Opinion ID: 344807
Heading Depth: 2
Heading Rank: 3

Heading: Placing Perini Within the Framework

Text: 51 We may now see how Perini's allegations and claims of error fit into the UCC scheme. Assume Quisenberry had included in his indorsements that he was signing for Quisenberry Contracting Co. or Southern Contracting Co. The case would become one involving only forged checks. 10 Accordingly, the drawee banks would be liable to the ostensible drawer, Perini, for improper payment. Perini would be precluded from asserting that liability, however, by its resolution authorizing payment of checks bearing the facsimile signature embossed by the machine or sufficiently similar signatures. Blocked from recourse against the drawees, Perini could reach back up the collection chain only against parties who had taken the checks in bad faith and therefore could not claim the protection of the § 3-418 codification of the Price v. Neal rule. 11 52 The court below, after concluding in effect that the indorsements were valid, reached just this result. Under the orders on appeal, Perini is essentially left with a trial on the issue of Habersham's bad faith in handling Perini's checks. Habersham will be able to assert Perini's alleged negligence as a defense, and Perini may press allegations of Habersham's negligence in response. 53 Perini claims, however, that Quisenberry's failure to indorse in a representative capacity makes the case one of unauthorized indorsements and should entitle the company to recover from any of the three defendant banks on a strict liability basis. In other words, given the happenstance that Quisenberry failed to add to his indorsement for Quisenberry Contracting Co., Perini would impose strict liability for improper payment, breach of title warranty, and conversion in what would otherwise be a relatively straightforward forged check case. 54 Perini vociferously urges that a parade of horribles will follow if this court affirms the trial court's disposition of the dispute over the handling of these checks. It must be recognized and emphasized, however, that any such dire predictions relate necessarily to the highly questionable manner in which Quisenberry was able to obtain and deposit these checks. The alleged inadequacy of the indorsement bears no relation to those suspicious circumstances. Had the indorsements been letter perfect, Perini would have been limited in equally suspicious circumstances to asserting Habersham's bad faith. 55 The Code does generally provide an ostensible drawer greater protection in such circumstances. For its own commercial reasons, however, Perini chose to employ a facsimile signature machine and agreed to forfeit its otherwise absolute right to have its drawees recredit its accounts for any payments of forged checks. Perini's inability to recover from the drawees on the basis of the forged drawer's signature cannot fuel in the slightest its arguments regarding the indorsements. Those arguments must stand or fall on their own. 56 In short, this case does not present the possibility of lowering one whit the UCC protection offered bank customers against losses from forged checks; it presents only the effect on a forged check case of a malefactor's failure to make an indorsement proper in form. 57 We must now consider that effect, which arises in two possible ways. First is the claim that there exists liability on the basis of the indorsements themselves. This surfaces in the statutory claims for improper payment, breach of warranty, and conversion considered next in Part III. Second, Perini claims that the indorsements' adequacy affects the common law liability of Habersham and Fulton on the forged drawer signatures. Those defendants avoid such liability, which would attach regardless of due care or good faith, only by virtue of the final payment rule. We consider in Part IV the claims that an improper chain of indorsement renders unavailable the protection of that rule.