Cengage Advantage Books: Law for Business 19th Edition by John Ashcroft,Katherine Ashcroft,Martha Patterson

Exercise 24

Nelson and Martha Soto executed a promissory note and mortgage in favor of Parkway Bank and Trust Co. (Parkway) for the purchase of their apartment. The Sotos procured insurance for their home from State Farm Fire and Casualty Co. (State Farm). Their apartment was subsequently damaged by a fire. Brickman Companies LLC (Brickman) was hired to make repairs to the home, and the Sotos authorized State Farm to name Brickman as an additional payee in the settlement. State Farm issued checks payable to "NELSON SOTO MARTHA I. SOTO PARKWA Y BANK TRUST COMPANY ITS SUCCESSORS AND/OR ASSIGNS BRICKMAN CONSTRUCTION INC." and delivered the checks to Brickman. Brickman forged Parkway's indorsement and cashed the checks at JP Morgan Chase Bank. Two months later Parkway discovered the forgery and demanded replacement checks from State Farm. Was Parkway entitled to receive new checks from State Farm?