Ervin signs a check "pay to the order of Felicia" drawn on Ervin's account in Garden Valley Bank.Ervin later orders Garden Valley not to pay the check,but the bank pays it over Ervin's order.Subsequent checks written on Ervin's ac-count "bounce." Most likely liable for the costs to Ervin is
A) any party to whom a subsequent check was written.
B) Ervin.
C) Felicia.
D) Garden Valley Bank.

Question

Ervin signs a check "pay to the order of Felicia" drawn on Ervin's account in Garden Valley Bank.Ervin later orders Garden Valley not to pay the check,but the bank pays it over Ervin's order.Subsequent checks written on Ervin's ac-count "bounce." Most likely liable for the costs to Ervin is​ 
A) ​any party to whom a subsequent check was written. 
B) ​Ervin. 
C) ​Felicia. 
D) ​Garden Valley Bank.

Quizplus · Accepted Answer

Garden Valley Bank is liable for paying the check after receiving Ervin's order not to pay. As a result, Garden Valley Bank has breached its duty to Ervin and should compensate him for any resulting losses. Felicia is not liable because she received the check in good faith and had no knowledge of Ervin's subsequent order. Ervin is also not liable because he gave instructions to the bank not to pay the check. Any subsequent check recipients are not liable because they have no connection to the original check and did not cause Ervin's losses.

Ervin Signs a Check "Pay to the Order of Felicia