Federal Insurance Company, Cross-Appellee v. Ncnb National Bank of North Carolina, Cross-Appellant, Ncnb National Bank of Florida

FRIEDMAN, Senior Circuit Judge:

This diversity damage suit grew out of a scheme by which a corporate employee em bezzled substantial amounts from her employer by obtaining payment of corporate checks that had not been properly signed, and converting the proceeds. After the embezzlement was discovered, and the banks denied liability for the payments, the employer’s insurance company paid the losses. The insurance company as the sub-rogee and assignee of the employer then brought this suit against the banks. The district court held that the banks were negligent in paying the checks, but that…