Court Opinion

ID: 7820709
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:53:49.583187+00
Date Added: 2024-06-11T16:30:43.922221
License: Public Domain

Conley Byrd, Justice, dissenting. The law under which appellant MBPXL Corporation seeks to hold liable the First National Bank of Siloam Springs is the Uniform Commercial Code, Ark. Stat. Ann. § 85-3-417(2) (Add. 1961), which provides: “(2) Any person who transfers an instrument and receives consideration warrants to his transferee and if the transfer is by indorsement to any subsequent holder who takes the instrument in good faith that: (b) all signatures are genuine or authorized; ...” In connection with liabilities for forgeries and unauthorized signatures, the Uniform Commercial Code, Ark. Stat. Ann. § 85-3-404 (Add. 1961) also provides: “(1) Any unauthorized signature is wholly inoperative as that of the person whose name is signed unless he ratifies it or is precluded from denying it; but it operates as the signature of the unauthorized signer in favor of any person who in good faith pays the instrument or takes it for value. (2) Any unauthorized signature may be ratified for all purposes of this Article [chapter]. Such ratification does not of itself affect any rights of the person ratifying against the actual signer.” In addition to the facts mentioned in the first paragraph of the majority opinion, MBPXL Corporation admitted that if it had checked with the First National Bank of Siloam Springs, when Nelsen presented his affidavit to it, that it would not have issued the second check to Nelsen. Now in view of the fact that a bank is protected under Ark. Stat. Ann. § 85-3-417(2), not only when the signature to a check is genuine but also when it is authorized, I fail to see how any person can issue a second check for an alleged forged check without first checking with the person who allegedly took the forged signature. The rights of a payee of a check against the maker should never be any greater than his rights against the person who allegedly forged the check. Nelsen by his written agreement with Boucher certainly by law ratified Boucher’s conduct in endorsing the check and thereafter had no right of action against Boucher for the alleged forgery. Nor does it matter that neither MBPXL Corporation nor its bank, the Chase Manhattan, were made parties to the interpleader action. If Nelsen prior to the receipt of the check had left written authorization with the First National Bank of Siloam Springs to cash the check of MBPXL Corporation upon its presentation by Boucher, and Nelsen had subsequently made the same affidavit to MBPXL Corporation and obtained a second check, no one would contend that the First National Bank of Siloam Springs would be liable to MBPXL Corporation because neither it nor its bank, the Chase Manhattan, were notified of the prior written authorization of Nelsen. What is the difference between written authorization to the bank here involved and any written authorization prior to receipt of the check, so long as the First National Bank holds such authorization before MBPXL Corporation was called upon to issue the second check? I submit that under the Uniform Commercial Code there should be no difference. For the reasons herein stated, I respectfully dissent. Harris, C.J., and Hickman, J., join in this dissent.