## Facts

- Thomas (plaintiff) maintained a deposit account at First National Bank of Scranton (First National) (defendant).
- Thomas wrote a check drawn on his First National account.
- Before the check was paid, Thomas went to First National and requested that the bank stop payment on the check.
- First National provided Thomas with a “Request to Stop Payment” form, which Thomas signed.
- The form stated that First National would not be responsible if the check was paid “through inadvertence, accident or oversight.”
- The form also stated that Thomas agreed to be legally bound by the terms set out in the form.
- Despite the stop-payment request, First National paid the check and charged Thomas’s account; the payment occurred “through inadvertence, accident or oversight.”
- Thomas sued First National to recover the amount paid on the check.
- The trial court held that First National was required to reimburse Thomas for the amount of the check.

## Issues

1. After a customer gives a stop-payment order, can a bank avoid liability for paying the check by relying on an exculpatory clause in its stop-payment form stating it is not responsible if payment occurs through “inadvertence, accident or oversight”?

## Decision

- The appellate court affirmed the trial court’s judgment for Thomas.
- A valid stop-payment order obligated the bank to refrain from paying the check; paying it by mistake did not excuse performance.
- The clause in the bank’s stop-payment form purporting to relieve the bank from responsibility for payment caused by “inadvertence, accident or oversight” did not bar Thomas’s recovery.
- Thomas was entitled to recover from First National the amount of the check that the bank paid despite the stop-payment request.

## Legal Principles

- A customer’s timely stop-payment order creates a duty on the bank not to pay the described check and not to charge the customer’s account for it if payment is made contrary to the order.
- Contract language drafted by a bank to excuse its own payment error is construed narrowly, particularly where it would shift the loss from the bank’s mistake to the customer who provided clear instructions.
- A bank generally may not use a standardized stop-payment form to eliminate responsibility for paying a check after receiving a stop-payment request, when the payment results from the bank’s own mistake in processing the order.
- When a bank pays a check in violation of an effective stop-payment order, the customer’s remedy includes recovery of the amount wrongfully charged to the account.

## Conclusion

Thomas properly stopped payment on his check by signing the bank’s stop-payment request, and the bank nevertheless paid the check due to its own mistake. The court held the bank could not avoid reimbursement by pointing to the form language excusing payment made through “inadvertence, accident or oversight,” and it affirmed judgment requiring First National to repay Thomas the amount charged to his account.


Thomas v. First National Bank of Scranton, 96 A.2d 196 (1953)