We accepted a check indorced (endorced) by the drawer of the check. It our mind this was unusual but don't see anything wrong with it. The payee is complaining that we couldn't accept the check without their endorcement. Any opinions?

You don't know whether the drawer actually delivered the check to the payee. It is unusual for the drawer to indorse a check payable to someone else. What we don't know here is to whose account the check was deposited.

If the payee never received the proceeds of the check, the payee was never paid and the drawer hasn't satisfied the drawer's obligation to the payee, if there was one.

the payee never received the check. the drawer still owes money to the payee. We, the bank are trying to tell the drawer and the payee this is strictly between them. We have no obligation or liability because we allowed the drawer to deposit the check back into their own account. The payee received a copy of the check from the drawee, otherwise they never would have know the check was deposited. There appears to be some dispute between the drawer and the payee.

The check was deposited into the drawers account. The presented it with thier daily deposit instead of sending it to the payee.

This is between the drawer and the payee. If the drawer didn't deliver the check to the payee, the payee was never paid. All other things being equal, the drawer still owes the payee. The bank is not involved (legally).

That is our take. The payee attorney has written us a letter asking by what authority we allowed someone other than the payee deposit the check.

The payee's attorney is claiming we accepted an item with an improper endorcement. Appearently the drawer is resisting paying thier debt and the payee would like to make it the banks problem.

What I don't understand is why would the drawer cash his own check instead of voiding it if he didn't wat to pay the payee. Was it deposited into the same DDA as it was drawn from?

I would look very closely at the drawer here, it would seem that he's trying to pull something with the payee and using the bank in the process.

I think it was mistakenly put in their deposit instead of mailed. I have no idea why they don't just pay the payee and be done with it unless the late payment has created additonal cost or someother dispute has come about since. They money went into the account the check was drawn on.