Channel Equipment Co. v. Community State Bank

J. WOODFIN JONES, Justice.

Channel Equipment Company, Inc. and CSR Sales & Rentals, Inc., f/k/a CSR-Capital Sales & Rentals, Inc. (collectively “Plaintiffs”) received payment from the same third party via separate checks drawn on an account at Community State Bank (“the Bank”). The Bank returned the checks marked “not sufficient funds,” but not before the statutory “midnight deadline” had passed. See Tex. Bus. & Com.Code Ann. (hereinafter “Code”) § 4.104(10) (West Supp.1999). Plaintiffs sued the Bank, claiming it was strictly liable on the checks pursuant to section 4.302 of the Code. See id.…