Overdraft authorization and the provision of the check

A bank on which a check has been issued is required to pay the amount, provided that the provision was constituted at the time of issue, thanks to a credit authorization granted to the drawer and the day of the presentation of the check , the balance of the account is not lower than the provision of the check when it is issued. The subsequent revocation of the overdraft can not be prejudicial to the payee of the check.

The provision of a check may result from a credit limit granted to the drawer

The provision of a check may result from a credit limit granted to the drawer

The issue of the check, that is to say its delivery to the beneficiary transfers the provision thus constituted to the latter.

The subsequent revocation of the overdraft authorization, taking into account this transfer, can not deprive the beneficiary of the check of its payment, since at the date of its presentation, the provision has not totally or partially disappeared by withdrawals ordered by the account holder.

The revocation of the credit opening does not operate, in other words, retroactively with regard to previously issued checks.

The bank that was drawn in this case had rejected two checks on the basis of “liquidation and bankruptcy”. It argued that on the day of the opening of the judicial recovery of the shooter, the account of it was debtor. Convicted by the Court of Appeal, his appeal was dismissed, since this debit balance was less than the cash facility within which the checks were issued, little matter the subsequent revocation thereof.

It is useful to reproduce the two expected from the reported judgment:

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“But whereas, if the bank, on which a check was issued, is not obliged to pay the amount, when the balance of the account drawn, greater than the provision of the check on its issue, has become then insufficient as a result of withdrawals ordered by the customer account holder, it is otherwise when the provision was constituted at the time of issue through an overdraft authorization then granted to the drawer, the subsequent revocation of the overdraft not being prejudicial to the beneficiary check that the court of appeal held that in view of the overdraft agreed at the time of the issue of checks, evidence of their shortfall was not reported;

But whereas it is without disregarding the object of the dispute, nor violating the principle of contradiction that the judgment was based on the conclusions of the parties, to analyze the situation of the account drawn to the dates of issue of the checks, their presentation, the revocation of the authorization of overdraft, the setting in receivership of the issuing company and estimated that at the dates of issue and presentation of the checks the insufficiency of the provision in view of the amount of the discovered was not established; that the means is not founded in any of its branches “.

With this reminder, however, that is only so provided that the fencer’s account has not been closed prior to the presentation of the check, because, as the commercial chamber, the bank, after the closing of the account is no longer required to extend his overdraft, even for checks previously issued under this overdraft.

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