Romano's Carryout, Inc. v. P.F. Chang's China Bistro, Inc.
964 N.E.2d 1102
Ohio Ct. App.2011Background
- Romano’s Carryout Cashes payroll checks for customers and collected a 1% fee for check cashing.
- Garcia, an employee of PF Chang’s, indorsed a PF Chang’s payroll check at Romano’s and received $776.81 net of the fee.
- Bank of America dishonored the check after PF Chang’s ordered a stop payment.
- Romano’s sued PF Chang’s under R.C. 1303.54 seeking payment of the dishonored check to Romano’s as a holder.
- Arsalane testified that he knew Garcia and had previously cashed many checks for him, including PF Chang’s checks.
- Romano’s presented checks showing no Romano’s stamp prior to the issue check, and Arsalane admitted the issue check was the first PF Chang’s check he cashed for Garcia at Romano’s.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether forged indorsement prevents holder status | Romano's contends it is the holder and entitled to payment. | Forgery and misspelled signature undermines validity of indorsement, negating holder status. | Misspelled signature supported by credible evidence showed forged indorsement; Romano’s not a holder. |
| Whether a stop-payment affects the obligation to pay the holder | Drawer’s stop payment does not erase obligation to holder. | Stop payment extinguishes liability to the payee only, not the holder. | Stop payment does not negate the drawer’s obligation; however, holder status is required to recover. |
Key Cases Cited
- Myers v. Garson, 66 Ohio St.3d 610 (1993) (presumption of findings on manifest-weight review)
- State v. Wilson, 113 Ohio St.3d 382 (2007) (credibility of witnesses; defer to trial court)
- Seasons Coal Co. v. Cleveland, 10 Ohio St.3d 77 (1984) (standard of review for manifest weight)
- Morris v. Ohio Cas. Ins. Co., 35 Ohio St.3d 45 (1988) (unauthorized signature not an indorsement)
- Arcanum Natl. Bank v. Hessler, 69 Ohio St.2d 549 (1982) (holder status and defenses; due course concept relevance)
- Gabbard v. Golden Years Nursing Home (No. 2), Inc., 94 Ohio App.3d 430 (1994) (holder status where forged endorsements nullify transfer)