We recommend consulting with legal counsel before freezing the husband’s account. Absent a contractual or common law right of set-off, the applicability of which would be highly fact-specific, your bank’s right to freeze the husband’s deposit account will depend on your deposit account agreement with the husband. Without knowing more facts, and in the absence of any specific provisions in your account agreement that might apply to this situation, we would not recommend freezing the account until you have consulted with legal counsel.

We note that when the husband deposited the check without the wife’s endorsement, he likely was in breach of the UCC presentment warranties that attach whenever a customer submits a check for payment. The presentment warranties include a warranty that the person submitting the check for payment was “entitled to enforce” the check, meaning that it was not missing any endorsements. The same presentment warranty also attaches when your institution, as the collecting bank, submits a check to the payor bank. 

We also note that most actions under the UCC carry a three year statute of limitations. However, we do not know enough facts to determine when the three year statute of limitations would be considered to have begun to run in this situation.

For resources related to our guidance, please see below:

• UCC — 810 ILCS 5/4-207 — Transfer warranties of customer to the transferee and any subsequent collecting bank, including the warranty that the “warrantor is a person entitled to enforce the item”
• UCC — 810 ILCS 5/3-110(d)  — Requirement to obtain indorsement of both payees for check payable to two persons, as in “A and B” (unless the payees are named in the alternative, as in “A or B”)
• 810 ILCS 5/3-118 — UCC Article III, statute of limitations of three years
• 810 ILCS 5/4-111 — UCC Article IV, statute of limitations of three years