Mid Wisconsin Bank V. Forsgard Trading Free Sample

Questions: 1. Should the court have given more weight to the fact that Forsgards account had been overdrawn twenty-four times? 2. Should, as Lakeshore also argued, the right of a drawer to stop payment on a check trump a bank's right to recover for its loss? Answers: 1. The agreement that had been made between Mid Wisconsin Bank and the Forsgard Trading Inc. was very much clear and it stated that the bank would provide the provisional credit only after it receives the assurance that the collection of any deposit including the items drawn on the bank is complete and final. Lakeshore immediately after writing a check that was payable to Forsgard, issued a stop payment order. This was done after the Mid Wisconsin had already made the payment to Forsgard Trading Inc. This made the bank to deduct the same amount of $ 18500 from the account of Forsgard. However, it resulted in a negative balance as the account of Forsgard was overdrawn. This made the Mid Wisconsin bank to charge the Forsgard Company and it filed case against Forsgard. On January 8, 2002, the bank went forth with its case against the owner of the company Richard Forsgard, Forsgard trading itself and against Lakeshore (Smith). The Lakeshore, however, contends that it was not at all respo nsible for any such kind of issues. The stop payment order did not take away from the bank its right to recover the loss. Lakeshores point of view was that the stop payment order that had been issued by him was not against any legal act and thus, the bank could have easily recovered the money as and when the company Forsgard would have deposited the money to cover the overdrafts. According to the opinion of Lakeshore, he had issued a stop payment order that was very immediate, it was the very day, May 8, 2001, Lakeshore had deposited the check at the Mid Wisconsin Bank in its checking account, therefore the Mid Wisconsin should not have had any such issue regarding the act. Moreover, Lakshore states that the agreement that the company had with the bank did not allow it to render the credit immediately until the collection is final (Heberlein). Lakeshore says that the bank could place a hold on the check rather than giving immediate credit. However, the actual situation was that bank came to know about the stop payment order that had been issued by Lakeshore on 16 May, 2001. In between May 8 to May 16, many a times the account had been overdrawn, with a little amount left and the banks deduction from the account resulted in negative balance. Therefore, considering the situation and Lakeshores activities, Mid Wisconsin did take action against Lakeshore who was responsible mainly for the banks losses and also against the company (Bodenhorn, Howard). However, on the other hand the bank instead of issuing a case against both of the contenders should have waited easily and recovered the losses from the account of Forsgard when the company would have deposited money to cover the overdrafts. 2. The court did support the argument put forth by the Mid Wisconsin Bank. The court did put more emphasis upon the fact that the company and the Lakeshore had caused the banks losses. But at the same time, the court should have considered the fact that Forsgards account had been overdrawn more than twenty four times and thus, the bank could have recovered the its loss as and when Forsgard would have refilled its account (Ralston and James Cook.). The court should have taken into consideration the situation of both the parties, however, the decision of the court that Mid Wisconsin has the right to recover its losses from Lakeshore or from Forsgard was not totally incorrect. References: Ralston, Jeffrey L., and James Cook. "Impact of Prescribed Fire, Timber Removal, and the Seed Bank on Understory Plant Diversity and Canopy Cover in an Oak-Pine Barrens, Central Wisconsin, USA." Ecological Restoration 31.4 (2013): 395-411. Bodenhorn, Howard. Double Liability at Early American Banks. No. w21494. National Bureau of Economic Research, 2015. Heberlein, Thomas A. "Freudenburg and STARE at Wisconsin." William R. Freudenburg, A Life in Social Research. Emerald Group Publishing Limited, 2013. 27-34. Smith, Alice E. From Exploration to Statehood: History of Wisconsin. Vol. 1. Wisconsin Historical Society, 2013.