Miller Does the Payroll for Phoenix Company

question 37

Multiple Choice

Miller does the payroll for Phoenix Company.In between Adams and Bates,he inserts the name Appleton and makes out a weekly paycheck in that name.He keeps the check for himself,signing "Appleton" and cashing it at a local bank.Auditors discovered the fake payee many months later.May Phoenix require the bank to recredit?

• A) No,because of the holder rule
• B) No,because Miller is an Phoenix employee and the fictitious payee rule applies
• C) Yes,because the indorsement is forged
• D) Yes,because the check was,in effect,stolen