Wilson was employed as the office manager of Palmer & Ray Dental Supply of Abilene, Inc. Soon after an auditor discovered a discrepancy in the company’s inventory, Wilson confessed to cashing thirty-five checks that she was supposed to deposit on behalf of the company. Palmer & Ray Dental Supply used a rubber stamp to indorse checks. The stamp listed the company’s name and address but did not read “for deposit only.” The company’s president, James Ray, authorized Wilson to indorse checks with this stamp. Wilson cashed all of the checks at First National Bank.a. What are the arguments that First National Bank is liable to Palmer & Ray Dental Supply for converting the company’s funds by giving Wilson cash instead of depositing the checks into the company’s bank account? b. What are the arguments that First National Bank is not liable to Palmer & Ray Dental Supply? c. Explain who should prevail.
Wilson was employed as the office manager of Palmer & Ray Dental Supply of Abilene, Inc. Soon after an auditor discovered a discrepancy in the company’s inventory, Wilson confessed to cashing thirty-five checks that she was supposed to deposit on behalf of the company. Palmer & Ray Dental Supply used a rubber stamp to indorse checks. The stamp listed the company’s name and address but did not read “for deposit only.” The company’s president, James Ray, authorized Wilson to indorse checks with this stamp. Wilson cashed all of the checks at First National Bank.
a. What are the arguments that First National Bank is liable to Palmer & Ray Dental Supply for converting the company’s funds by giving Wilson cash instead of depositing the checks into the company’s bank account?
b. What are the arguments that First National Bank is not liable to Palmer & Ray Dental Supply?
c. Explain who should prevail.
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