Franklin National Bank v. Chase Manhattan Bank, N.A.

In 1968 Joel Shea applied to the Franklin National Bank (Franklin) for a loan, the proceeds of which he claimed to need to buy a car from his father-in-law, Donald MacMurray. Franklin approved the loan and issued its check in the amount of $3,004 payable to Joel Shea and Donald MacMurray.

*881The Franklin check, bearing “ signatures ” of Shea and Mac-Murray, was presented by Shea at the Chase Manhattan Bank (Chase), and Chase made payment to Shea. The parties have stipulated that the ‘ ‘ signature ’ ’ of MacMurray was not his, that it was placed there by someone without his authorization, and that…