On November 7, 2010, Edward Nicholson issued a check in the amount of $21,000 payable to the order of Michael Kittinger based upon Kittinger\'s fraudulent representations concerning a real-estate transaction. That same day Kittinger delivered the check without endorsing it to Chase Bank, which paid him $ 5,000 in cash and deposited the balance to his account. Chase Bank stamped the back of the check \"Pay any bank, banker, or trust company, prior endorsements guaranteed\" and sent it to the drawee, Metropolitan Bank, for payment. Metropolitan paid Chase Bank and deducted $21,000 from Nicholson
Solution
According to the Federal Deposit Insurance Corporation, the Federal Reserve Board, or the Office of the Comptroller of the Currency the regulations with regard to negotiations an endorsements are governed by regulation A.
The bank acts in good faith of the customer and represents the customer in all his dealings. There is no agency relationship that the bank has with the customer except that the bank acts as the safe keeper of the customer
.
On November 7- 2010- Edward Nicholson issued a check in the amount of.docx
1. On November 7, 2010, Edward Nicholson issued a check in the amount of $21,000 payable to
the order of Michael Kittinger based upon Kittinger's fraudulent representations concerning a
real-estate transaction. That same day Kittinger delivered the check without endorsing it to Chase
Bank, which paid him $ 5,000 in cash and deposited the balance to his account. Chase Bank
stamped the back of the check "Pay any bank, banker, or trust company, prior endorsements
guaranteed" and sent it to the drawee, Metropolitan Bank, for payment. Metropolitan paid Chase
Bank and deducted $21,000 from Nicholson
Solution
According to the Federal Deposit Insurance Corporation, the Federal Reserve Board, or the
Office of the Comptroller of the Currency the regulations with regard to negotiations an
endorsements are governed by regulation A.
The bank acts in good faith of the customer and represents the customer in all his dealings. There
is no agency relationship that the bank has with the customer except that the bank acts as the safe
keeper of the customer
