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

Exercise 5

Barnes was the payee of a $5,088.70 check drawn by Portland Cement Association. Barnes indorsed the check "J.Y. Barnes, for deposit only" and placed the check for mailing in a cooperative mailing rack in the lobby of a building in Denver. The envelope containing the check was stolen by Woodward, who passed himself off as Barnes and opened a checking account in Cherry Creek National Bank in the name of Jack Y. Barnes. Woodward deposited the check into the account, and the check was paid by Cherry Creek. Barnes then sued Cherry Creek to recover the money, claiming that the check had been restrictively indorsed and could be paid only to the real Jack Barnes. Will Barnes succeed? (Barnes v. Cherry Creek National Bank of Denver, Colo. 432P.2d 471)