Fact Pattern 19-2

Multiple Choice

Fact Pattern 19-2
Ruth opens a checking account with State Bank.The bank agrees to accept responsibility for the difference between the original amount of any check that Ruth draws on the account and the amount actually paid on the item due to its unauthorized but undetected alteration.
-Refer to Fact Pattern 19-2.Ruth writes a check for $50 "payable to the order of Tom." Tom alters the amount to $5,000 and cashes the altered check at State Bank.State Bank files a suit against Ruth to recover $4,950.The court is most likely to rule that

A) Ruth does not have to pay because State Bank can afford the loss.
B) Ruth must pay $4,950 but she can recover the amount from Tom.
C) State Bank can recover $5,000 from Ruth.
D) State Bank is responsible for the amount under its agreement.