Falls Church Bank v. Wesley Heights Realty, Inc.
Court of Appeals of the District of Columbia
256 A.2d 915 (1969)
Wesley Heights Realty and Leopold Boeckl (defendants) wrote a $1,400 check to a customer, who deposited it with Falls Church Bank (the bank) (plaintiff). The bank let the customer withdraw $140 of that amount on credit before the check cleared. The defendants then stopped payment on the check, and the customer had no funds left to repay the $140. When the bank demanded the $140 from the defendants and they refused, the bank sued. The trial court ruled for the defendants, finding the bank had no security interest in the check and was not a holder in due course for value.
Whether a bank is a holder in due course for value, to the extent that provisional credit given to a customer on a deposited item has been withdrawn by the customer.