Desert Builders was a local builder. It had a checking account at Orion Bank. Desert's manager, Peter, examined bills submitted by subcontractors for labor and materials. He instructed the bookkeeper which bills were approved and which to pay. After the checks were signed by Desert's treasurer, Peter picked them up for delivery. Instead of delivering some of the checks, he forged the signatures of the payees and cashed the checks. The drawee bank then debited Desert's account for the amount of the checks. Desert claimed that this was improper and sued the bank for the amount of the checks. The bank claimed that it was protected by the imposter rule.
Will Orion Bank be successful? Why or why not?
Does Peter's employee status at Desert influence the case in any way? Why or why not?