First State Bank of McKinney v. American Bank of Sherman, N.A.

McCLUNG, Justice.

First State Bank of McKinney, Texas (First State) sued American Bank of Sherman, N.A. (American) alleging late return of two checks in breach of American’s statutory duty under section 4.302 1 of the Texas Business and Commerce Code (Tex.U.C. C.). The trial court held that American timely returned the checks. We disagree. Consequently, we reverse and render judgment for First State.

On March 29,1982, Donald K. McKinney, a customer of both banks in this litigation, gave First State two checks, one to pay off a debt and the other to buy a certificate of deposit (CD). In the same…