Martha draws a check payable to the order of Stella. Stella indorses the check to Karen. But Leslie steals the check from Karen, forges Karen's indorsement, and cashes the check at a liquor store.
-Who is liable to the check?

Question

Martha draws a check payable to the order of Stella. Stella indorses the check to Karen. But Leslie steals the check from Karen,  forges Karen's indorsement,  and cashes the check at a liquor store.
-Who is liable to the check?

Quizplus · Accepted Answer

The liquor store is liable because it accepted a check with a forged endorsement. Under the Uniform Commercial Code, a party that cashes a check with a forged endorsement is liable for the loss.

Martha Draws a Check Payable to the Order of Stella