Business Law
Essay Preview: Business Law
Report this essay
November 23, 2009
MG261 Fall II 2009
Citation:
Firstar Bank, N.A. v. First Service Title Agency Inc. Ct App. Ohio 2004
Facts:
January 22, 2002 First Service Title Agency issued three checks due to a real estate transaction written on Key Bank.
Check one was issued to Richard G Knostman Atty and Mark Foster Atty, and Resa & Bardri Kermani for $850.00, check two was issued to JD Properties and Resa & Bardri Kermani for $36,295.80 and the last check was issued to Knab Mortgage for $4010.00.
First Service Title Agency learned that the real estate deal was fraudulent.
The next day, January 23, 2002, a stop payment was put on all three checks.
The checks were present to Firstar Bank the same day the stop payment was put on the checks by a person, Randall Davis, who has several accounts at Firstar Bank. Mr. Davis was not part of the checks.
The checks contained multiple indorsements, they all seemed to be in the same handwriting and had “for deposit only”
The checks were paid to Mr. Davis.
Key Bank returned the checks to Firstar stamp Payment Stopped.
History:
Firstar brought suit against First Service Title Agency and Mr. David.
Issue
Was Firstar Bank responsible for the three checks?
Holding
Reasoning
There are three major reasons the checks should not have been negotiated by Firstar Bank. First the teller thought all the signatures looked the same they showed signs of forgery. The checks had nothing to do with Randall Davis at all he was not a party to the any of the checks. Lastly, the checks stated “for deposit only” when checks state this no cash should be given the entire amounts should have been done as that stated “deposit only”.
Result
Judgement affirmed in favor of First Service Title Agency, Inc.