A-37342, AUGUST 5, 1931, 11 COMP. GEN. 48

A-37342: Aug 5, 1931

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CHECKS - INDORSEMENTS - FORGERIES THE GENERAL RULE THAT WHEN THE GOVERNMENT IN ISSUING AND DELIVERING A CHECK DEALS DIRECTLY BY CORRESPONDENCE OR OTHERWISE WITH THE PARTICULAR PERSON TO WHOM THE CHECK IS ISSUED AND DELIVERED. IS NOT FOR APPLICATION WHERE IT APPEARS THAT THE IMPOSTOR MADE NO REPRESENTATIONS TO THE INDORSER WHO CASHED THE CHECK OTHER THAN THE INFERENCE WHICH MIGHT BE DRAWN FROM HIS POSSESSION OF THE INDORSED CHECK. THAT SAID INDORSER MADE NO ATTEMPT TO ASCERTAIN WHETHER THE PERSON PRESENTING THE CHECK WAS THE PERSON NAMED AS THE PAYEE OF THE CHECK. IS APPLICABLE THERETO. THAT THE CHECK WAS MAILED TO THE CLARK STREET ADDRESS AND WAS INTERCEPTED BY RYAN. THAT THE CHECK WAS ACCEPTED IN PAYMENT OF THE BILL IN QUESTION AND THE BALANCE OF $520.52.

A-37342, AUGUST 5, 1931, 11 COMP. GEN. 48

CHECKS - INDORSEMENTS - FORGERIES THE GENERAL RULE THAT WHEN THE GOVERNMENT IN ISSUING AND DELIVERING A CHECK DEALS DIRECTLY BY CORRESPONDENCE OR OTHERWISE WITH THE PARTICULAR PERSON TO WHOM THE CHECK IS ISSUED AND DELIVERED, THOUGH DECEIVED AS TO HIS IDENTITY, RECLAMATION CAN NOT BE AFFECTED FROM THE INDORSER WHO ACCEPTED THE CHECK FROM SUCH PERSON FOR VALUE WITHOUT NOTICE OF HIS LACK OF TITLE TO THE CHECK, IS NOT FOR APPLICATION WHERE IT APPEARS THAT THE IMPOSTOR MADE NO REPRESENTATIONS TO THE INDORSER WHO CASHED THE CHECK OTHER THAN THE INFERENCE WHICH MIGHT BE DRAWN FROM HIS POSSESSION OF THE INDORSED CHECK, AND THAT SAID INDORSER MADE NO ATTEMPT TO ASCERTAIN WHETHER THE PERSON PRESENTING THE CHECK WAS THE PERSON NAMED AS THE PAYEE OF THE CHECK.

COMPTROLLER GENERAL MCCARL TO THE TREASURER OF THE UNITED STATES, AUGUST 5, 1931:

THERE HAS BEEN RECEIVED YOUR LETTER OF JUNE 9, 1931, AWS-C, RETURNING ADJUSTED-SERVICE CERTIFICATE LOAN CHECK NO. 108528, DRAWN MARCH 23, 1931, IN THE AMOUNT OF $575.14 IN FAVOR OF SHERMAN LORIMER MCCLUSKEY, AND REQUESTING TO BE ADVISED WHETHER THE DECISION IN THE PHILIP V. WALTERS CASE, A-29959, IS APPLICABLE THERETO.

IT APPEARS FROM THE SECRET SERVICE OPERATIVE'S REPORT THAT THE PAYEE OF THE CHECK IN QUESTION, HIS WIFE, AND CHARLES BOIVIN, ALIAS JAMES E. RYAN, ROOMED AT THE HOME OF MRS. MARY POWELL, 141 CLARK STREET, CAMBRIDGE, MASS.; THAT RYAN SECURED INFORMATION NECESSARY FOR APPLICATION FOR A LOAN UNDER THE ADJUSTED-SERVICE CERTIFICATE ISSUED TO MCCLUSKEY FROM PAPERS IN THE PAYEE'S ROOM AND FILED SUCH APPLICATION IN THE NAME OF SAID PAYEE; THAT THE CHECK WAS MAILED TO THE CLARK STREET ADDRESS AND WAS INTERCEPTED BY RYAN; THAT RYAN OWED MRS. POWELL CONSIDERABLE MONEY FOR BACK BOARD; THAT RYAN ACCOMPANIED BY MRS. POWELL PRESENTED THE CHECK, WHICH HAD BEEN PREVIOUSLY INDORSED IN THE NAME OF THE PAYEE, AT THE MORGAN FURNITURE CO., SECOND INDORSER, IN PAYMENT OF A BILL OWED AT THAT STORE BY MRS. ELIZABETH TAYLOR, THAT BEING THE NAME OF MRS. POWELL BEFORE HER REMARRIAGE; THAT THE CHECK WAS ACCEPTED IN PAYMENT OF THE BILL IN QUESTION AND THE BALANCE OF $520.52, OF THE PROCEEDS THEREOF WAS TURNED OVER TO RYAN; THAT WHEN THE RIGHTFUL PAYEE FILED APPLICATION FOR A LOAN UNDER HIS ADJUSTED SERVICE CERTIFICATE THE VETERANS' BUREAU ADVISED HIM THAT THE CHECK HAD ALREADY BEEN ISSUED AND THAT SAID CHECK HAD BEEN PAID BY THE TREASURER OF THE UNITED STATES; AND THAT RYAN, ON BEING ARRESTED AND ACCUSED, ADMITTED HE HAD FILED APPLICATION FOR THE CHECK IN THE NAME OF THE PAYEE, HAD FORGED PAYEE'S NAME THEREON, AND HAD CASHED SAID CHECK AT THE MORGAN FURNITURE CO. WHEN QUESTIONED BY THE SECRET SERVICE OPERATIVE, RYAN INSISTED THAT MRS. POWELL DID NOT SEE THE NAME ON THE CHECK, AND WHEN MRS. POWELL WAS QUESTIONED BY THE SECRET SERVICE OPERATIVE SHE STATED, ALSO, THAT SHE HAD NOT SEEN NOR HAD NOT KNOWN WHAT NAME WAS ON THE CHECK. WHILE THE SALESMAN AT THE MORGAN FURNITURE CO., WHO IDENTIFIED RYAN AS THE MAN WHO PAID THE BILL WITH THE FORGED CHECK, STATED THAT MRS. POWELL HAD INTRODUCED RYAN TO HIM AS MCCLUSKEY, RYAN DENIED THIS IN THE SALESMAN'S PRESENCE AND FINALLY THE SALESMAN STATED THAT HE HAD CALLED RYAN "MCCLUSKEY" WHILE ATTEMPTING TO INTEREST HIM IN A RADIO. THE FACTS WERE SUBMITTED TO THE UNITED STATES ATTORNEY WHO STATED THAT, UNDER THE CIRCUMSTANCES, HE DID NOT BELIEVE A COMPLAINT AGAINST MRS. POWELL WOULD SUCCEED. RYAN WAS ARRAIGNED BEFORE A UNITED STATES COMMISSIONER, WAIVED EXAMINATION, AND WAS ORDERED HELD UNDER $2,500 BOND FOR ACTION OF THE GRAND JURY. ON MAY 5, 1931, THE GRAND JURY RETURNED AN INDICTMENT AND RYAN PLEAD GUILTY, PRESUMABLY TO FORGERY, AND WAS SENTENCED TO SERVE ONE YEAR AND ONE DAY IN THE HOUSE OF CORRECTION AT SPRINGFIELD, MASS.

TO COME WITHIN THE RULE IN THE PHILIP V. WALTERS CASE, IT MUST APPEAR THAT THE IMPOSTOR NOT ONLY DECEIVED THE DRAWER OF THE CHECK AS TO HIS IDENTITY BUT, ALSO, THAT HE CONTINUED TO IMPERSONATE THE RIGHTFUL PAYEE TO SUCH AN EXTENT THAT THE INDORSER BY WHOM THE CHECK WAS CASHED FOR THE IMPOSTOR, AFTER EXERCISING DUE CARE AND DILIGENCE TO ASCERTAIN THE IDENTITY OF THE IMPOSTOR, HAD REASON TO BELIEVE THAT HE WAS THE RIGHTFUL PAYEE.

THE EVIDENCE IN THE PRESENT CASE DOES NOT ESTABLISH THAT THE IMPOSTOR MADE ANY REPRESENTATIONS TO THE FURNITURE COMPANY THAT HE WAS THE PAYEE OF THE CHECK OTHER THAN THE INFERENCE WHICH MIGHT BE DRAWN FROM HIS POSSESSION OF THE INDORSED CHECK. NEITHER DOES IT APPEAR THAT THE FURNITURE COMPANY MADE ANY ATTEMPT TO ASCERTAIN WHETHER THE PERSON PRESENTING THE CHECK WAS THE PERSON NAMED AS PAYEE IN THE CHECK.

THE COURTS OF MASSACHUSETTS, THE JURISDICTION IN WHICH THE FORGERY WAS COMMITTED, APPEAR TO FOLLOW GENERALLY THE RULE WHICH WAS APPLIED IN THE PHILIP V. WALTERS CASE. SEE ROBERTSON V. COLEMAN, 141 MASS. 231. IT IS TO BE NOTED, HOWEVER, THAT--- IN MASSACHUSETTS AS IN OTHER JURISDICTIONS-- - IN THE CASES IN WHICH THE SECOND INDORSER IS NOT HELD RESPONSIBLE FOR THE AMOUNT OF A CHECK ACCEPTED AND CASHED BY HIM ON A FORGED INDORSEMENT, IT GENERALLY APPEARS THE IMPOSTOR WHO FRAUDULENTLY OBTAINED THE CHECK AND NEGOTIATED IT BY A FORGERY ACTUALLY ASSUMED AND WAS KNOWN BY THE NAME OF THE RIGHTFUL PAYEE. IN ROBERTSON V. COLEMAN, SUPRA, IT APPEARED THAT A THIEF WHO HAD STOLEN A PAIR OF HORSES, REGISTERED AT A BOSTON HOTEL UNDER THE ASSUMED NAME OF CHARLES BARNEY, AND THAT HE GAVE THAT NAME TO CERTAIN AUCTIONEERS IN THE CITY AND REQUESTED THEM TO SELL THE HORSES FOR HIM. THERE WAS LIVING IN SWANSEA, MASS., AT THE TIME A RELIABLE AND RESPONSIBLE MAN NAMED CHARLES BARNEY AND THE AUCTIONEERS BELIEVED THE IMPOSTOR TO BE THAT PERSON. THEY PAID THE PROCEEDS OF THE SALE BY CHECK, DRAWN TO THE ORDER OF CHARLES BARNEY, AND THIS THE IMPOSTOR INDORSED AND TRANSFERRED FOR VALUE. THE AUCTIONEERS LEARNED THE TRUE FACTS BEFORE THE CHECK WAS PRESENTED AND STOPPED PAYMENT, BUT IT WAS HELD THAT THE INDORSEE COULD RECOVER IN AN ACTION BROUGHT AGAINST THEM, THE COURT OBSERVING THAT "THE NAME OF A PERSON IS THE VERBAL DESIGNATION BY WHICH HE IS KNOWN, BUT THE VISIBLE PRESENCE OF A PERSON AFFORDS SURER MEANS OF IDENTIFYING HIM THAN HIS NAME.'

THE FACTS OF THE CASE HERE INVOLVED MAY BE EASILY DISTINGUISHED FROM THE FACTS IN THE WALTERS CASE AND FROM THOSE IN THE CASE OF ROBERTSON V. COLEMAN. IN BOTH OF THESE CASES THE IMPOSTOR, PRIOR TO THE ISSUANCE OF THE CHECKS, ACTUALLY ASSUMED THE NAME OF THE RIGHTFUL PAYEE AND CONTINUED TO IMPERSONATE, AND TO BE KNOWN BY THE NAME OF THE RIGHTFUL PAYEE UNTIL AFTER THE CHECKS WERE CASHED, WHEREAS, IN THE PRESENT CASE THE EVIDENCE DOES NOT ESTABLISH THAT RYAN ASSUMED THE NAME OF MCCLUSKEY OR THAT ANYONE IN THE LOCALITY WHERE THE CHECK WAS NEGOTIATED BY HIM KNEW HIM AS MCCLUSKEY. IT APPEARS THAT THE SALESMAN OF THE MORGAN FURNITURE CO. MERELY ASSUMED THAT RYAN WAS MCCLUSKEY FROM THE FACT THAT HE PRESENTED A CHECK DRAWN TO AND INDORSED IN THE NAME OF MCCLUSKEY AND WAS ACCOMPANIED BY A WOMAN WHOSE IDENTITY THE SALESMAN DID KNOW. THE SALESMAN WHO REPRESENTED THE MORGAN FURNITURE CO. IN CASHING THE CHECK HAD NOT SEEN RYAN INDORSE MCCLUSKEY'S NAME ON THE CHECK AND DID NOT REQUIRE THE INDORSEMENT OF MRS. POWELL WHOSE ACCOUNT WAS BEING PAID BY THE CHECK.

IN VIEW OF THE FOREGOING IT MUST BE HELD THAT THE PRESENT CASE IS NOT CONTROLLED BY THE PHILIP V. WALTERS CASE. THE ACTION OF THE VETERANS' BUREAU IN PERMITTING THE CHECK TO GET INTO THE POSSESSION OF RYAN, THE IMPOSTOR, DID NOT RELIEVE THE SECOND INDORSER OF ITS LIABILITY IN CASHING THE CHECK ON THE FORGED INDORSEMENT. THE FACTS AND CIRCUMSTANCES DISCLOSED IN THIS CASE DID NOT WARRANT THE SECOND INDORSER IN ASSUMING THAT RYAN, WHO HAD POSSESSION OF THE CHECK AND WHO PRESENTED IT FOR CASHING, WAS THE PAYEE NAMED THEREIN. SEE DECISION OF JULY 3, 1931, A- 37013.

IT IS CLEARLY ESTABLISHED THAT THE RIGHTFUL PAYEE OF THE CHECK DID NOT INDORSE IT; THAT HIS NAME WAS FORGED THEREON; AND THAT THE SECOND INDORSER FAILED TO SECURE THE GENUINE INDORSEMENT OF THE PAYEE OF SAID CHECK OR THE PERSON DULY AUTHORIZED TO INDORSE THE CHECK IN HIS BEHALF. SINCE THE PRIOR INDORSEMENTS ARE GUARANTEED BY THE INDORSING BANK, THE TREASURY DEPARTMENT SHOULD EFFECT RECLAMATION OF THE PROCEEDS OF THE CHECK, WHICH AMOUNT SHOULD BE DEPOSITED TO THE CREDIT OF THE APPROPRIATION UNDER WHICH THE CHECK IN QUESTION WAS DRAWN.