WHAT IF THE FACTS WERE DIFFERENT? Suppose that the court had accepted Charter One’s argument that a cashier’s check should be treated as a note and the bank had presented proof of fraud in the procurement of the check. What might have been the result in this case? Explain.

MANAGERIAL IMPLICATIONS It is worth noting that no one—managers and consumers alike—can treat stop-payment orders casually. These orders have to be for a valid cause, such as fraud or non-delivery of merchandise or services purchased. Moreover, when a cashier’s check is involved, as the court determined in this case, there virtually is never a valid reason to place a stop payment order on a cashier’s check, and banks normally should ignore such orders.

Mary Christelle was the mother of David Hernandez, president of Essential Technologies of Illinois (ETI). Christelle bought a $50,000 cashier’s check from Charter One Bank payable to ETI. ETI deposited the check into its account with Mid America Bank. Four days later, Christelle asked Charter One to stop payment on the cashier’s check. Charter One agreed and refused to honor the check. Mid America returned the check to ETI. Within two weeks, ETI’s account had a negative balance of $52,000. Mid America closed the account and filed a suit in an Illinois state court against Charter One, alleging that it had wrongfully dishonored the cashier’s check. Charter One argued that a cashier’s check should be treated as a note subject to the defense of fraud. The court ruled in Mid America’s favor, but a state intermediate appellate court reversed the ruling. Mid America appealed.