Curt issues a check payable to Discount Mart. Ethel, Discount's cashier, forges the store's indorsement and deposits the check in her bank account. Curt's bank, Farmers Bank, pays the check. Curt can recover from
A) Ethel, but not the bank that paid Ethel .
B) the bank that paid Ethel, which cannot recover from Ethel .
C) the bank that paid Ethel, which can recover from Ethel .
D) neither Ethel nor the bank that paid Ethel .

Question

Quizplus · Accepted Answer

Curt can recover from the bank that paid Ethel because the bank is liable for paying on a forged indorsement. The bank can then seek recovery from Ethel, who committed the forgery.

Curt Issues a Check Payable to Discount Mart