While Wanda Snow was married to Cary Byron, Byron established an account with Shearson Lehman Hutton, Inc.—a securities brokerage firm— for Wanda’s son by a previous marriage. Wanda was designated as the account custodian. After Wanda and Cary had separated but before their divorce became final, Byron wrote a letter to Shearson instructing Shearson to close the account and send the proceeds (about $44,000) to a Florida bank account. Byron forged Wanda’s signature on the letter. Later, Byron called Shearson, identified himself, and asked that the proceeds be sent instead to Wanda Snow in care of Byron’s cousin in Connecticut. Byron obtained the check, forged Wanda’s indorsement on it, and deposited the check into his bank account, later applying the proceeds to his personal use. Wanda sued Byron, Shearson, and the bank to recover the funds. In her claim against the bank, Wanda alleged that the bank was liable for paying the check over a forged indorsement. The bank raised the “imposter rule” as a defense.
A) Is the imposter rule applicable to these circumstances?
B) Why or why not?