As payment in advance for services to be performed, Acton
signed and delivered the following instrument:
December 1, 2018
LAST NATIONAL BANK
MONEYVILLE, STATE X
Pay to the order of Olaf Owen $10,500.00 _______
Ten Thousand Five Hundred Dollars ______ For services to
be performed by Olaf Owen starting on December 6, 2018.
(signed) Arthur Acton
Owen requested and received Last National Bank’s certification of the check even though Acton had only $9,000 on
deposit. Owen indorsed the check in blank and delivered it to
Dan Doty in payment of a preexisting debt.
When Owen failed to appear for work, Acton issued a
written stop payment order ordering the bank not to pay the
check. Doty presented the check to Last National Bank for payment. The bank refused payment.
What are the bank’s rights and liabilities relating to the
transactions described?