Valley Bank v. Monarch Investment Co.

JOHNSON, Justice.

This is a tale of two checks. The first check was issued by the purchasers of a stolen backhoe to the scoundrel who sold them the backhoe. The scoundrel endorsed the check without authority and cashed it at the purchasers’ bank. The second check was a cashier’s check issued by the bank in exchange for the first check. The second check was used by the scoundrel to buy some gold coins from a coin company.

The primary questions presented and our answers are:

1. Was the bank that cashed the first check based on the scoundrel’s unauthorized indorsement entitled to charge the account…