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Part Four Case Study
Chino Commercial Bank v. Brian D. Peters
Questions for Analysis
1. Stare decisis prevails in this case but not until after both the plaintiff and the defendant make a
critical error by misidentifying the proper law to apply in the case. Both parties identified the cases of
Pac. Coast Cheese, Inc. v. Sec.-First Nat. Bk. (1955) 45 Cal.2d 75, Basch v. Bank of America (1943) 22
2. The Uniform Commercial Code is a uniform set of provisions put together to deal with most
every commercial transaction imaginable. The goal of the project was to cross state lines, making all
3. UCC Section 3-406 say that the party that contributes to a forgery by failing to use ordinary care
to prevent that alteration will not be able to point to the alteration (again, let’s call it what it really is . . .
a forgery) as an argument against party that relied on the forgery as if it were authentic and then paid
4. A forgery is a fraudulent making or altering of a writing. A payee is a person to whom a draft is
payable. An overdraft involves a bank paying out more than a customer has in his or her account.
5. The court in Chino Commercial Bank v. Brian D. Peters used the “prevailing commercial
standards” test. The court first quotes the California Commercial Code and then applies the test to the
case in the following way: The California Uniform Commercial Code defines “‘[o]rdinary care’ in the
case of a person engaged in business [as] observance of reasonable commercial standards, prevailing in
(7).)
There was absolutely no evidence that prevailing commercial standards required the Bank to
question the wire transfers. The Bank even presented some evidence that it acted in accordance with
prevailing commercial standards (although that evidence went largely to its acceptance of the checks
7. The court’s definition of “good faith” matches up with the definition used in Any Kinds Checks
Cashed, Inc. v. Talcott. In Chino the court says that: “’Good faith’ simply means that the Bank acted
honestly and in accordance with ‘reasonable commercial standards of fair dealing.’” In Any Kinds
8. Chino Commercial Bank wants the money it paid out because of the alterations in the check.
9. In Chino Commercial Bank v. Brian D. Peters the bank followed proper commercial standards
in the industry. In Maine Family Federal Credit Union v. Sun Life Assurance Company of
10. Whether these the two cases, Chino Commercial Bank v. Brian D. Peters and Maine Family
Federal Credit Union v. Sun Life Assurance Company of Canada, reinforce the idea that the law
END of Part Four End Case
