Wachovia Bank, N.A. v. Foster Bancshares, Inc.

A customer, Choi, deposited a $133,000 check at Foster Bank (defendant), drawn on Wachovia (plaintiff) by MediaEdge naming Choi as payee-unusual given her account history. Wachovia paid the check and debited MediaEdge's account; Choi withdrew the funds and disappeared. It was later unclear whether the check had been altered to list Choi as payee or an entirely new check had been forged, and the original check had been destroyed. Wachovia sued Foster for indemnification against a possible suit by MediaEdge.

Whether a drawee bank that pays a presented check assumes the risk that the drawer's name is forged, while the presenting bank assumes the risk that the check has been altered since issuance.