Bob, a guest in Jim's house, opens Jim's desk and writes a check to himself on Jim's checking account, forging Jim's signature. He indorses the check "Bob Saunders" and presents it to Jim's bank for payment. If the bank pays, can it collect from Jim's account?
A) Yes, because Bob is the real payee.
B) Yes, because Jim's name is on the check.
C) No, because bank should have known the signature is forged.
D) No, because Jim did not know of the check.

Question

Quizplus · Accepted Answer

The bank should have verified the signature on the check against Jim's signature on file. Since the signature was forged, the bank is responsible for the loss and cannot collect from Jim's account.

Bob, a Guest in Jim's House, Opens Jim's Desk and Writes