Bailey was an attorney in Sanford, Florida. The Benjamins, a married couple, hired Bailey to represent them on the purchase of a home. Before closing, Bailey informed the couple of payments that they were required to make by check at the closing. Among the required payments the attorney told the couple to make were a check for $850 to George James and a check for $310 to Sharon Young. The attorney explained that the check to George James was for a survey of the property and the check to Sharon Lee was for a termite inspection that the couple had authorized.

The checks were issued and taken by Bailey who promised to deliver them. Bailey did not, however, deliver them. Instead, Bailey forged the endorsements of the respective payees and cashed the checks. When Bailey was later arrested on a similar matter, the couple learned what had happened.

The couple made a claim against its bank for reimbursement, claiming the bank was not authorized to pay these checks because they had not been effectively negotiated to the bank. When the facts came to light, no person named George James had done a survey on the property, but the termite inspection had been done by Sharon Young. Using IRAC Decide both cases.