James A. Wagner


The holding in Cooper v. Union Bank' is based on the court's interpretation of Uniform Commercial Code (hereinafter Code) section 3-4192 and the application of this section to collecting and payor banks.

Joseph Stell brought an action in conversion s as payee and true owner to recover funds paid by defendant banks on checks cashed by Stell's secretary. The secretary forged plaintiff's indorsement on twenty-nine checks over a sixteen-month period, cashing the checks at both payor and collcting banks. In an opinion affirmed by the appellate court the trial court held that the defendant banks qualified as representatives, acted in good faith, in accordance with reasonable commercial standards, and had no proceeds remaining in their hands. After disallowing recovery on certain checks due to Stell's negligent supervision of his secretary, the court allowed the defendant banks, both payor and collecting, a complete defense under California Commercial Code section 3419(3).

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