Troy Bank and Trust Company v. the Citizens Bank

Summary

The court reversed a summary judgment for Citizens Bank, holding that Troy Bank could pursue damages under Alabama's check-encoding warranty without using the Federal Reserve claim procedure. Troy Bank became liable for the check's full face amount when it paid the underencoded amount and did not dishonor the check by the midnight deadline, while the encoding warranty shifted the resulting loss caused by the error to Citizens Bank. The case was remanded for entry of summary judgment for Troy Bank in the amount supported by substantial evidence.