Patrick Combs - Stories

Bank Error In My Favor: Collect $95,000 / ORIGINAL version.
© 1995 Patrick Combs

"Henry Bailey"

I arrived back in San Francisco and didn't hear back from First Interstate bank. No phone calls and no letters. Each day I expected to receive an official letter from the bank.

My curiosity drove me back to the Law Library. This time I was determined to read and understand the big book, Brady on Bank Checks - The Law of Bank Checks by Henry Bailey and Richard Hagedorn. And this time, determination (or a coffee), made the difference because I knew what I was reading. I was reading a lot of laws, in black and white, that gave me a legal right to the money.

I photocopied like a madman. I copied the Midnight Law , Finality of Payment and court case rulings that held it illegal for a bank to cancel a cashier's check . Then just before my brain went to mush and my photocopying change ran out, I read a footnote by the author that was in regards to the law that makes the words "non-negotiable" meaningless on a check. The author wrote,

"The only problem with this approach is the use of blank sample check forms that bear language such as "void," or "non-negotiable" or "sample form" that is clearly intended to show that the particular sample or form is not intended as a valid check. Would potential liability exist if such a sample form is filled in without authority and passed to one who could take as a holder in due course? The 1990 provision might well be drafted to avoid such a possible problem."

The author of Brady on Bank Checks saw this occurrence coming!! I had to tell him!

I noted from the back of the book that both authors were once professors at Willamette University -- I called as soon as I got home. I didn't even have to call information for the number because I had recently delivered a lecture, based on my book, there. Only one of the authors, Richard Hagedorn, was still working there, the other had retired. I asked if I could speak with Mr. Hagedorn and was informed that he was on vacation for the week. My heart sunk like a stone. Then I got an idea. I said, "Is Henry enjoying his retirement?" "Yes he is," came the reply. "As a matter of fact he still keeps in touch with us on occasion." (I was in there!) I said, "I bet he retired to the beautiful state of Oregon. I'm from Oregon myself." And the golden ticket came back, "No, actually he retired to a small town in Providence, Rhode Island." In no time at all directory assistance was giving me a phone number for one Henry Bailey in Providence, Rhode Island.

The phone rang 25 times before an elderly woman answered. I asked for Henry Bailey. She said just a minute and then the phone connection was lost. I tried calling back right away, but no answer no matter how many times I let it ring.

So I called again the next day and after twenty or so rings, this time an elderly man answered -- and he was gruff! "Who is this?!" "What are you calling about?!" "Who are you?!!" "Are you a lawyer?!" "Are you a banker?!" "Are you with the press?!" "Then why are you calling me?!!"

Finally I was able to express that I was a 29 year old calling because I was in the middle of the problem he had foreseen. I mentioned the UCC code about the words 'non-negotiable' and he turned on like a light, "Yes, I wrote about that problem in Brady and I published an article about it in Banking Law Journal. It was never like that in the 1962 code!"

Our conversation progressed like this:

ME: "I deposited an advertising check and ..."
HIM: "Well, it sounds like you weren't being very honorable."
ME: "I deposited it because I thought my bank would never accept it, but they did."
HIM: "Well that doesn't necessarily make you a holder in due course.
Did it have a name on it?"
ME: "Yes Sir, it had my name on it."
HIM: "Your name! Hmm.. Well did it have a signature on it?"
ME: "Yes Sir, an authorized signature and an account number."
HIM: "It did! .... Well these dummies deserve it! Was this check an advertisement?"
ME: "YES! That's exactly what it was!!"
HIM: "Oh, this sounds good. How much was it for?"
ME: "Ninety five thousand."
HIM: "Oh, this sounds really good! Well, when did the company call you?"
ME: "The company didn't call me, my bank did. They said the check was returned as a 'non-cash item.'
HIM: "When did you deposit the check and when did your bank notify you?"
ME: "I deposited it on May 19 and my bank returned it on June 21."
HIM: "Well if your bank delayed that long, you need to get a lawyer, because you have a legal claim to that money. Your bank has to meet a Midnight Deadline! You need to get a lawyer because that money is legally yours." (And he began citing many court cases and reiterating that I need to get a lawyer.)

At the end of our conversation he said he was glad that I had called to tell him. It was an honor to speak with Henry Bailey. I greatly admire him for having seen this occurrence coming and I appreciate his having co-written a law book so good that even I could understand it, although when I said that to him he said, "I didn't write it to be used by the layman, I wrote it to be used by bankers and lawyers." (Not only are they reading it Mr. Bailey, but so are Security Officers).

Part VII: The Waiting"