Court Opinion

ID: 9451184
Source: CourtListenerOpinion
Date Created: 2023-08-04 17:09:13.082354+00
Date Added: 2024-06-11T17:32:36.278365
License: Public Domain

MOORE, Circuit Judge
(dissenting):
The majority concede that the note signed by Victoria North as co-maker was “enforceable” and “complete and reg*311ular on its face.” Reliance for the result reached is placed upon the requirement that “The signatures of all parties to the note must be genuine,” 24 C.F.R. 201.2(a). The opinion merely concludes by its own fiat and without reference to other controlling sections of the applicable statutes or to New York decisions that the co-maker’s signature was not “genuine.”
There can be no factual dispute that the co-owner (with Eliza Findley) of the property to be improved was “Victoria North.” She was an actual person and for purposes of owning the property was Victoria North, one of the record title owners. Nor can there be any question that the signature on the note was the actual or “genuine” signature of the Victoria North to whom the Citibank intended to make the improvement loan. Query, whether the use by Victoria North of other or different names in other transactions with other persons makes her signature in a transaction wherein she was using the name Victoria North any less genuine ?
“Even though the name which was signed might originally have been assumed with other fraudulent purpose, the instrument would still not be false or forged if, in fact, it was made by the person who purported and was understood to be the maker.” International Union Bank v. National Surety Company, 245 N.Y. 368, 374, 157 N.E. 269, 271. “The name by which [the payee, here Victoria North] is designated is merely the tag by which the intended person may be identified.” Cohen v. Lincoln Savings Bank, 275 N.Y. 399, 405, 10 N.E. 2d 457, 460. Thus, “even though [the payee] induced the maker to deal with him through fraudulent misrepresentation as to his responsibility, character or name, [he] is the real payee and can by indorsement transfer title to the instrument.” Id. p. 406, 10 N.E.2d p. 460.
This case, however, should not be decided upon abstract theories of the meaning of the word “genuine.” Other FHA regulations create, control and limit the lender’s [insured’s] liability. Regulation 201.5(b) provides: “If after the loan is made, an insured who acted in good faith discovers any material misstatements * * * the eligibility of the note for insurance will not be affected.” When discovery was made by Citibank that another name, Mary Gwendolyn Rosita Morgan * had also been used by Victoria North, Citibank immediately complied with the requirement that “the insured shall promptly report such discovery to the Commissioner.” § 201.5(b). Also applicable is 24 C.F.R. 201.6(f) which provides:
“(f) Reliance on Credit Application. An insured acting in good faith may in the absence of information to the contrary, rely upon all statements of fact made by the borrower, which are called for by the borrower’s credit application, in determining the eligibility of the loan.”
The trial court based its decision almost exclusively on a plea of guilty entered by Mary Gwendolyn Rosita Morgan (Victoria North) in 1958, five years after the original note was executed and two years after Citibank notified FHA of the dual name situation saying “her plea of guilty in the Eastern District establishes conclusively that her intent was to defraud the United States by concealing the existence of a fixed obligation,” and although conceding that “her plea was with respect to the Credit Application and Credit Statement, the same intent must be assumed in the use of the name in signing as co-maker the note which followed the Credit Application and Credit Statement.” I can find no logical or factual basis for this assumption. Nor is there any legal ground for the conclusion that “since the signature of Victoria North was made with intent to defraud, it is not ‘genuine’ under Regulation 201.2 * * Regulation 201.5(b) must have been intended to cover just such a situation as is here presented, namely, an insured “who acted in good *312faith” (and there is no proof to the contrary) and who “after the loan is made” discovered “material misstatements.” But the use of the second name (Victoria North) since it was descriptive of the co-owner of the property might well not have been a misstatement at all. However, even were there fraudulent misrepresentation, Citibank was entitled to the umbrella of protection raised over it by Cohen v. Lincoln Savings Bank, supra, and International Union Bank v. National Surety Company, supra, in which fraudulent purpose was assumed.
For these reasons, I would reverse the order granting summary judgment in favor of plaintiff and grant summary judgment for the defendant, dismissing the complaint.

 The names “Gwen Morgan” and “Mary Elizabeth Morgan” also were used.