In Abbott v. Liberty National Bank, Abbott obtained a money judgment against Scotty Norwood and had a writ of garnishment served on Liberty National Bank, who had an account owned by Scotty’s wife, in an attempt to collect on that judgment. No. 06-12-00020-CV, 2013 Tex. App. LEXIS 961 (Tex. App.—Texarkana February 21, 2013, no pet. history). Liberty denied having any of Scotty's accounts or property and did not freeze the wife’s account. Subsequently, Scotty and his wife, Treda, filed bankruptcy. Abbott later sued Liberty seeking a declaratory judgment that Scotty was also Liberty's customer at the time of the garnishment that Liberty should have frozen Treda's account. Before the garnishment action, Liberty had noticed that Scotty occasionally came to the bank and cashed some checks drawn from other banks. Under his endorsement of those checks, he wrote Treda’s account number. Scotty, however, had no account at Liberty. In order to protect the bank from future check cashing by Scotty, Liberty drafted, and Treda signed, a letter agreement giving Liberty recourse against Treda's account if any such check Scotty cashed at Liberty was ever returned. After that agreement was in place, Scotty cashed numerous checks payable to himself at the bank.

On appeal, Abbott contended that the trial court erred in granting a directed verdict for Liberty because Scotty was also a customer at the bank. The court noted that a signature card for a bank account is a type of contract. The name on an account is prima facie proof of ownership of the account. A bank is not required to inquire into ownership of the funds deposited. A bank is entitled to rely on its deposit agreement when determining to whom it is indebted. The court noted that Liberty did not have an account for Scotty, but it did have an account for Treda. It held that Treda's accounts did not become Scotty's account simply because Scotty deposited funds into them and affirmed the judgment for the bank.