We cashed a personal check that had "void" written across the front. I think we are liable and have to pay the account holder for the amount of the check but I can't find where in the UCC that tells me this. Is this considered a breach of warranty? Doesn't appear so...Fraud? Don't think so...can anyone help me with the answer and point me to the part of the UCC that gives the answer? Thanks much!!

I do not know if enough informaiton is given to determine if it is a UCC issure.

Have you seen

http://caselaw.findlaw.com/ny-court-of-appeals/1444921.html

Thank you, EdAudit. The court case seems to be the closest to what we have here. Instead of the check having a fraudulent endorsement, it can be considered as not being endorsed at all because the check had 'void' written on the front. I found under UCC 3-417, the individual who negotiated the check did not make transfer warranties properly and under UCC 4-207 we can pass that loss on down the line to the bank that accepted the check for deposit. Thanks for your help...I really struggle with anything UCC-related so this was a tough one!

Did one of your tellers cash this check? If so, I have a hard time seeing how it would be supported by the above-mentioned court-case. That was dealing with a non-bank depositary, not a traditional bank where the teller made a mistake.

But again, I don't have enough info on how this happened to point you in the right direction in the UCC.