Savings Banks Trust Company v. Federal Reserve Bank of New York, and American Savings Bank

The present case arose out of the theft of a signed but otherwise incomplete teller’s check drawn on an account maintained by Franklin Savings Bank with the plaintiff, Savings Banks Trust Company (“Savings”). Savings received a written stop payment order with respect to the check in question from Franklin. Persons not involved in the present litigation completed the check and proceeded to deposit it in a North Carolina bank. The check came into possession of the defendant Federal Reserve Bank of New York through ordinary collection channels and was presented to Savings for payment. Savings…