Brief Fact Summary. Lottie M. McGuire, (Petitioner), filed suit against Bank One, Louisiana, N.A., (Respondent), for damages because a substantial overdraft resulted when Respondent paid a check drawn by Petitioner on her own checking account. The trial court sustained Respondent’s exception of no cause of action and Petitioner appeals.
Synopsis of Rule of Law. A bank’s payment of a check is expressly authorized by U.C.C. Section:4-4013(a) and is per se the exercise of ordinary care under Section:4-4013(c).
Issue. Whether Respondent exercised ordinary care in charging a properly payable check against Petitioner’s account even though an overdraft would result.
Held. Yes. Respondent had authority to pay Petitioner’s check even though it created an overdraft.
Discussion. The language of Section:4-401 permits a bank to charge a properly payable check against a customer’s account even though an overdraft results. No showing of good faith is required. A bank is required to exercise ordinary care. However, payment of a properly payable item creating an overdraft is an action approved by Section:4-4013(a). Therefore it is the exercise of ordinary care. General banking usage, customs, or practices then, have no bearing on whether Respondent did or did not exercise ordinary care.