Cengage Advantage Books: Business Law 9th Edition by Arnold Goldman ,William Sigismond

Exercise 8

Middle Georgia Livestock Sales bought cattle at an auction, paying by check. A couple of days later, Middle Georgia discovered that it had purchased stolen cattle and put through a stop-payment order on the check. Commercial Bank, however, cashed the check without knowledge of the stop-payment order. When the drawee bank refused payment, Commercial Bank sued the maker of the check. In this state, a transaction involving stolen goods is illegal and void. Can Commercial Bank collect from the maker? (Middle Georgia Livestock Sales v. Commercial B T Co., Ga. 182 S.E.2d 533)