Stringfellow v. First American National Bank

OPINION

ANDERSON, Justice.

We granted permission to appeal to consider the important question of whether a bank may dishonor its own cashier’s cheek. We conclude that a bank may not refuse to honor its cashier’s check and that the payee is entitled to recover from the bank for its dishonor. In this case, the bank is subrogat-ed by statute to the rights of the drawer against the payee. Because the evidence establishes that the payee owed the drawer more on the underlying transaction than the bank owes the payee for the cashier’s check, the payee is not entitled to recover.

BACKGROUND

Upon her…