Business Law Today 8th Edition by Roger LeRoy Miller,Gaylord Jentz

Exercise 3

Eve Anderson works as an accounts payable clerk for Future Tech, Inc, a software development and marketing firm. Eve, who has worked for the firm for years, is authorized to sign company checks, on which Future Tech's name and address are printed.
To pay E-Systems, Inc., a Future Tech supplier, Eve issues a check in the amount due to E-Systems. The check is drawn on United First Bank. An E-Systems employee, with authorization, indorses the check and transfers it to E-Systems' financial institution, Western National Bank. Western National puts the check into the regular bank collection process. United First refuses to cash the check. In this situation, who will ultimately bear the loss? Could Future Tech be subject to criminal prosecution if United First refuses to cash the check?