Pearl is the holder of a check drawn by Sharpe on Washington State Bank. Pearl also maintains an account at Washington State Bank. The check is deposited at the bank on Monday. On that same day, Sharpe’s account is overdrawn; but she promises to make a substantial deposit, so the bank holds the check until Thursday. Sharpe does not make the deposit, and the bank, on Friday, returns the check to Pearl, marked “Insufficient Funds.” Can Pearl require the bank to make good on the check? Why or why not?

Pearl is the holder of a check drawn by Sharpe on Washington State Bank. Pearl also maintains an account at Washington State Bank. The check is deposited at the bank on Monday. On that same day, Sharpe’s account is overdrawn; but she promises to make a substantial deposit, so the bank holds the check until Thursday. Sharpe does not make the deposit, and the bank, on Friday, returns the check to Pearl, marked “Insufficient Funds.” Can Pearl require the bank to make good on the check? Why or why not? Equipment Company bought equipment from Wells and paid him with a check drawn on Citizens Bank. When the equipment was not delivered the next day, Equipment Company stopped payment on the check. Wells cashed the check at his own bank, Fargo Bank. When the check was presented to Citizens Bank, it refused to honor the check because of the stop order. Can Fargo Bank successfully collect from Wells? Why or why not?
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