If the drawee bank mistakenly paid a check with a forged or unauthorized drawer's signature on it:
A)the bank can recover the amount from the person whose name had been mentioned in the check albeit without authorization.
B)the bank can recover if it paid the check to a presenter who had taken the instrument in good faith and for value.
C)the bank cannot recover if it paid the check to a forger or unauthorized signer.
D)the bank cannot recover it if the presenter had taken the instrument in good faith and for value.

Question

Quizplus · Accepted Answer

If the drawee bank mistakenly paid a check over a stop-payment order,paid a check with a forged or unauthorized drawer's signature on it,or paid despite the lack of sufficient funds in the drawer's account to cover the check,the bank cannot recover if it paid the check to a presenter who had taken the instrument in good faith and for value.In that case,the drawee bank would have to pursue someone else,such as the forger or unauthorized signer,or seller whose goods proved to be defective.

If the Drawee Bank Mistakenly Paid a Check with a Forged