Michael Sykes, the president of Sykes Corp., hired Richard Amelung to handle

the company’s bookkeeping and deal with all of its vendors. Amelung entered

into an agreement with Eastern Metal Supply to help reduce Sykes’s debt to

Eastern. Whenever Sykes received a check, Amelung would sign it over to

Eastern and allow it to keep 30 percent of the check amount. On 28 checks that

totaled $200,000, Amelung indorsed the back as follows: “Sykes & Associates

Chapter 29 Transfers of Negotiable Instruments and Warranties of Parties 661

or Sykes Corporation, Richard Amelung.” Amelung then turned the checks

over to Eastern, and Eastern deposited them into its account at Barnett Bank.

Eastern would then write one of its checks to Sykes Corp. for the 70 percent

remaining from the checks. When Michael Sykes learned of the arrangement,

he demanded the return of the 30 percent from Barnett Bank, claiming that it

had paid over an unauthorized signature and that the indorsement was

restricted and had been violated by the deposit into Eastern’s account. What

type of indorsement did Amelung make? Did he have the authority to do so?

Should Sykes be reimbursed by Barnett? [Sykes Corp. v Eastern Metal Supply,

Inc., 659 So2d 475 (Fla App)]

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