Farmers National Bank of Winfield v. Winfield Implement Co.

LAVORATO, Chief Justice.

This appeal presents the question whether a bank’s deposit of proceeds from promissory notes constitutes payment of a shortage in a depositor’s checking account that resulted from overdrafts. The bank sued the depositor and a shareholder of the depositor who had signed one of the promissory notes and an account agreement in which he agreed to be liable for any shortage resulting from overdrafts. The district court held that the deposit constituted such payment and sustained a motion for summary judgment filed by the defendants. The court of appeals reversed and…