Essex Construction Corp. v. Industrial Bank of Washington, Inc.
United States District Court for the District of Maryland
913 F. Supp. 416 (1995)
Essex (plaintiff) deposited a $120,710.70 check drawn on Signet Bank into its account with Industrial Bank (defendant); Industrial provisionally credited the full amount but told Essex the funds wouldn't be available until April 6. Signet notified Industrial the check was returned on April 6, and Industrial mailed written notice to Essex on April 7 revoking the provisional credit - the same day Essex, believing the funds were available, wrote two checks against them. Essex didn't actually receive Industrial's notice until April 11, and sued, alleging the notice was untimely.
Whether, under UCC § 4-214, a collecting bank may revoke a provisional credit to a customer's account by returning the check or sending notification by midnight of the next banking day after receiving notice that the payor bank returned the check.