Question

Clarice Rich was employed by the New York City Board of Education as a clerk. It was her duty to prepare requisitions for checks to be issued by the board, to prepare the checks, to have them signed by authorized personnel, and to send the checks to the recipients. In some instances, however, she kept the checks. Also, on a number of occasions Clarice prepared duplicate requisitions and checks, which she kept after she had the board sign. She then forged the indorsement of the named payees on the checks and cashed them at Chemical Bank, where the Board of Education maintained its account. After the board discovered the forgeries, it demanded that Chemical Bank credit its account for the amount of the forged checks.

1.  Is Chemical Bank required to credit the Board of Education's account as requested?  
2. Explain how you reached your conclusion and the legal principles which you relied upon.

Answer 1

This specific case should be judged on the basis of uniform commercial code chemical bank is not required to credit report of education account as requested but funds have to be recovered from Clarice Rich. She made fraudulent transactions using the check which was her responsibility and bank is not responsible for cashing the cheques how as Bank was doing their own job.
She acted as an agent for his firm to the bank which was totally normal for the bank to cash the cheque. According to the uniform commercial Court act section 3-302 and according to the Section 4 -406 motion should be granted as bank is not responsible to give funds to her.