Question

If Lucy goes to the bank and demands that the bank credit her with the amount deposited, will she be successful? Why or why not? Explain your answer by including references to the requirements for a negotiable instrument.

Charlie Brown bought a collectible football signed by all the members of his favorite NFL team. The ball was jointly owned by sister and brother Lucy and Linus Van Pelt. Both Lucy and Linus agreed to sell the ball. On the day that Charlie went to the Van Pelt house to pick up the ball, Lucy was out at a therapy appointment. Charlie gave Linus the check and took the football home. Linus deposited the check on his way to baseball practice. When Lucy found out that Linus had deposited the check, she was furious. Linus was willing to give Lucy half of the payment but Lucy claimed that she owned more than 50% of the football because she likes football more than Linus.

Answer 1

No, Lucy’s request for the deposit of the amount will be turned down by the bank. As per section § 4-401 of UCC the bank is responsible for the honoring of the negotiation instrument for instance a check. The bank can honor the check if the account holder has authorized then bank to honor the instrument with all the legal formalities such as dully signed, date, amount, name of the bearer, and so on.

In the given case, only Linus was present at the time when the check was written by Charlie and as both since Lucy and Linus were partners so the check was made for Linus. Therefore on the basis of the check, only Linus was authorized to collect the payment. Thus as per section § 4-401 of USS, Lucy does not have any right to claim to deposit the amount in her account