Court Opinion

ID: 6903605
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:57:30.387549+00
Date Added: 2024-06-11T16:06:15.394387
License: Public Domain

HUTCHESON, Circuit Judge
(dissenting) .
While I have no quarrel with my brothers for adhering to their former opinion as the law of the case, I do háve a little one with them for having, in the former opinion, declared the law that way.
Whatever may be said for the wisdom, the justice, and the authority of the “im*273postor rule,” as applied in varying situations to private parties, and especially to the case where the drawer is an individual and personally delivers the paper to the impostor, I am of the opinion that neither the principle of the rule, nor the authorities relied upon for it, are controlling here. It is correctly laid down in the former opinion that, as to commercial paper issued by the United States, not local but federal law governs controversies arising with respect to it, and I am of the opinion that the Supreme Court cases on which the government relies require a contrary rule to that espoused by the majority.
Being of that opinion, I will not further labor the point here other than to say that I find no basis in the record for the finding of the trial court, the majority opinion quotes, that the United States, the drawer, expected the checks to be cashed by Bertha Smith or endorsed by anyone ether than the named payee, Beulah Mitchell Gibbs; none for the argument that though the bank endorsed the paper “prior endorsements guaranteed”, it should be relieved from the effect of that endorsement as that effect is declared in Clearfield Trust Co. v. United States, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838.
In stating, “It is the province of the Veterans’ Administration to identify persons claiming veterans’ allowances, and to pass on the validity of their claims, and cause checks to be delivered to them. The banks ■do not have the burden of correcting a mistake made or detecting a fraud committed,” the majority is so far right. When, however, it goes on to say that a bank, without knowing that the one who presents a government check for payment is the person named in the check, can guarantee that he is, without incurring any liability if he is not, is to state a proposition which, in my opinion, carries its own refutation on its face. It is true that “the banks do not have the burden of correcting a mistake made or detecting a fraud committed” if they do not assume it. It is not true, though, that they can voluntarily assume this burden, by guaranteeing as. genuine the signature of a person who presents himself as the payee named in the instrument, and then escape the consequences of that guarantee.
There is some reason in the “impostor rule” when it is applied to a transaction in which the drawer deals personally with the impostor and with the bank, and thus furnishes the identification on which the bank relies. It is a far cry, though, from this situation to the one we have here. Here the government, dealing through agents and by mail over great distances and issuing countless checks to named, but not otherwise identified, payees, in no may undertakes to identify the payee Po the bank, in no may misleads the bank into paying it, and guaranteeing the endorsement of the payee.
I feel that the public policy in favor of holding to their contract banks who take paper and guarantee prior endorsements in situations of this kind far outweighs the supposed, but in reality non-existent, equities here invoked in the bank’s favor, and so feeling, I respectfully dissent from a rule which allows a bank to make its own bed and then refuse to lie in it.