Denn v. First State Bank of Spring Lake Park

WAHL, Justice.

This appeal raises the issue of whether a depositary bank 1 which collected and paid out on two checks bearing forged indorse-ments is absolved from liability to the payee of the checks under Minn.Stat. § 336.3-419(3) (1980) 2 when it acted in good faith and in accordance with reasonable commercial standards. We hold that it is.

The facts are straightforward. Plaintiff Edward Denn, the sole shareholder of Advance Foam of Minnesota, brought an action against the First State Bank of Spring Lake Park (Spring Lake) and Northfield National Bank (Northfield) for conversion of two…