Cengage Advantage Books: Business Law 9th Edition by Arnold Goldman ,William Sigismond

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Wilson, office manager of P R Dental Supply Company, was confronted with a discrepancy in her company's inventory by an auditor reviewing the company's books. She had cashed several checks and kept the money for her own personal use, when actually the checks should have been deposited to P R Dental Supply Company. The company president had given Mrs. Wilson the authority to indorse checks on the company's behalf and then deposit them into the company account at the bank. Mrs. Wilson did use a rubber stamp with the company name on it, but the stamp was actually a blank indorsement rather than a restrictive indorsement containing the words "For Deposit Only." P R Dental claimed that the bank should not have given Wilson the cash from the checks since she used a company stamp. Was the bank acting illegally by giving Wilson the money? (Palmer Ray Dental Supply of Abilene v. First National Bank, 477 S.W.2d 954-a Texas Case)