank (AIB). The check was made out to Advance Marketing and Investment Inc. (AMI) for $250.00. The “$250.00” was written in the numerical box on the check, leaving slightly less than one-half inch of space in that box; “Two Hundred Fifty” was written on the written section of the check, leaving one inch of space on that line. HSBC Bank USA (HSBC) (plaintiff) was the successor in interest to the check’s drawee. AMI deposited the check in its bank account at F & M Bank Northern Virginia (F & M) (defendant), but before it did so, the check was altered. The $250.00 was changed to $250,000.00 in the numerical box on the check, and “Thoud” was added to the written center line. HSBC honored the check and paid F & M $250,000.00 for placement in AMI’s account. Subsequently, HSBC learned that the check had been altered. HSBC credited AIB with the $249,750.00 difference and sued F & M for breach of presentment warranty, seeking to recover the funds. The district court found that AIB exercised ordinary care in drafting the check and ruled in HSBC’s favor. F & M appealed.
Rule of Law
Issue
Holding and Reasoning (Hamilton, J.)
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