Public Citizen, Inc., Plaintiff Below, Appellant v. First National Bank in Fairmont, Defendant Below, Appellee

Summary

The Supreme Court of Appeals of West Virginia reversed a judgment for First National Bank in Fairmont, which had accepted two corporate checks payable to 'Public Citizen, Inc. Attn Jim Kampanos' for deposit into the employee's personal account under an embezzlement scheme. Holding that the 1993 revisions to the West Virginia UCC did not apply retroactively to the 1989 transactions, the court held under pre-1993 law that the checks were payable jointly and that the bank acted commercially unreasonably as a matter of law by depositing corporate-payable checks into an individual account without inquiring into the endorser's authority, which barred it from asserting the payee's negligence under W. Va. Code § 46-3-406. The court further held that collecting-bank warranties under W. Va. Code § 46-4-207 do not run to a payee, so no breach-of-warranty claim lies, but that the payee stated a conversion claim under W. Va. Code § 46-3-419 to which the statute's reasonable-time discharge provision does not apply.