Business Law Today 9th Edition by Roger LeRoy Miller,Gaylord Jentz

Exercise 3

To pay Milled Grains Co., a supplier, Sonja issues a check in the amount due to Milled Grains. The check is drawn on United First Bank. A Milled Grains employee, with authorization, indorses the check and transfers it to Milled Grains' financial institution, Second Federal Bank. Second Federal puts the check into the regular bank collection process. If United First refuses to cash the check, who will ultimately suffer the loss? Could Sonja be subject to criminal prosecution if United First refuses to cash the check?