Court Opinion

ID: 9643365
Source: CourtListenerOpinion
Date Created: 2023-08-22 20:27:13.845349+00
Date Added: 2024-06-11T18:11:00.015898
License: Public Domain

GREENHILL, Justice
(dissenting).
An impostor is one who, “by assuming a character or identity' not his own, fraudulently induces the drawer . . . of a check to draw ... a check to him in his assumed identity and to deliver the check to him believing him to be the person he pretends to be and the payee . of the check.” Annot., 81 A.L.R.2d 1365, 1367 (1962).1
A forger is a person who “without fraudulent representations to the drawer of a check that he is the intended payee of the check, comes into possession, by interception, theft, or the like, of a check in which a third person is named payee and obtains payment thereof by counterfeiting the payee’s indorsement” 81 A.L.R.2d at 1367.
As stated in the annotation, the distinguishing features between an impostor case and a forger case are:
“(1) either by face-to-face dealings or by correspondence the impostor fraudulently induces the drawer of the check to believe that he is the intended payee . . . whereas the forger does not make such representations to the drawer, (2)' the drawer consciously and intentionally delivers the check to the impostor personally or through an intermediary, believing the impostor to be the payee . . . whereas the drawer does not consciously or intentionally deliver the check to the forger, and (3) *376the impostor case involves a dual imposture — first to the drawer . who delivers the check or draft to the impostor, and then to the impostor’s indorsee, whereas the forger case involves only a single imposture — to the forger’s indorsee.” 81 A.L.R.2d at 1368.
Section 3-405 of the Uniform Commercial Code of 1958 states the rule more simply: “(1) An indorsement by any person in the name of a named payee is effective if (a) an impostor by use of the mails or otherwise has induced the maker or drawer to issue the instrument to him or his confederate in the name of the payee . . . .” Almost two-thirds of the states have enacted the Code, and it has been placed on the State Bar’s present legislative agenda by the Board of Directors of the State Bar of Texas. See 27 Texas Bar Journal 943 (Dec. 1964). This Section 3-405, above quoted, is in House Bill 9 and in Senate Bill 141 now before the Legislature.
As I understand this rule as applicable here, it says that “An indorsement by any person [Fredda] in the name of a named payee [Flora] is effective [to hold the drawer, Oak Cliff] if (a) an impostor [Fredda] by use of mails or otherwise [mails and telephone here], has induced the maker or drawer [Oak Cliff] to issue the instrument to him [Fredda] or his confederate in the name of the payee [Flora] . . . .” In my opinion, this is what happened, and the impostor rule is applicable. Inasmuch as the Uniform Commercial Code has been adopted by a great majority of the states and has been recommended for adoption in this state by our Bar, it would seem appropriate to me for this Court to follow the rule set out in the Code. It apparently has worked well in the other states.
The facts appear to me that Fredda did cause Oak Cliff to issue the check. She initiated and signed the draft herself which started the transaction. Fredda (not the Wichita Falls bank) was the impostor, though Fredda was able to get the Wichita Falls bank to do some of her work for her by subsequent telephone calls on her behalf. The Wichita Falls bank was acting for her in attempting to get Oak Cliff to release the money and to issue the check. The transaction was certainly not an independent venture of the Wichita Falls bank. The fact that the Wichita Falls bank may have been negligent (which has not yet been proved) does not keep this from being an impostor case. Whether that bank should be required to bear the responsibility by virtue of its participation or its own negligent acts does not determine the applicability of the impostor rule. That is another matter. In this regard, the case has been decided, without a determination of the facts, upon summary judgment.
It is recognized that for most of us, this is an unfamiliar and remote concept of the law. I repeat the facts one more time, as I see them, in order to attempt to make clear the applicability of the impostor rule to them:
Fredda Grisham signed a draft, using Flora Grisham’s name, which directed Oak Cliff to pay the balance of the account to the Wichita Falls bank. Just as if it had been face-to-face, by letter, or by phone, this was a representation by Fredda Gris-ham to Oak Cliff that she was Flora Gris-ham. Fredda was an impostor. Oak Cliff did not honor the draft as such but prepared a check payable to “Flora Grisham,. Independent Executrix of Estate of I. T.. Grisham.” Oak Cliff was thus induced to. draw that check because it believed that the-impostor was Flora Grisham. As one court, put it, Oak Cliff did not know Fredda was not Flora. Uriola v. Twin Falls Bank & Trust Co., 37 Idaho 332, 215 P. 1080 (1923). The check was forwarded to a Dallas bank with instructions not to release it until the passbook was obtained. This amounted to a conscious and intentional delivery of the check to the impostor through an intermediary. See Gen. Am. Life Ins. Co. v. Nat’l Bank of Commerce, supra; 81 A.L.R.2d at 1381-83, 1388. The delivery was completed. *377when Oak Cliff believed or accepted Fredda Grisham’s representation, as related by the Wichita Falls bank, that the passbook was lost. Upon indorsement of the check and receipt of the proceeds, she and the case came within the impostor rule announced in the A.L.R. annotation and the Uniform Commercial Code.
There are a few cases in which, although the facts fit the requirements of the impostor rule, courts have held that the one who •cashes or pays the check [the Wichita Falls bank] must bear the loss. See cases cited •81 A.L.R.2d at 1392-95. The rationale of these cases is that the drawer [Oak Cliff] was not negligent, but the drawee or person who cashed the check [the Wichita Falls bank] was negligent to such an extent that the drawer should be relieved of liability. In the case at bar, allegations of negligence are made by each party against the other. In its reply to Oak Cliff’s request for admissions, the Wichita Falls bank denied that its officer, J. R. Cummings, represented to Oak Cliff that the passbook had been lost, and, claiming to know the facts, induced Oak Cliff to waive the demand that such passbook be surrendered. If negligence is a factor, then Oak Cliff has the burden of proving that the Wichita Falls bank owed it some duty which was breached, and that this conduct was the proximate cause of the loss.
I dissent on the basis that this is an impostor case and should be treated as such. Once that has been decided (and the majority opinion declines to do so), then the decision would have to be made as to whether (1) the impostor rule would simply be applied as a rule of negotiability, and Oak Cliff could not recover, or (2) whether, even assuming the impostor rule) the cause should be remanded for a trial on the facts with regard to negligence of the Wichita Falls bank, and perhaps the Oak Cliff bank, under the cases discussed just above. This latter course appears to be a minority view, but from the standpoint of justice it has a good deal to recommend it. The Court would have to choose between a fixed and simple rule of negotiable instruments in aid of dispatch of business and commerce, or attempt to do justice in the individual case. Since the Court does not reach the problem, it is unnecessary to express any opinion thereon.
CALVERT, C. J., joins in this dissent.

. In the interest of brevity, this dissent ■will not contain a detailed analysis of the cases, but will discuss the general rules and direct attention to the excellent A. L.R. annotation, gee Employers Casualty Co. v. Nat’l Bank of Commerce, 140 Tex. 113, 166 g.W.2d 691 (1942); First Nat’l Bank v. Whitaker, 136 Tex. 117, 147 S.W.2d 1074 (1941); Gen.Am.Life Ins. Co. v. Nat’l Bank of Commerce, 348 S.W.2d 393 (Tex.Civ.App.1961, n.r.e.).