A-64464, NOVEMBER 5, 1935, 15 COMP. GEN. 370

A-64464: Nov 5, 1935

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

IS A HOLDER IN DUE COURSE AND ENTITLED TO THE PROCEEDS. AS FOLLOWS: REFERENCE IS MADE TO THE FOLLOWING CHECK IN FAVOR OF LLOYD T. 1934 TRANSMITTED HEREWITH IS THE ABOVE DESCRIBED ORIGINAL CHECK AND THE FILE RELATING THERETO. PAYMENT WAS DECLINED ON THE CHECK WHEN IT WAS PRESENTED ON DECEMBER 1. IT APPEARS THAT THIS CHECK WAS CASHED BY THE STOBBE DRY GOODS COMPANY FOR A WOMAN REPRESENTING HERSELF AS THE WIFE OF THE PAYEE. THE FILE IS REFERRED FOR ADVICE AS TO WHETHER THE THIRD INDORSER. IS A HOLDER IN DUE COURSE IN VIEW OF THE CIRCUMSTANCES UNDER WHICH THE CHECK WAS NEGOTIATED TO THAT COMPANY OR WHETHER THE AMOUNT SHOULD BE PAID TO THE POSTMASTER AT OAK CREEK. WAS A RURAL CARRIER SERVING ON A ROUTE FROM OAK CREEK.

A-64464, NOVEMBER 5, 1935, 15 COMP. GEN. 370

CHECKS - STOLEN AFTER INDORSEMENT IN BLANK A MERCHANT WHO CASHES A GOVERNMENT CHECK WHICH HAD BEEN STOLEN FROM A POSTMASTER AFTER HAVING BEEN INDORSED IN BLANK BY THE PAYEE, IS A HOLDER IN DUE COURSE AND ENTITLED TO THE PROCEEDS.

COMPTROLLER GENERAL MCCARL TO THE TREASURER OF THE UNITED STATES, NOVEMBER 5, 1935:

THERE HAS BEEN CONSIDERED YOUR LETTER OF MAY 3, 1935, AS FOLLOWS:

REFERENCE IS MADE TO THE FOLLOWING CHECK IN FAVOR OF LLOYD T. BATTON:

TABLE NUMBER DATE AMOUNT DRAWER SYMBOL DATE

DECLINED 93,533 11-16-34 $86.33 JAMES O. STEVIC ----- 48-453 DEC. 1, 1934

TRANSMITTED HEREWITH IS THE ABOVE DESCRIBED ORIGINAL CHECK AND THE FILE RELATING THERETO. PAYMENT WAS DECLINED ON THE CHECK WHEN IT WAS PRESENTED ON DECEMBER 1, 1934.

FROM A SECRET SERVICE REPORT DATED MARCH 1, 1935, IT APPEARS THAT THIS CHECK WAS CASHED BY THE STOBBE DRY GOODS COMPANY FOR A WOMAN REPRESENTING HERSELF AS THE WIFE OF THE PAYEE.

AS THE CHECK BORE THE INDORSEMENT OF THE PAYEE IN BLANK, THE FILE IS REFERRED FOR ADVICE AS TO WHETHER THE THIRD INDORSER, STOBBE DRY GOODS COMPANY, IS A HOLDER IN DUE COURSE IN VIEW OF THE CIRCUMSTANCES UNDER WHICH THE CHECK WAS NEGOTIATED TO THAT COMPANY OR WHETHER THE AMOUNT SHOULD BE PAID TO THE POSTMASTER AT OAK CREEK, COLORADO.

IT APPEARS THE PAYEE OF THE CHECK, LLOYD T. BATTON, WAS A RURAL CARRIER SERVING ON A ROUTE FROM OAK CREEK, COLO., AND ON RECEIPT OF THE ABOVE- DESCRIBED SALARY CHECK NEGOTIATED IT TO THE POSTMASTER AT OAK CREEK BY INDORSING THEREON, IN INK, HIS NAME EXACTLY AS IT APPEARED ON THE FACE OF THE CHECK, RECEIVING CASH THEREFOR. THE POSTMASTER ON CASHING THE CHECK PLACED IT IN THE POST-OFFICE SAFE FROM WHICH PLACE, DURING THE EARLY MORNING OF NOVEMBER 18, 1934, IT WAS STOLEN. ON NOVEMBER 24 OR 25, 1934, THE CHECK WAS PRESENTED TO AND ACCEPTED BY THE STOBBE DRY GOODS COMPANY IN PAYMENT FOR CERTAIN PURCHASES AMOUNTING TO APPROXIMATELY $8 MADE BY A WOMAN REPRESENTING HERSELF TO BE THE WIFE OF THE PAYEE OF THE CHECK, WHO INDORSED HER NAME THEREON AND WAS PAID THE DIFFERENCE IN CASH.

UNDER THE SO-CALLED "UNIFORM NEGOTIABLE INSTRUMENT LAW," MANY OF THE UNDERLYING PRINCIPLES OF WHICH HAVE BEEN ACCEPTED BY THE UNITED STATES IN ITS BUSINESS TRANSACTIONS, A HOLDER IN DUE COURSE OF A CHECK IS RECOGNIZED AS THE HOLDER OF AN INSTRUMENT COMPLETE AND REGULAR UPON ITS FACE, WHO RECEIVED IT BEFORE IT WAS OVERDUE, WITHOUT NOTICE OF PREVIOUS DISHONOR, IN GOOD FAITH, FOR VALUE AND WITHOUT NOTICE OF ANY INFIRMITY IN THE INSTRUMENT OR DEFECT IN THE TITLE OF THE PERSON NEGOTIATING IT. THUS, IT HAS BEEN HELD THAT WHERE A CHECK INDORSED IN BLANK WAS LOST AND WITHIN A WEEK AFTER ITS ISSUE WAS RECEIVED BY A MERCHANT FOR VALUE FROM A PERSON WHOM HE DID NOT KNOW, BUT ASSUMED TO BE THE PAYEE NAMED IN THE CHECK, THE MERCHANT WAS HELD TO BE A HOLDER IN DUE COURSE. UNAKA NATIONAL BANK V. BUTLER, 83 SW REP. 655.

IN THE INSTANT CASE THERE IS NO QUESTION AS TO THE GENUINENESS OF THE PAYEE'S INDORSEMENT, AND UNDER THE CIRCUMSTANCES ABOVE DESCRIBED IN WHICH THE STOBBE DRY GOODS CO. RECEIVED THE CHECK IT BECAME A HOLDER IN DUE COURSE AND IS ENTITLED TO THE PROCEEDS OF THE CHECK. YOU ARE ADVISED ACCORDINGLY, AND THE PAPERS TRANSMITTED WITH YOUR LETTER OF MAY 3, 1935, ARE RETURNED FOR YOUR FURTHER ACTION.