Atlas Vegetable Exchange, Inc. v. Bank of America

Plaintiff, respondent and cross-appellant Atlas Vegetable Exchange (hereinafter Atlas) was engaged in farming, produce distribution, and selling, and was a depositor of defendant and appellant United California Bank (formerly California Bank) (hereinafter UCB) during all of the times involved in this litigation.

Defendant Mary Matsumura was employed by Atlas as an assistant bookkeeper during 1959 and 1960. In its normal course of business, Atlas purchased various items of merchandise and supplies, and issued approxi mately 10Ó checks per week in payment therefor. Mrs. Matsumura was directed to, prepare weekly checks to pay all outstanding obligations of Atlas on the bases of statements and invoices received from the company’s creditors. After Mrs. Matsumura drew the checks, she submitted them to the persons authorized to sign them for Atlas. The invoices and statements were presented with the checks for review prior to signing.

Between August 27, 1959 and February 4, 1960, Mrs. Matsumura prepared 60 checks, among others, ostensibly drawn in favor of creditors of Atlas, received the signatures of the persons authorized to sign them, but never delivered or sent, the…