Business Law Today, Comprehensive 10th Edition by Roger LeRoy Miller

Exercise 4

Business Law Critical Thinking Group Assignment. On January 5, Brian drafts a check for $3,000 drawn on Southern Marine Bank and payable to his assistant, Shanta. Brian puts last year's date on the check by mistake. On January 7, before Shanta has had a chance to go to the bank, Brian is killed in an automobile accident. Southern Marine Bank is aware of Brian's death. On January 10, Shanta presents the check to the bank, and the bank honors the check by payment to Shanta. Later, Brian's widow, Joyce, claims that because the bank knew of Brian's death and also because the check was by date over one year old, the bank acted wrongfully when it paid Shanta. Joyce, as executor of Brian's estate and sole heir by his will, demands that Southern Marine Bank recredit Brian's estate for the check paid to Shanta.
1. The first group will determine whether the bank acted wrongfully by honoring Brian's check and paying Shanta.
2. The second group will assess whether Joyce has a valid claim against Southern Marine Bank for the amount of the check paid to Shanta.
3. A third group will assume that the check Brian drafted was on his business account rather than on his personal bank account and that he had two partners in the business. Would a business partner be in a better position to force Southern Marine Bank to recredit Brian's account than his widow Why or why not