Bob, a guest in Jim's house, goes into Jim's desk and writes a check to himself on Jim's checking account, forging Jim's signature.He indorses the check "Bob" 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 and detected the forgery before making the payment. Therefore, it cannot collect from Jim's account due to its failure to identify the forged signature.

Bob, a Guest in Jim's House, Goes into Jim's Desk