City Bank issues to Dave a cashier's check. Evan steals the check, forges Dave's signature, adds his own signature, and cashes it at First County Bank, which obtains payment from City. Dave discovers the theft and ob?tains a replacement check from City, which sues First. The court will likely rule in favor of

Question

Quizplus · Accepted Answer

First County Bank breached the presentment warranty that the check has no unauthorized endorsements on it. The bank is responsible for verifying that the signature on the check and the identity of the presenter match. Since the check was stolen and the signature was forged, the bank did not fulfill its obligation to ensure that the check was properly endorsed. City can recover the funds from First County Bank as a result of this breach.

City Bank Issues to Dave a Cashier's Check