dissenting.
I respectfully dissent. I believe appellant converted the instruments payable to appellee Walter Jones because Mrs. Van Norman’s endorsement of Walter Jones’s name was unauthorized and, therefore, a forgery under Section 3-419(a) of the Uniform Commercial Code as adopted by our Legislature. 13 Pa.C.S. § 3419(a). On this difficult issue of first impression in Pennsylvania, the majority’s analysis seems to me to misconstrue our agency law, and to place an inappropriate emphasis on form over substance. Moreover, employment of the majority’s analysis leads to different results in two situations where the facts are substantially the same.
I believe Mrs. Van Norman’s endorsement of Walter Jones’s name was unauthorized because her authority to endorse Walter Jones’s name was limited to an endorsement “for deposit only.” There was no authority for an endorsement in blank, and it is not logical to imply it. Furthermore, there was no basis for apparent authority and no indicia sufficient to create an estoppel. Therefore, the in blank endorsement of Walter Jones’s name was unauthorized.
I
This case deals with the interpretation of Section 3419 of Pennsylvania’s Commercial Code. It states:
(a) Acts constituting conversion. — An instrument is converted when:
(1) a drawee to whom it is delivered for acceptance refuses to return it on demand;
(2) any person to whom it is delivered for payment refuses on demand either to pay or to return it; or
(3) it is paid on a forged [endorsement.
13 Pa.C.S. § 3419(a). Under this statute, if a bank cashes a check upon which the endorsement was forged, it is liable to the true owner for conversion. This follows logically from the definition of a holder, including a holder in due course, as one who receives an instrument endorsed to his order, or *586in blank. If there is no valid endorsement, there is no acceptance. Therefore, when a bank pays on a forged endorsement “even though made in good faith it is an exercise of dominion and control over the instrument inconsistent with the rights of the owner, and results in liability for conversion.” 13 Pa.C.S. § 3419 comment 3.
An unauthorized endorsement constitutes a forgery for the purpose of Section 3419(a)(3). This is an issue that has arisen in numerous jurisdictions which hold that the words “forged [endorsement” in Section 3419 were intended to include unauthorized endorsements.
The Code does not define forgery. It does define an unauthorized endorsement as an “[endorsement made without actual, implied or apparent authority and includes a forgery." 13 Pa.C.S. § 1201 (emphasis supplied). Furthermore, the Code states that “[a]ny unauthorized signature is wholly inoperative as that of the person whose name is signed unless he ratifies it or is precluded from denying it----” 13 Pa.C.S. § 3404(a). As with a forgery, if a bank pays an instrument on an unauthorized endorsement, then it has exercised “dominion and control over the instrument inconsistent with the rights of the owner.” 13 Pa.C.S. § 3419 comment 3. Both the objective of the drafters of the Code and the Code’s internal consistency are furthered by including unauthorized endorsements under Section 3419(a)(3).
All the courts in other jurisdictions that have dealt with this issue have held that an unauthorized endorsement is the same as a forgery for the purpose of Section 3-419 of the Uniform Commercial Code.1
The basic reasoning for this rule is well summarized in 6 R. Anderson, Uniform Commercial Code § 3 — 419:18(d) at 428 (3d ed. 1971):
*587If the instrument is paid on an unauthorized [endorsement, such act of payment is a conversion. That is to say, Code § 3-419 is to be interpreted so that payment under an unauthorized signature is a conversion even though the signature may not be a technical forgery, for the reason that with respect to the transfer of title there is no difference between a forgery and an unauthorized [e]ndorsement.
It is well accepted law, therefore, that a bank will be liable if it pays a check on either a forged or unauthorized endorsement. To this extent, the majority and I are in agreement. See Majority at 583.
II
The question presented in this case, however, is what constitutes an unauthorized endorsement. The Code defines an unauthorized endorsement as one made without actual, implied or apparent authority. 13 Pa.C.S. § 1201.
The Code expressly provides its terms can be supplemented by the underlying common law unless a particular provision expresses otherwise. 13 Pa.C.S. § 1103. The underlying common law in the area here involved is agency. In agency law, express and implied authority are different, but are both included in the more general term actual authority. However, it is important not to confuse implied with apparent authority.
Express authority exists where the principal directly states that an agent has the authority to perform a particular act on the principal’s behalf. Hartley v. Robena Local Union No. 6321, 2 Pa.D & C.2d 1, aff'd per curiam, 381 Pa. 430, 113 A.2d 239 (1955) (based on reasoning of Common Pleas Court opinion). Express authority is to be strictly construed. Fierst v. Commonwealth Land Title Insurance Co., 499 Pa. 68, 451 A.2d 674 (1982).
When an agent is given express authority, he also acquires, in addition, the implied authority to do all that is proper, necessary and ordinary to exercise the authority that has expressly been granted to him. Hartley v. Robena *588Local Union No. 6321, 2 Pa.D & C.2d at 15. Such implied authority is actual authority based on the premise that the principal reasonably would want the act done in order to accomplish the express purpose of the agency.
Apparent authority also flows from the conduct of the principal, but focuses on the reasonable expectations of the party with whom the agent deals. If the agent has not been granted express authority and no authority can be implied from the principal’s express statements, nevertheless, acts or omissions by the principal which lead a reasonably prudent person to believe such authority had been given to the agent, causes us to treat the matter as if authority had actually been granted. Capetola v. Orlando, 463 F.Supp. 498 (E.D.Pa.1978); Jennings v. Pittsburgh Mercantile Co., 414 Pa. 641, 202 A.2d 51 (1964). A doctrine similar to apparent authority is agency by estoppel. Where a principal intentionally or negligently causes a third party to rely on the belief that an agent has the authority to act on the principal’s behalf, the principal is estopped from contending that the agent had no such authority if the third party changed his position based on that belief. See, e.g., University Mktg. and Consulting, Inc. v. Hartford Life and Accident Ins. Co., 413 F.Supp. 1250 (E.D.Pa.1976). As this Court has noted, a principal who clothes his agent with apparent authority is estopped from denying such authority. Turnway Corp. v. Soffer, 461 Pa. 447, 336 A.2d 871 (1975). However, authority by estoppel is not precisely the same as apparent authority, and it can be applied where the formalities necessary for apparent authority do not exist if detrimental reliance has occurred. See Restatement (Second) of Agency § 8B (1958). Section 3404(a) of the Code seems to include estoppel by its use of the term “precluded.”
Applying these general rules of agency law to negotiable instruments, courts have held that where an agent is expressly authorized to endorse a principal’s name only in some restrictive form, such as, “for deposit only,” a blank endorsement is unauthorized if used for another purpose, *589and the agent’s receipt of proceeds under it is a conversion. See, e.g., Strong v. Missouri-Lincoln Trust Co., 263 S.W. 1038 (Mo.App.1924); Standard Steam Specialty Co. v. Corn Exchange Bank, 220 N.Y. 478, 116 N.E. 386 (1917). On the other hand, where an agent had the express authority to endorse in blank, even though the agent also had a duty to return the funds to the principal, we have held that such an endorsement was authorized, and therefore the bank was not liable for the agent’s subsequent misappropriation of the funds. Safe Deposit and Trust Co. v. Diamond National Bank, 194 Pa. 334, 44 A. 1064 (1900). See also Cluett v. Couture, 140 App.Div. 830, 125 N.Y.S. 813 (1910).
In Safe Deposit, supra, it was found that an administrator had authority to endorse a check as administrator, without restriction. The facts of that case also show that he had the authority to deposit the negotiated checks into his personal account. We reasoned that since he had actual authority to deposit the checks in his personal account, it was too burdensome to require the bank, without notice that he was using trust money, to reject checks drawn on his personal account.
Ill
In the instant case, the trial court, as fact-finder, found that Mrs. Van Norman was authorized to endorse Walter Jones’s name for the sole purpose of depositing the checks into his New York bank account. The trial court stated; “[t]he testimony leaves no doubt that [Walter Jones] authorized Mary Van Norman to accept his checks, act for him by affixing his name, and depositing the checks into his New York account.” Common Pleas slip op. at 5. In other words, the trial court found that Mrs. Van Norman was authorized to do whatever was necessary in order to deposit the checks into Walter Jones’s New York account.2 If the bank required Mrs. Van Norman to endorse Walter Jones’s *590name in order to deposit the checks, then implied authority to endorse had been granted.
The majority reasons that since Mrs. Van Norman had the necessarily implied authority to endorse the checks for the purpose of depositing the checks into his New York account, the endorsement could not be found unauthorized. It goes on to say:
it was not the signing of Jones’ [sic] name that was unauthorized. Rather, it was the cashing of the checks and the depositing of the proceeds into Van Normans’ personal account that constituted the wrongful acts. It is obvious that the misappropriation of the checks was unauthorized. The misappropriations, however, did not convert authorized endorsements into forgeries.
Majority at 580. In short, the majority’s analysis presumes that an agent who has the implied authority to endorse the *591principal’s name for a limited specific purpose is authorized to endorse for any purpose.
To ignore the limitations placed upon an agent creates absurd results. Assume that principals A and B each tell their agents to “do whatever is necessary to deposit a check in principal’s account.” Principal A’s bank requires the endorsement of the principal before depositing the check. Principal B’s bank does not require such an endorsement, but instead provides a stamp endorsement pursuant to 13 Pa.C.S. § 4205. Each agent endorses his principal’s name in blank and then his own name. Each then goes to the bank, and has the check deposited into his own account instead of his principal’s. In neither case does the bank make an attempt to determine whether the agent had actual authority to deposit the check entrusted to him into his own account.
Under the majority’s analysis, principal A’s bank would not be liable to other parties to the instrument since his agent would have had the implied authority to endorse the check for the purpose of placing it into his principal’s account. However, principal B’s bank would be liable since no endorsement would have been necessary to deposit the check. Therefore, while the principals, agents and banks acted in substantially the same manner, two completely different results would occur.
Express authority is to be strictly construed. Fierst v. Commonwealth Land Title Insurance Co., 499 Pa. 68, 451 A.2d 674 (1982). The trial court found that Mrs. Van Norman was expressly authorized to endorse for the sole purpose of depositing the checks into Walter Jones’s New York bank account.
There is no evidence that Walter Jones expressly authorized Mrs. Van Norman to endorse his name in blank and, since an endorsement in blank would not be necessary for her to fulfill the purpose of her agency, such actual authority should not be implied.
If Mrs. Van Norman had signed Walter Jones’s name along with the words “for deposit only,” it would have been *592sufficient to accomplish the purpose of her agency. Therefore, her actual implied authority should be limited to that extent. When she signed his name in blank, she exceeded this authority, and the endorsement was unauthorized. Unless the principal expressly authorizes his agent to endorse his name in blank, I cannot conclude that an endorsement in blank is actually authorized by implication when an endorsement “for deposit only” is the extent of the express authority given to the agent.
Postponing for the moment the problems this record poses in terms of endorsements which the Code would treat as if authorized under agency principles of apparent authority or estoppel this analysis of the implied actual authority of an agent expressly authorized to deposit checks in his principal’s account is consistent with the common law of agency. It also avoids the illogically disparate result of freeing one bank from liability and holding the other on actual implied authority when the principal’s acts and intent are substantially the same. These different results are illogical because actual authority, both express and implied, focuses on the reasonableness of the principal, whereas apparent authority and estoppel focus on that of the third party.
The majority cites no cases which hold that authority to endorse implies authority to endorse in blank. The authority for that proposition is discussed herein, at 593, infra. The cases the majority does cite are cited and discussed in an effort to demonstrate Superior Court’s error in relying on them in its decision in Levy v. First Pennsylvania Bank, 338 Pa.Superior Ct. 73, 487 A.2d 857 (1985), the case that Superior Court found controlling here. It is true that the cases the majority cites all involved an absence of any authority to endorse and are thus distinguishable from both Levy and the present case. However, they do not affirmatively support an implication of authority to receive funds by blank endorsement from express authority to deposit to the agent’s account. The majority does cite Bacher v. City Nat’l. Bank of Philadelphia, 347 Pa. 80, 31 A.2d 725 (1943), *593a 4-3 decision of this Court holding that the Uniform Fiduciary Act excuses a bank from inquiring into an agent’s authority to deal with an instrument. However, it concedes that Bacher is not controlling because appellant waived application of the Uniform Fiduciary Act.
It should be noted that one commentator does suggest that the authority to deposit bank checks includes implied authority to endorse in blank and receive the proceeds. Bailey, Brady on Bank Checks, at 505 (4th ed. 1969). The cases Professor Bailey cites to support this proposition are distinguishable on their facts by either apparent authority, estoppel by agency, or express authority to endorse in blank. Indeed, the text writer’s assumption that these cases depend on an actual authority necessarily implied for the purpose of accomplishing the agency is illogical. Blank endorsement is not necessary to accomplish the agency because a restrictive endorsement would accomplish its purpose to protect all parties.
Professor Bailey states:
Where, ... the agent is authorized to [e]ndorse checks in blank for the purpose of depositing them to the credit of the principal, or where he is authorized to [e]ndorse for that purpose, and his authority is not limited by any restriction as to the form of the [endorsement, his [e]ndorsement in blank will transfer good title to one who takes the check without notice that he is authorized to [e]ndorse for deposit only.
Bailey, Brady on Bank Checks, at 505 (4th ed. 1969).
This analysis puts the burden on the principal to expressly restrict and negate an authority unnecessary to the agency. I believe that approach reverses the usual rules of logical inference. As stated, the cases Professor Bailey cites to support his proposition are explicable on their facts by either apparent authority, estoppel by agency, or express authority to endorse in blank.
In Hartford Accident and Indemnity Co. v. Bear Butte Valley Bank, 63 S.D. 262, 257 N.W. 642 (1934), cited by Professor Bailey to support his proposition, the principal *594furnished an agent with an endorsement stamp that contained no restrictions. The court stated, that the principal is “estopped by the acts of the [principal] from denying the authority of [the agent].” Id. at 268, 257 N.W. at 645 (emphasis supplied). In Wedge Mines Co. v. Denver National Bank, 19 Colo.App. 182, 73 P. 873 (1903), the court found that the agent had the authority to endorse in blank. The court noted that it was true that the endorsement was to be used only for the purpose of depositing the checks into the principal’s account. But the court found that the bank should not be responsible for this limitation because the bank “had been advised by the previous course of dealing, through other checks, many in number, and aggregating a large sum, that the endorsement meant just as it read____” Id. at 187, 73 P. at 874 (emphasis supplied).
In other cases cited by Bailey, the courts found that the agent had the express authority to endorse in blank. In Palmer & Ray Dental Supply of Abilene, Inc. v. First National Bank of Abilene, 477 S.W.2d 954 (Tex.Civ.App., 1972), the agent was authorized to use a rubber stamp which stated “Palmer and Ray Dental Supply ...” (principal) without any restrictions. The agent was then instructed to deposit the checks into the bank. In a very short opinion, the court reasoned that this rubber stamp gave the agent the express authority to endorse in blank. Id. at 955. Finally, in Cluett v. Couture, 140 App.Div. 830, 125 N.Y.S. 813 (1910), the agent was authorized to endorse the principal’s checks and place the checks into the principal’s account. As in the present case, no particular form of endorsement was prescribed, but it was the custom of the agent to just sign the principal’s name in blank. The court specifically found that the facts did “not warrant a finding of implied authority” to transfer title to the checks. Id. at 832, 125 N.Y.S. at 815. The court reasoned, however, that actual authority existed (apparently express authority), because the agent’s “customary way was to write the name Cluett and Sons on the back without further words.” Id. The court apparently felt that the principal’s failure to restrict the endorsement when he became aware that the *595agent was endorsing the principal’s name in blank, gave the agent express authority to endorse in blank.3
Despite the absence of express or implied authority, the bank here could still seek protection under a theory of either apparent authority or agency by estoppel. These two theories should be addressed in several contexts. First, it must be decided whether a principal, who authorizes an agent to deposit checks, is estopped, as a matter of law from bringing an action against the bank if the agent signs the principal’s name in blank and misappropriates the proceeds. Secondly, it must be decided whether normal banking practice led First Valley Bank to reasonably believe that Mrs. Van Norman had authority to endorse in blank, which would protect the bank under a theory of apparent authority. Finally, it must be decided whether Walter Jones permitted Mrs. Van Norman to hold herself out as an agent authorized to endorse in blank, either intentionally or through negligence and, therefore, is estopped from bringing this action against the bank.
*596Here the bank’s action in permitting the unauthorized agent to obtain his principal’s funds was not caused by its reliance on any authority of the principal. See Robinson Protective Alarm Co. v. Bolger and Picker, 512 Pa. 116, 516 A.2d 299 (1986) (Hutchinson, J., concurring). Nevertheless, an argument can be developed that the policy of free negotiability underlying the rights given holders in due course, including banks dealing with checks, would be frustrated if we do not treat Mrs. Van Norman’s actions as if authorized as a matter of law under agency principles of apparent authority or estoppel. The Code, as noted, incorporates these principles into its definition of “authorized.” See 13 Pa.C.S. § 1201 (definition can be inferred through Code’s definition of “unauthorized”). I believe, however, the apparent authority argument in terms of unfair burden on the bank as third party fails in the face of other devices available to banks which they and other third parties dealing with checks can easily use to protect against conversion. These devices include restrictive endorsements in the absence of indicia of authority commonly acceptable in banking circles. See 13 Pa.C.S. § 3205. They also include signature cards, or other writings signed by the principal.
In addition, there are special indications on which a bank could premise the reliance necessary to work an estoppel or preclusion of the principal’s ability to defend for lack of actual or apparent authority. They include, for example, course of dealing by the principal, authority or apparent authority for the agent to receive cash, the agent’s possession and use of a signature stamp. These types of indicia explain on their facts the cases noted by Professor Bailey for the proposition that authority to deposit bank checks includes implied authority to endorse in blank and receive their proceeds. See at 594-596 for a discussion of the cases cited by Professor Bailey.
Furthermore, this does not place an undue burden on First Valley Bank in the present case. As the testimony at the trial shows, it decided to cash the first check because it trusted Mrs. Van Norman, not because of any evidence of *597her authority to endorse in blank. The record also shows that this is normal banking procedure. R.R. at 142(a). If the decision to cash a check is based mainly on the agent’s reputation, and there is no other evidence of authority, it is not unreasonable to place the risk of whether that agent actually has the authority to endorse in blank on the party who cashes the check against the agent’s endorsement. Banks would not have to change their banking practice, and could still seek relief from the agent on whose integrity they relied. I do not believe that our negotiable instruments law protects a bank from liability for honoring an agent’s endorsement solely because he had authority to deposit the principal’s check in the principal’s account.
Because the trial court relied on what I believe is a mistakenly broad and illogical view of this agent’s implied authority with respect to endorsements, it never reached the issues of whether normal banking practice led the bank to reasonably believe Mrs. Van Norman had apparent authority or whether the principal suffered her to obtain sufficient indicia of authority to estop the principal, Jones, from denying authority when the bank had relied on those indicia by paying the proceeds of the checks to Mrs. Van Norman. On this point, the present record is scanty. However, it does have testimony that in August or September of 1980 Walter Jones became aware that Mrs. Van Norman did not deposit two of the checks into his account. R.R. at 88(a). Yet he never approached the bank, and failed to bring an action for conversion for almost one year. In fact, he kept Mr. Van Norman in his employment until February, 1981. R.R. at 93(a). The trial court should determine whether this evidence, if believed, either alone or together with such other evidence as may be developed is sufficient to create an apparent authority or estoppel in favor of the bank.
For these reasons, I would remand the case to Common Pleas for further proceedings consistent with this opinion. Those proceedings could develop the record as necessary to determine whether apparent authority or estoppel precluded *598Walter Jones from holding the bank liable for conversion on grounds of forgery.
. See, e.g., Aetna Casualty and Surety Co. v. Hepler State Bank, 6 Kan.App.2d 543, 630 P.2d 721 (1981); Equipment Distributors, Inc. v. Charter Oak Bank and Trust Co., 34 Conn.Supp. 606, 379 A.2d 682 (1977). See also 6 R. Anderson, Uniform Commercial Code § 3-419: 40 at 439 (3d ed. 1984) and Annot., 23 A.L.R.4th 855 (1983). See also Top Crop Seed and Supply Co., Inc. v. Bank of Southwest Louisiana, 392 So.2d 738 (La.App.1980).
. While the trial court did not specifically find that Mrs. Van Norman was required to sign “for deposit only” when endorsing his name, there is no reason to conclude that the trial court found that Walter Jones expressly stated that Mrs. Van Norman had the authority to *590endorse his name in blank. On the contrary, the evidence shows that the express authority to endorse was limited to endorsing his name "for deposit only.” As noted, the trial court based its finding that the signature was authorized for the purpose of depositing the checks into his New York account on the testimony produced at trial. An exhaustive review of the testimony shows that at no point did any witness state that Mrs. Van Norman had the authority to endorse Walter Jones’s name in blank and then deposit the checks into his New York account. On the other hand, the following questions were asked by counsel for First Valley Bank:
Q. Now, I assume that you had a trust in both Mr. & Mrs. Van Norman, since you permitted Mrs. Van Norman to sign your name after the word, for deposit only?
R.R. at 114(a).
Q. Okay, Now, sir, it is true that you authorized Mrs. Van Norman to deposit checks in your account, in your account in New York; is that correct, in Manufacturers Hanover?
R.R. at 90(a). The only other statement that relates to the form of the endorsement granted to Mrs. Van Norman for the purpose of depositing in his New York account was made by Walter Jones himself.
A. I approached Mrs. Van Norman, and I said did you make that deposit. She said, yes. I said, how did you make it. She said, I marked it for deposit only and mailed it into New York. I said, there must be some mistake because it has your signature on it and my signature on the top and I never seen that check.
R.R. at 123(a).
Therefore, based on the testimony at trial, it would appear that Mrs. Van Norman was authorized only to endorse Walter Jones’s name "for deposit only.”
. The two other cases cited by Professor Bailey are also distinguishable. In Farmers Union Coop. Association v. Commercial State Bank, 187 Neb. 376, 191 N.W.2d 168 (1971), a general manager of a cooperative cashed checks made payable to the cooperative. The court found that the trial court did not commit an “error in declining to find or conclude that the [cooperative] had not authorized the transactions." Id. at 378, 191 N.W.2d at 170. The court did not say whether its holding was based on either express, implied, apparent authority, or agency by estoppel. It did note, however, that a signature card at the bank authorized withdrawals only by the “general manager” and certain employees in his name, and the court also stated that authority can be inferred. Id. at 377, 191 N.W.2d at 169-170. This would appear to be a reference to the basic justification of apparent authority or authority by estoppel.
In Mills v. Nassau Bank, 52 Misc. 243, 102 N.Y.S. 1119 (1906), an estate gave an agent a power of attorney, including the authority to receive debts and endorse checks. The court reasoned that granting the power of attorney included the power to cash checks and receive the cash from the bank. Although this case was based on a theory of implied authority, it is distinguishable since the “agent” was granted a general power of attorney.
The early cases often failed to distinguish between express authority, implied authority, apparent authority and estoppel. Indeed, those distinctions, clearly set out in both the original Restatement and Restatement (Second) of Agency, were induced from the early cases as a means of explaining and rationalizing their results.