Cases on Negotiable Instruments Act

Issue: Under the state’s tort law, does forgery occur when an individual finds a check written out to cash, and was there any intent to injure or defraud.

Any Kind Checks Cashed, Inc. was a holder in due course in its case v. Talcott. In this case and elderly gentleman John C. Talcott, who was defrauded the sum total of $15,700 in the form of two checks, $10,000 and $5,700 respectively. Both checks were issued to D. J. Rivera and were later cashed at Any Kind Checks, Inc. by Salvatore Guarino. Talcott stopped payment on both checks after the initial check was an over payment and the second was discovered be conceived by fraud. Both checks were returned to Any Kind Checks Cashed, Inc. Any Kind Checks, Inc. brought suit against Talcott and Salvatore Guarino (Twomey & Jennings, 594-597).

Banks owe their customers a number of duties so long as the banker-customer relationship is formed . The banker-customer relationship will normally be governed by the law of contract. However,

I agree with the court’s decision in favor of Mills. The case fall under the Statue of Fraud One year rule as it had been 107 months since the oral contract was created. The oral agreement was unenforceable after the time period as it violates the Statute of Fraud. Mrs. Sawyer did not have the agreement in writing; therefore it could not be enforced even though he had paid a little over 13 months in checks.

as the receiver and sent a letter to the defendant’s bank demanding payment, which was

To elaborate further, a banking representative is required to present or extend some kind of product referral after every conversation. The representative makes the referral and phrases something incorrectly. If the consumer misinterprets the information and later disputes the validity of a debt, a lawsuit will arise. Most of the time, if the expense is petty, a firm will pay out a demand without dispute. If the issue goes to court and is pursued, the conversation between the representative and the consumer will be reviewed and interpreted in favor of the consumer. As a result of common complacency issues, the government imposed regulations to reduce the frequency of claims. Preventing unnecessary suits, fees, or fines is a priority amongst all financial institutions and Sun Trust should have incorporated such external influences in their risk register along with contingencies to resolve the issues and implement preventative measures.

Unbeknownst to the plaintiffs, the funds meant for their benefit were transferred without their consent to benefit the fiduciary, who was reasonably relied upon to manage his brother’s Estate with integrity, thus injuring the plaintiffs, which meant that these transactions were fraudulent. In a previous case, Sher v. Sandler, 325 Mass. 348, 353, 90 N.E.2d 536 (1950), the remedy decided on by the court was to rescind the transactions the fiduciary made when the breach of duty to the beneficiary was found. This same case provided a precedent for the use of the defendant’s remaining assets, untraceable to the fraudulent transactions, as remedy to the injured plaintiffs. The plaintiffs’ request for equitable relief was therefore found to be appropriate and reasonable, and was approved by the judge as a final judgment in accordance with Massachusetts Civil Law, which states that when there is more than one claim for relief, “the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.” (Mass.R.Civ.P.

Under the Uniform Commercial Code (UCC), section 3-302, the bank took the check for value, in good faith, without notice that the check was dishonored, and had not been altered. Therefore, the credit union paid the check, indorsed the instrument, and submitted to the maker for payment. (Law.Cornell.com, 2015) Due to the fact that the Credit union met the requirements of the UCC, section 3-302 they are a Holder in Due Course.

When the negotiable instruments the holder-in-due course occurs when the payment is still obligated under the contract from the drawer and is the holder of the promisory note or check. The promisory is a promise of good faith and when there is a disqualification the holder is the one still entitled to the responsibility of payment. For example, if the terms are because of late payments, damaged goods, or overdrawn fees the institution is still able to collect the money along with any fees associated (Negotiable Instruments & Banks, 2013).

Case Analysis: Blanchard Importing and Distributing Co. Inc. (HBS Case 9 - 673 - 033)

Uniform Commercial Code, § 3-410; Dziurak v Chase Manhattan, 58 A.D.2d 103, supra; Matter of Bank of United States [O'Neill], supra was used to highlight the banks primary obligation to issue payment on demand for a cashier’s check since a cashier’s check is drawn by a bank and accepted in advance based on the act of issuance. Additionally, Subdivision (1) of section 4-303 of the UCC states that the payor bank cannot terminate, suspend, or modify the banks duty to pay an item or charge a customer’s account if notice is given without reasonable time for the bank to act on behalf of the notice expires or if the bank has accepted or terminated the item, which applies to the personal check that was cashed by the plaintiff. Furthermore, the Plaintiff’s request for the plaintiff to pay attorney fees was denied based on Klein v Sharp,41 AD 2d 926 which determined that attorney fees will not be imposed on the opposite party without the existence of a contract or statute that authorizes such

Royal Insurance Company, Ltd, the issue of holder in due course arises. Federal Credit Union had a check deposited into their bank by a member for the amount of $12,000. This check at the time was of deposit was in dispute but not known to the depositor nor the Credit Union. Royal Insurance Company issued a stop payment on the check the same date that it was deposited. Immediately upon receiving the check the credit union deposited it and forwarded it to Morgan Guaranty for payment. Morgan Guaranty is the bank used by Royal Insurance and the check was payable through them. The definition of Holder in Due Course is “a holder who takes an instrument for value, in good faith, and without notice that it is defective or overdue” (Cheeseman, 2013). The payee or bearer in this case deposited the check or negotiable instrument into the credit union. The credit union would fall under the holder in due course according to doctrine. There was at that time no evidence of forgery, alterations, or irregularity upon presentation of the check to the credit union. In this case the Credit Union wins. According to the HDC doctrine and the requirements for holder in due course the bank is owed the money that was deposited by the maker or drawer of the check. The UCC requirement for taking without notice of defect requirement stipulates that “ a person cannot qualify as an HDC if he or she has notice that the instrument is defective in certain

Any Kind Checks did not have prior notice of the check being dishonored by Mr. Talcott when Guarino attempted to cash it. However, because of its value, they show that they had reason to contact the maker for approval. It is also reasonable for Any Kind to take Mr. Guarino’s actions as suspect. As is pointed out in the brief, why would a small business owner, particularly one who is a broker of investments, utilize a check cashing business for this transaction rather than a traditional financial institution? This question in and of itself should give cause for concern to Any Kind considering their policy that any check over $2,000 requires approval. A revision to Article 3 of the UCC added a provision for not only “honesty in fact,” but also for the “observance of reasonable commercial standards of fair dealing.” Because a reasonable party could reasonably consider Guarino’s actions as suspect, and outside of the commercial standards of fair dealing, the burden of proof is significantly higher in showing good faith and fairness toward all parties (including the maker of the instrument).

Case Analysis: Blanchard Importing and Distributing Co. Inc. (HBS Case 9 - 673 - 033)

• Describe the meaning and marketing of cheques, crossing of cheques and cancellation of crossing of a cheque;