The Bank/First Citizens Bank v. Citizens and Associates
Supreme Court of Tennessee
82 S.W.3d 259 (2002)
Citizens (defendant) gave checks payable to Allied Mortgage to branch manager Gray for delivery to the company's main office, but Gray forged Allied Mortgage's indorsement and deposited the checks into her own personal account at The Bank (plaintiff); the trial court found The Bank negligent for accepting corporate checks into a personal account and Citizens negligent for not confirming Gray's authorization, allocating 80% of the loss to Citizens and 20% to The Bank, affirmed by the court of appeals.
Whether a person whose failure to exercise ordinary care substantially contributes to a forged signature on an instrument may assert the forgery against a person who pays the instrument in good faith.