Champion International Corp. v. Union National Bank

ARNOLD, Judge.

The question presented by this appeal is whether the Bank improperly cashed three certificates of deposit to the registered holder when it had notice that the State Bureau of Investigation (SBI) had confiscated the actual certificates in connection with an investigation of fraud and embezzlement of Champion by an employee.

The Bank argues that Article 3 of the UCC applies to the certificates and suggests that its handling of the certificates was correct. Assuming Article 3 does apply, we find, however, that it does not sanction the Bank’s cashing of the certificates.

The…