Checks and Funds Transfer
Mayola Smith
South University
BUS3055
Business Law For Commercial Transactions
Professor Shirley Chapin
February 17, 2013
Checks and Funds Transfer
The law is classified in numerous ways and in the case of Jo and Joel Substantive law, Criminal Law and the Juvenile Justice and Delinquency Act of 1974 applies. Substantive law refers to every type of private and public law including real property, torts, law of contracts, as well as Criminal law. (Twomey & Jennings, 2011, Ch.1, p.9). Criminal law is the body of law that relates to crime dealing with cases related to threatening, or harming the health and welfare of people. For example, criminal law identifies what behavior is illegal and what part of the government must prove and punish those who violate the law. The Fourth, Fifth, and Sixth Amendments of the Constitution guarantee the rights of a person accused of a crime during a criminal procedure. Civil law and criminal law are different; civil law deals with dispute resolution and victim compensation rather than punishment. Tort Law covers any civil action between private parties that arise from unlawful acts. (Hess & Drowns, 2009).
The date Joel forged the checks and family relationship is irrelevant because regardless he did cash the checks without his mother’s signature and knowledge. Since Joel is a juvenile his age will be considered under the law but it does not mean one can commit fraud. Whether Joel used a bank or a credit union the expected outcome is the same. Bank of Nichols Hills v Bank of Oklahoma, 196 P3d 984 (Ok App 2008) a drawee bank that honors a customer’s check with a forged signature have to re-credit the customer’s bank account when the customer discovers the forgery and officially notifies the bank. Ultimately the bank is liable for the loss of both checks when it cashes a check without proper identification. (Twomey & Jennings, 2011, Ch.31, p.4, para.13). Jo has to bear the loss on the checks forged in March and January because her son forged the checks and not the third party from who she will get the compensation.
A “postdated check” is not a check but a time draft. (UCC 4-401 to XXXXXXXXXXA customer (drawer) may postdate a check however the bank is not liable for making payment on the check prior to the date stated unless the drawer has provided the bank specific information to signal the check is ready to process. A Bank must be given reasonable time to put stop payments in effect. However if the bank pays the check after being notified properly the bank is liable to the customer. Revised UCC 4-403(c); Gornicki v M&T Bank, 617 NYS2d XXXXXXXXXXThe bank should have complete information for a stop payment order, including the check number, payee and the check amount to be held accountable for failing to stop payment on a customer’s check. (Twomey & Jennings, 2011, Ch.31, p XXXXXXXXXX, para.10-11).
Marie gave Second Citizen Bank an oral stop payment order but she did not follow up with a written notification required by most financial institutions. State laws and bank regulations depending upon the bank and the state primarily govern stop payment orders. [Rovell v American Nat’l Bank, 232 BR 381, 38 UCC2d 896 (ND Ill 1998] Marie did not give Second Citizen Bank all of the required information for a stop payment order and the bank should not be held liable for the check being paid. Marie should bear the loss for failing to provide all of the necessary information for the stop payment order. (Twomey & Jennings, 2011, Ch.31, p.698).
References
Hess, K.M. & Drowns, R.W. (2009).
JuvenileJustice. Wadsworth Publishing
FederalBankingLaw. (n.d.). Retrieved from
http://library.law.unc.edu/research/guides/bankinglaw/default.aspx
Twomey, D. & Jennings, M. (2011).
Anderson’sBusinessLawandTheLegalEnvironment.
South-Western Cengage Learning