Fidelity & Deposit Co. Maryland v. Peoples

This action was commenced by plaintiff Fidelity & Deposit Company of Maryland, a foreign corporation, against defendant
Peoples Exchange Bank of Thorp, Wisconsin, for the recovery of $3,500 paid by plaintiff under a broker's blanket bond to Thorp
Finance Corporation on a check of the Finance Corporation forged by one of its employees who was covered by said bond. The
check was cashed by the State Bank of Elkhorn and sent to the defendant, the drawee bank, which honored it and charged the
proceeds against the account of the Finance Corporation. Defendant interpleaded and cross-complained against the State Bank
of Elkhorn. Prior to trial plaintiff settled with the defendant Thorp bank and assigned its cause of action to said bank against
the interpleaded defendant. From a judgment dismissing the cross-complaint, the Peoples Exchange Bank of Thorp appeals. On December 15, 1950 Wallace O. Lieding, an employee of the Thorp Finance Corporation, filled out a company check for $3,500
payable to one William E. Harrison and forged thereon the signature of Bruce B. Young, manager of the company's Elkhorn office.
He then forged the endorsement of William E. Harrison on the check, indorsed his own name 'W. O. Lieding' and cashed it at
the State Bank of Elkhorn. The check was drawn on the Peoples Exchange Bank of Thorp. The Elkhorn bank stamped the check with
its own endorsement as follows: