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Bank wrongfully refused to pay cashier's check

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In an issue of first impression as to what circumstances an issuing bank may refuse to pay a cashier's check, the Indiana Court of Appeals ruled in the instant case the issuing bank wasn't entitled to stop payment on it later.

In South Central Bank of Daviess County v. Lynnville National Bank, Bryan K. and Lisa C. Fisher, No. 87A01-0806-CV-256, the Court of Appeals for the first time today considered the propriety of a bank's refusal to pay a cashier's check under the Uniform Commercial Code.

Bryan and Lisa Fisher obtained a cashier's check for a down payment on a manufactured home they purchased through Landmark Housing Center, which had an account at South Central Bank. Shortly after the Fishers signed a contract with Landmark, they discovered Landmark was no longer a registered dealer with Patriot Homes and wanted to stop payment on the cashier's check. By then, South Central's bank manager had already called and confirmed the cashier's check with Lynnville and credited it to Landmark's account. Even after it was informed by Lynnville that it wasn't going to pay the cashier's check, South Central paid out $24,000 to a Landmark principal the next day.

South Central filed suit, alleging Lynnville wrongfully refused payment and sought the amount of the original cashier's check, plus prejudgment interest, attorney fees, and costs. Lynnville denied liability and contended South Central failed to mitigate its losses. The trial court granted Lynnville's cross-motion for summary judgment.

Indiana Code Section 26-1-3.1-411, which is modeled after Article 3 of the UCC, explains the specific situations in which an obligated bank can stop payment on a cashier's check. None of those circumstances occurred in this case, wrote Chief Judge John Baker.

"Lynnville's obligation to pay was clear and it was able to pay, but it refused payment on the check as an accommodation to the Fishers, who had no right to make that request," he wrote. "This statute was enacted specifically to discourage that practice."

The appellate court also found that South Central is a holder in due course of the cashier's check, which limits Lynnville's available defenses to those that fall under Indiana Code Section 26-1-3.1-305(a)(1), and none of those apply to Lynnville, he wrote.

Lynnville's arguments that South Central failed to mitigated its damages also failed. The Court of Appeals remanded with instructions to enter final judgment in favor of South Central in the amount of $31,917.55 - the original cashier's check - plus expenses, interest, and any consequential damages determined by the trial court.

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  1. I will continue to pray that God keeps giving you the strength and courage to keep fighting for what is right and just so you are aware, you are an inspiration to those that are feeling weak and helpless as they are trying to figure out why evil keeps winning. God Bless.....

  2. Some are above the law in Indiana. Some lined up with Lodges have controlled power in the state since the 1920s when the Klan ruled Indiana. Consider the comments at this post and note the international h.q. in Indianapolis. http://www.theindianalawyer.com/human-trafficking-rising-in-indiana/PARAMS/article/42468. Brave journalists need to take this child torturing, above the law and antimarriage cult on just like The Globe courageously took on Cardinal Law. Are there any brave Hoosier journalists?

  3. I am nearing 66 years old..... I have no interest in contacting anyone. All I need to have is a nationality....a REAL Birthday...... the place U was born...... my soul will never be at peace. I have lived my life without identity.... if anyone can help me please contact me.

  4. This is the dissent discussed in the comment below. See comments on that story for an amazing discussion of likely judicial corruption of some kind, the rejection of the rule of law at the very least. http://www.theindianalawyer.com/justices-deny-transfer-to-child-custody-case/PARAMS/article/42774#comment

  5. That means much to me, thank you. My own communion, to which I came in my 30's from a protestant evangelical background, refuses to so affirm me, the Bishop's courtiers all saying, when it matters, that they defer to the state, and trust that the state would not be wrong as to me. (LIttle did I know that is the most common modernist catholic position on the state -- at least when the state acts consistent with the philosophy of the democrat party). I asked my RCC pastor to stand with me before the Examiners after they demanded that I disavow God's law on the record .... he refused, saying the Bishop would not allow it. I filed all of my file in the open in federal court so the Bishop's men could see what had been done ... they refused to look. (But the 7th Cir and federal judge Theresa Springmann gave me the honor of admission after so reading, even though ISC had denied me, rendering me a very rare bird). Such affirmation from a fellow believer as you have done here has been rare for me, and that dearth of solidarity, and the economic pain visited upon my wife and five children, have been the hardest part of the struggle. They did indeed banish me, for life, and so, in substance did the the Diocese, which treated me like a pariah, but thanks to this ezine ... and this is simply amazing to me .... because of this ezine I am not silenced. This ezine allowing us to speak to the corruption that the former chief "justice" left behind, yet embedded in his systems when he retired ... the openness to discuss that corruption (like that revealed in the recent whistleblowing dissent by courageous Justice David and fresh breath of air Chief Justice Rush,) is a great example of the First Amendment at work. I will not be silenced as long as this tree falling in the wood can be heard. The Hoosier Judiciary has deep seated problems, generational corruption, ideological corruption. Many cases demonstrate this. It must be spotlighted. The corrupted system has no hold on me now, none. I have survived their best shots. It is now my time to not be silent. To the Glory of God, and for the good of man's law. (It almost always works that way as to the true law, as I explained the bar examiners -- who refused to follow even their own statutory law and violated core organic law when banishing me for life -- actually revealing themselves to be lawless.)

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