A-60727, MAY 20, 1935, 14 COMP. GEN. 840

A-60727: May 20, 1935

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THE INDORSEMENT OF THE CHECK BY SUCH PERSON CONSTITUTES A FORGERY AND WILL NOT PROTECT A BANK WHICH INNOCENTLY CASHES SUCH CHECK- - THE MISTAKEN IDENTITY IN SUCH A CASE NOT INVOLVING THE DRAWER (THE GOVERNMENT) BUT INVOLVING RATHER THE BANK WHICH CASHED THE CHECK UPON THE SPURIOUS INDORSEMENT OF THE PAYEE'S NAME. 6 COMP. AS FOLLOWS: REFERENCE IS MADE TO THE FOLLOWING CHECK IN FAVOR OF JIM BENTON: NUMBER DATE AMOUNT DRAWER SYMBOL DATE PAID 15. WHITE 92-7244-24-34 HEREWITH ARE SUBMITTED THE CHECK DESCRIBED ABOVE AND THE FILE RELATIVE THERETO. IT APPEARS THAT THE CHECK WAS INTENDED FOR JIM BENTON. HENCE WAS DELIVERED TO JIM BENTON. WHO WAS THE ONLY JIM BENTON KNOWN TO THE POSTMASTER. IT IS REQUESTED THAT THIS OFFICE BE ADVISED WHETHER RECLAMATION PROCEEDINGS SHOULD BE ABANDONED.

A-60727, MAY 20, 1935, 14 COMP. GEN. 840

CHECKS - NEGOTIATION BY PERSON OF SAME NAME AS PAYEE - RECLAMATION WHERE THE GOVERNMENT DRAWS A CHECK TO THE ORDER OF A PROPER CLAIMANT AND MAILS SAME TO THE CORRECT ADDRESS BUT BY MISTAKE OF THE POSTMASTER THE CHECK FALLS INTO THE HANDS OF ANOTHER PERSON HAVING THE SAME NAME AS THE PAYEE, THE INDORSEMENT OF THE CHECK BY SUCH PERSON CONSTITUTES A FORGERY AND WILL NOT PROTECT A BANK WHICH INNOCENTLY CASHES SUCH CHECK- - THE MISTAKEN IDENTITY IN SUCH A CASE NOT INVOLVING THE DRAWER (THE GOVERNMENT) BUT INVOLVING RATHER THE BANK WHICH CASHED THE CHECK UPON THE SPURIOUS INDORSEMENT OF THE PAYEE'S NAME. 6 COMP. GEN. 532 DISTINGUISHED.

COMPTROLLER GENERAL MCCARL TO THE TREASURER OF THE UNITED STATES, MAY 20, 1935:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF OCTOBER 5, 1934, AS FOLLOWS:

REFERENCE IS MADE TO THE FOLLOWING CHECK IN FAVOR OF JIM BENTON:

NUMBER DATE AMOUNT DRAWER SYMBOL DATE PAID

15,424 4-11-34 $48.51 WILLIAM M. WHITE 92-7244-24-34

HEREWITH ARE SUBMITTED THE CHECK DESCRIBED ABOVE AND THE FILE RELATIVE THERETO.

IT APPEARS THAT THE CHECK WAS INTENDED FOR JIM BENTON, COLORED, WHO HAD NOT BEEN IN THE COMMUNITY LONG AND HAD NEVER LEFT ANY ADDRESS WITH THE POST OFFICE, HENCE WAS DELIVERED TO JIM BENTON, WHITE FARMER, RURAL ROUTE NO. 1, ELKHART, TEXAS, WHO WAS THE ONLY JIM BENTON KNOWN TO THE POSTMASTER.

IN VIEW OF YOUR DECISIONS A-53,194, DATED APRIL 30, 1934, AND A 56,644, DATED AUGUST 30, 1934, IN THE CASES OF GEORGE W. WALKER AND JOHN HERNANDEZ, RESPECTIVELY, IT IS REQUESTED THAT THIS OFFICE BE ADVISED WHETHER RECLAMATION PROCEEDINGS SHOULD BE ABANDONED.

THE SUBJECT CHECK WAS ISSUED TO THE PAYEE BY THE FARM CREDIT ADMINISTRATION ON THE BASIS OF AN APPLICATION FILED BY HIM FOR AN EMERGENCY CROP LOAN UNDER THE PROVISIONS OF THE ACT OF FEBRUARY 23, 1934 (48 STAT. 354), AND WAS MAILED TO HIM AT ELKHART, TEX., ROUTE 3, THE ADDRESS GIVEN IN THE APPLICATION. IT APPEARS THAT THE ONLY PERSON KNOWN TO THE POSTMASTER AT ELKHART, TEX., AS JIM BENTON, THE PAYEE NAMED ON THE CHECK, WAS A WHITE MAN RESIDING ON ROUTE 1, TO WHOM THE POSTMASTER DELIVERED THE CHECK AND WHO NEGOTIATED IT ON THE BELIEF THAT HE WAS ENTITLED TO THE PROCEEDS THEREOF--- IT HAVING BEEN REPORTED THAT HE, HIMSELF, HAD MADE APPLICATION FOR A CROP LOAN UNDER THE ACT, AND WAS EXPECTING A CHECK FROM THE GOVERNMENT.

IN THE SECRET SERVICE REPORT OF AUGUST 31, 1934, THE FOLLOWING WAS STATED WITH RESPECT TO THE INTERVIEW HAD WITH THE OFFICIAL OF THE CASHING BANK, ELKHART STATE BANK:

CALLED AT THE ELKHART STATE BANK, 2ND ENDORSER, AND J. B. PARKER, CASHIER, STATED THAT HE CASHED SUBJECT CHECK FOR JIM BENTON, WHITE FARMER, WHOM HE KNEW WELL AND WHO BROUGHT THIS CHECK TO THE BANK, THAT THIS WAS THE ONLY JIM BENTON KNOWN TO HIM IN THIS COMMUNITY. THAT ON AUGUST 22ND, HE HAD RECEIVED LETTER FROM THE SOUTH TEXAS COMMERCIAL NAT-L BANK AT HOUSTON, TEXAS, WITH WHOM THEY HAD IN TURN DEPOSITED THIS CHECK, THAT SAME WAS A FORGERY AND FORWARDING HIM PHOTO COPY OF THE CHECK, ASKING FOR REIMBURSEMENT, AND UPON RECEIPT OF SAME, HAD ASCERTAINED INFORMATION FROM POSTMASTER THAT THE CHECK RIGHTFULLY BELONGED TO NEGRO NAMED JIM BENTON ON ROUTE NO. 3; THAT HE HAD THEN GONE TO SEE JIM BENTON, WHITE MAN, FOR WHOM HE HAD CASHED THE CHECK, AND ASCERTAINED THAT THIS JIM BENTON, WHO LIVES ON FARM OF EARL DRISKILL, WHO LIVES AT STOCKDALE, TEXAS, AND THAT THIS JIM BENTON HAD, DURING THE EARLY SPRING, MADE APPLICATION THROUGH MR. JONES, THE COUNTY AGENT, FOR A CROP LOAN, AND HAD A RIGHT TO ACCEPT A TREASURY CHECK, ETC., AND THAT HE HAD THIS DATE WRITTEN THEIR CORRESPONDENT BANK AT HOUSTON, TEXAS, TO THIS EFFECT, FURNISH ME A COPY OF THIS LETTER, WHICH IS ATTACHED TO THE FILE.

WHILE THE FACTS IN THE CASE SHOW THAT THE POSTMASTER AT ELKHART, TEX., THROUGH A MISTAKE OF FACT, DELIVERED THE CHECK TO THE WRONG PERSON, NOTHING HAS BEEN FURNISHED TO SHOW THAT THE CASHING BANK EXERCISED THE DEGREE OF CARE REQUIRED BY LAW TO IDENTIFY THE PAYEE OF THE CHECK. IT IS NOTEWORTHY THAT THE ADDRESS OF THE RIGHTFUL PAYEE WAS SHOWN ON THE CHECK ITSELF AS ELKHART, TEX., ROUTE 3, AND THIS WAS AN IMPORTANT FACTOR IN PUTTING THE CASHING BANK ON NOTICE AS TO WHETHER THE PERSON PRESENTING THE CHECK WAS RESIDING OR HAD EVER RESIDED AT SUCH ADDRESS AND WAS ACTUALLY THE PAYEE NAMED AND INTENDED BY THE GOVERNMENT.

THE INSTANT CASE IS TO BE DISTINGUISHED FROM ONE WHERE THE GOVERNMENT DEALS DIRECTLY WITH AN IMPOSTOR WHO NEGOTIATES THE CHECK. HERE THE GOVERNMENT DID NOT DEAL WITH THE PERSON WHO RECEIVED AND NEGOTIATED THE SUBJECT CHECK AND NEITHER DID IT INTEND THAT THE PARTICULAR PERSON SHOULD RECEIVE THE CHECK. THERE WAS NO MISTAKEN IDENTITY IN THE PERSON DESCRIBED IN THE SUBJECT CHECK SO AS TO BRING THE CASE WITHIN THE RULE ANNOUNCED IN 6 COMP. GEN. 532, AND 9 ID. 476, NOR WITHIN THE WALKER AND HERNANDEZ CASES, A-53194, DATED APRIL 30, 1934, AND A-56644, DATED AUGUST 30, 1934, RESPECTIVELY, REFERRED TO IN YOUR LETTER, SUPRA. THE MISTAKEN IDENTITY HERE INVOLVED THE CASHING BANK WHICH CASHED THE CHECK UPON THE SPURIOUS INDORSEMENT OF THE PAYEE'S NAME. SEE A-48974, DATED OCTOBER 14, 1933, AND A-58808, DATED JANUARY 24, 1935. WITH RESPECT TO THE QUESTION WHO MUST BEAR THE LOSS WHEN A CHECK IS PAID UPON THE SPURIOUS INDORSEMENT OF ONE WHO BEARS THE SAME NAME AS THE PAYEE, SEE THE NOTE TO S. WEISBERGER CO. V. BARBERTON SAVING BANK CO., 34 L.R.A. (N.S.) 1101. ALSO, THOMAS V. FIRST NATIONAL BANK, 39 L.R.A. (N.S.) 355, AND SECTION 400 OF 7 C.J. 677, INCLUDING NOTE 28 (B) THEREUNDER, AND NOTE 19 (L) TO SECTION 422, 7 C.J. 693.

ON THE FACTS APPEARING, THEREFORE, YOU ARE ADVISED THAT RECLAMATION ON THE CHECK SHOULD BE INSISTED UPON. THIS OFFICE AND THE FARM CREDIT ADMINISTRATION SHOULD BE ADVISED PROMPTLY WHEN RECLAMATION SHALL HAVE BEEN COMPLETED.

THE RECLAMATION FILE IS RETURNED FOR YOUR FURTHER ACTION AS HEREIN DIRECTED.