Ambassador Financial Services, Inc. v. Indiana National Bank

SHEPARD, Chief Justice.

This case presents an issue of first impression for this Court: whether the “intended payee” defense is available under Indiana law to relieve a bank from its liability for paying a check over the forged endorsement of a payee. We hold that it is available.

Procedural History

Ambassador Financial Services, Inc. (“Ambassador”) filed suit against The Indiana National Bank (“INB”) and First Union National Bank (f/k/a First Georgia Bank) (“First Union”) over the acceptance and payment of three checks written on Ambassador’s INB account. Ambassador alleged that First Union…