Cole was supervisor of the shipping department of Machine Mfg., Inc. In February, Cole found herself in need of funds and, at the end of that month, submitted to Ames, the treasurer of the corporation, a payroll listing that showed as an employee, among others, ‘‘Ben Day,'' to whom was allegedly owed $800 for services rendered during February.

Actually, there was no employee named Day. Relying upon the word of Cole, Ames drew and delivered to her a series of corporate payroll checks, drawn upon the corporate account in the Capital Bank, one of which was made payable to the order of ‘‘Ben Day'' for $800. Cole took the check, indorsed on its back ‘‘Ben Day,'' cashed it at the Capital Bank, and pocketed the proceeds. She repeated the same procedure at the end of March, April, and May. In mid-June, Machine Mfg., Inc., learned of Cole's fraudulent conduct, fired her, and brought an appropriate action against Capital Bank, seeking a judgment for $3,200. Is Cole's signature effective against Machine Mfg., Inc.? Explain.