Rock Island Auction Sales, Inc. v. Empire Packing Co., Inc.

204 N.E.2d 721 (1965)

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Nature of the Case

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Facts

Rock (P) sold 61 head of cattle to D and received D's check in the sum of $14,706.90. The check was dated September 24, 1962, and P deposited it in the First Bank and Trust Company. The payor bank, Illinois National Bank (D1) got it on Thursday, September 27, 1962. D's balance was inadequate. D1, relying upon D's assurances that additional funds would be deposited, held the check until Tuesday morning, October 2, 1962. It then marked the check 'not sufficient funds,' placed it in the mail for return to the Federal Reserve Bank of Chicago and sent notice of dishonor by telegram to the Federal Reserve Bank. The depositary bank received the check on October 4, 1962. On November 7, 1962, bankruptcy proceedings were instituted against D and on December 13, 1962, D was adjudicated a bankrupt. P sued Ds and Peter Cacciatori, the officer of D who had signed the check. P claims that D1 became liable for the amount of the check because it held the check without payment, return or notice of dishonor, beyond the time limit fixed in UCC 4-302. D1 contends in part that 4-103(5) applies. The trial court entered judgment for P for the face amount of the check, and D appealed.