A friend of mine is going through marriage difficulties. His wife has in her possession a large settlement check that was made payable in both his name AND her name. Is it possible for this check to be deposited into a joint account without his signature? He is concerned that she may take all of the funds if the check is negotiated. If there isn't a signature on the check, and it has been deposited, is he out the money since it went to a joint account with his name on it? I told him to call the bank and a lawyer as it sounds like this could get very sticky. Thanks in advance for your help.

Deposits can usually be made without personal endorsements, and the signature card and agreement probably allow withdrawals by either party. Closing the account would prevent that from happening.

Calling a lawyer is very good advice. I certainly cannot provide a legal opinion.

You're right- it could get very sticky. And telling him to call his bank and his attorney is certainly a good start. I'd suggest that he tell his bank that he did not endorse the check, and does not want the check negotiated, even for deposit to a joint account, unless he is present and the bank verifies his endorsement. Most teller systems shoudl be able to accomodate putting a message to this effect on his account without disrupting the use of his account.

If your friend and his wife are disputing who gets what share of the check, there is nothing the bank can do to resolve that issue. The proceeds of the check are likely marital property, so the allocation of the funds will need to be discussed through the appropriate legal channels.

Hypothetical scenario and question. Say the check was deposited to a joint account without being signed by one of the parties. Since the bank of first deposit guarantees all previous endorsements, what liability does the bank have for depositing a check to a joint account that was not properly endorsed?

In general, a bank can provide the endorsement of its depositor, and is generally presumed to have done so. See UCC §4-205. In order for this rule to apply, the check must be deposited to a joint account owned by the joint payees, with or without other joint account owners.

For example, suppose a check is payable to A&B. C, who holds a three-way joint account with A&B, causes the check to be deposited to the A,B, or C joint account, without endorsement by either A or B. C then withdraws the funds. The bank supplies the endorsement of A&B, and is not liable even though A&B received none of the money.

I may be splitting hairs here, but if the check was payable to A&B, wouldn't it need to be deposited to an account titled the same way if all necessary endorsements are not present. If the account is titled as AORB, would the bank still have taken the item in good faith? Please correct me if I am wrong here.

My read of Brady on Bank Checks does not require that the account use the same conjunction as the check. The point, frankly, of the UCC provision, is to allow a bank to provide its depositor's endorsement. Once it's supplied an endorsement for each of the depositors, it really doesn't make any difference whether the conjunction is AND, OR, or nonexistent.

Individual states' laws on point may push the result in a different direction.

Thanks for the clarification, John.

Thanks to everyone who replied. Here is the conclusion of the story: My friend notified his bank to flag the account. The check was not negotiated and a stop payment was placed on the check. The funds were placed in a trust account in both of their names until everything is settled.