Legal Environment 5th Edition by Jeffrey Beatty,Susan Samuelson

Exercise 5

Using her company's check-signing machine, Doris forged $150,000 of checks on the account of her employer, Winkie, Inc. One of Doris's jobs at the company was to prepare checks for the company president, Zach, to sign. He did not (1) look at the sequence of check numbers; (2) examine the monthly account statements; or (3) reconcile company records with bank statements. Winkie's bank, as a matter of policy, did not check indorsements on checks with a face value of less than $1,000. By accident, it paid a forged check that had not even been indorsed. Is the bank liable to Winkie for the forged checks?