Court Opinion

ID: 9517122
Source: CourtListenerOpinion
Date Created: 2023-08-07 00:04:33.648036+00
Date Added: 2024-06-11T09:43:28.215758
License: Public Domain

Nolan, J.
Edward Bauerband (Bauerband) and his wife (Michelle Bauerband) had been customers of Minster State Bank (Minster), an Ohio bank, for many years prior to the events in this case. Bauerband applied for a loan from Minster purportedly for himself and his wife. The loan officer knew both Bauerband and his wife. Minster mailed loan doc*832uments to Bauerband in Massachusetts, including a promissory note to be executed by Bauerband and his wife. Bauer-band forged his wife’s name on these documents. The signed note acknowledged falsely that Michelle had received a copy of the note. On return of these documents, Minster issued a bank customer’s check payable to the order of both Bauer-band and his wife and mailed it to their home in Massachusetts. Bauerband endorsed the check for himself, forged his wife’s name on the check, and deposited the check into a business account which he maintained at BayBank Middle-sex (BayBank). Bauerband’s wife had no knowledge of the loan transaction, the note, or the check.
Minster claims that BayBank violated the warranty provisions of G. L. c. 106, § 4-207 (2) (b) (1990 ed.). In response, BayBank urges that Bauerband was an impostor which exculpates BayBank under the provisions of G. L. c. 106, § 3-405 (1) (1990 ed.).1 Apart from the “impostor” statute, in the face of Bauerband’s forgery of his wife’s name on the check, BayBank would be liable for warranting to Minster that “all signatures are genuine or authorized” under G. L. c. 106, § 4-207 (2) (b).
The trial judge ruled on a motion for summary judgment that Bauerband was an impostor and ordered judgment for BayBank. Minster requested a report to the Appellate Division of the District Court Department which affirmed the judge’s ruling and dismissed the report. Minster appealed and we transferred the case to this court on our own motion.
The narrow issue in this case is whether the forged endorsement by Bauerband of his wife’s name makes him an impostor within the sweep of G. L. c. 106, § 3-405. He may be an impostor whether he acts face to face, by mail, or “otherwise.” We do not get much help from the Uniform Commercial Code as to the meaning of “impostor” in its *833commercial law context except that the official comment on § 3-405 (1) provides that “[i]mpostor” refers to “impersonation.” 2A U.L.A. 77, official comment 2 (Master ed. 1991).
We have not previously considered this question of who qualifies as an impostor2 and there is precious little case law under the Uniform Commercial Code to help us. “[Questions about who is and who is not an ‘impostor’ remain unanswered.” J.J. White & R.S. Summers, 1 Uniform Commercial Code § 16-4, at 796 (3d ed. 1988). What cases exist fall on both sides of the question.
Two New York opinions support the proposition that an impostor was involved in the case before us. See Franklin Nat’l Bank v. Shapiro, 7 U.C.C. Rep. Serv. (Callaghan) 317, 320-321 (N.Y. Sup. Ct. 1970) (depository bank not liable to drawer bank when wife procured loans by mail on the purported signature of herself and her husband); Fidelity & Deposit Co. v. Manufacturers Hanover Trust Co., 63 Misc. 2d 960, 964 (N.Y. Civ. Ct. 1970) (husband who presented withdrawal orders with wife’s forged signature on them was impostor).3
Cases to the contrary are not particularly persuasive for our purposes. Where a person purporting to obtain an automobile loan presented forged documents from an automobile dealer to the lender, courts have rejected the impostor rule as to an instrument payable to the person and the dealer and have treated the matter as simply invoking misrepresentations. See Valley Bank & Trust Co. v. Zions First Nat’l Bank, 656 P.2d 425, 427 (Utah 1982); East Gadsden Bank *834v. First City Nat’l Bank, 50 Ala. App. 576, 581 (1973).4 In Broward Bank v. Commercial Bank, 547 So. 2d 687, 689 (Fla. Dist. Ct. App. 1989) (two-to-one decision), the facts are substantively the same as in our case, and the court held that the husband was not an impostor. In reaching this conclusion, the court erroneously stated that to rule otherwise would mean that “virtually every forgery would also constitute an ‘impersonation.’ ” Id. The impersonation by forgery that is crucial to the impostor defense under § 3-405 (1) is one that is made to the drawer bank that issued the check and not any impersonation inherent in the forged endorsement presented to the collecting bank. See id. at 689, 690 (Letts, J., dissenting).
We obtain no insight from the law prior to the adoption of the Uniform Commercial Code. Section 3-405 (1) (a) “has no correlative section in the Uniform Negotiable Instruments Law but does represent, to some extent, case law developed prior to the drafting of the Code.” 2 Bender’s U.C.C. Service, Commercial Paper § 3.08[2], at 3-48 (1993). But § 3-405 (1) rejected pre-Code cases that distinguished between face-to-face impersonation and those accomplished by mail or over the telephone. See 2A U.L.A. 77, official comment 2 (Master ed. 1991); 2 Bender’s U.C.C. Service, supra at 3-50. Nor is there some apparent legislative purpose that can guide us effectively to an answer as to whether there was an impersonation by mail in this case. Proof of estoppel and relative negligence play no role in the application of § 3-405 (1) (a). If there was an impostor, equitable considerations are irrelevant.
The only inquiry is whether Bauerband, as an impostor, by the use of the mails or otherwise induced Minster to issue the check to him in the name of the payees. By his conduct in signing his wife’s name to the promissory note and submitting it to Minster, he was holding himself out as Michelle *835Bauerband in writing. In acknowledging that she will pay the note and that she had received a copy of it, Bauerband was purporting to be Michelle when he forged her name and sent the note to Minster. He was impersonating her, not in the literal “in person” sense, but “by use of the mails or otherwise,” as stated in § 3-405 (1) (a). In signing Michelle’s name to the note, Bauerband implicitly was indicating that he was Michelle. The fact that Bauerband also signed the note on his own behalf does not make him any less an impostor.5 Therefore, we affirm the order of the Appellate Division dismissing the report.

So ordered.

General Laws c. 106, § 3-405 (1990 ed.), in material part reads as follows: “(1) An indorsement by any person in the name of a named payee is effective if (a) an imposter 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 . . . .”

The passing reference to § 3-405 (1) (a) in Gordon v. State St. Bank & Trust Co., 361 Mass. 258, 261 (1972), is not informative for our purposes. The focus of that opinion was on the applicability of § 3-405 (1) (b). Id. at 261-262.

Treatise comment is not extensive on this subject. See 2 Bender’s U.C.C. Service, Commercial Paper § 3,08[2], at 3-50 (1993) (“if B writes to C saying that he or she is A and obtains an instrument payable to A, the instrument can be negotiated by anyone who signs A’s name as an indorsement”).

Massachusetts has not adopted the revision of § 3-404 which replaced § 3-405 (1) (a), (b). The revision does not concern the impostor rule as applied to the case before this court. See revised art. 3, § 3-404, 2 U.L.A. 19, 96 (Master ed. 1991).

A judgment by default was entered in the District Court as to Bauer-band. He is not a party to the appeal.