Consolidated Cigar Company, Etc., Cross-Appellant v. Texas Commerce Bank (Formerly Pan American Bank), Cross-Appellee

WISDOM, Circuit Judge:

I. FACTS AND PROCEEDINGS BELOW

The plaintiff-appellee, Consolidated Cigar Company (“Consolidated”), received three checks from Eli Witt Company totalling more than $780,000. Consolidated deposited these checks in its own demand deposit account, and its bank forwarded the checks for collection to Eli Witt’s bank, the Texas Commerce Bank at Brownsville (“Commerce Bank”). Commerce Bank received the first of these checks on June 26, 1979, and processed and posted the draft. On June 27, 1979, Commerce Bank received the other two checks, which totalled approximately $750,000.…