Checks and Funds Transfer Jo’s Account Jo maintained a checking account at Second Bank. In April, the bank sent her a statement of her account for March, accompanied by the checks that the bank paid. Jo realized that one of the checks had been written and signed by her 16-year-old son, Joel. The check was written for $325. Jo had not given Joel permission to write the check. On discovering this, Jo immediately notified the bank. Upon inspecting previous statements, Jo noticed that the bank had paid a different check forged by Joel in January. When examining this situation, explain the laws that may be applicable to this fact pattern. Are the dates important? Is Joel’s age a consideration under the law? Is the familial relationship relevant? Would the expected outcome change if Jo used a credit union as opposed to a bank? What steps should Jo take when the discovery is initially made? Ultimately, determine (per the law) who must bear the loss on the check forged in March and who must bear the loss on the check forged in January. Please cite your sources The Oral Stop Payment Order Marie wrote Ray a check for landscaping her front lawn. Marie paid Ray in advance. The check was dated for five days later than the date of issuance. Ray was supposed to start landscaping on Monday. That Friday, Ray still had not shown up to do the job. Marie had the work done by someone else. Marie gave her bank, Second Citizens, an oral stop payment order on the check to Ray. Twenty-three months later, the check emerged and Second Citizens honored it. Marie has filed suit against Second Citizens for acting unreasonably under the circumstances. Is Second Citizens liable to Marie for paying the 23-month-old check when there was an oral stop payment order? What laws are applicable to this fact pattern? Discuss your reasons for your answer. Please cite your sources
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