B-133788, OCT. 23, 1957
Highlights
THE RECORD SHOWS THAT THE CHECK IN QUESTION WAS DELIVERED TO THE ADDRESS OF THE PAYEE AT MIAMI. WHERE IT WAS RECEIVED BY ONE THELMA T. THE SUM OF $250 PLUS THE AMOUNT OF $18.10 THEN ON DEPOSIT IN THE CHECKING ACCOUNT OR A TOTAL OF $268.10 WAS WITHDRAWN. MORRIS AS DRAWER HAVE BEEN FURNISHED AS EVIDENCE OF SUCH WITHDRAWALS. MISS BATTALION STATES THAT THE PROCEEDS OF THE PERSONAL CHECKS CASHED BY HER WERE USED LARGELY TO PAY BILLS INCURRED BY THE DRAWER AND OTHERWISE FOR HER OWN PERSONAL USES WITH THE DRAWER'S CONSENT. THE TAX REFUND CHECK WAS ENDORSED IN THE NAME OF THE PAYEE BY MISS BATTALION. UNAUTHORIZED OR FORGED ENDORSEMENT OF THE PAYEE'S SIGNATURE CONFERS NO TITLE OR RIGHT TO ENFORCE PAYMENT THEREOF UNLESS THE PARTY AGAINST WHOM IT IS SOUGHT TO ENFORCE SUCH RIGHT.
B-133788, OCT. 23, 1957
TO MRS. IVY BAKER PRIEST, TREASURER OF THE UNITED STATES, TREASURY DEPARTMENT:
BY LETTER DATED JUNE 20, 1957, 457 REL WJH, THE SPECIAL ASSISTANT TREASURER FORWARDED THE FILE CONCERNING INCOME TAX REFUND CHECK NO. 32,253,034, DRAWN APRIL 1, 1955, IN THE AMOUNT OF $295.95, OVER SYMBOL 406, TO MARGARET S. MORRIS AND ASKED WHETHER RECLAMATION PROCEEDINGS TAKEN THEREON MAY BE ABANDONED.
THE RECORD SHOWS THAT THE CHECK IN QUESTION WAS DELIVERED TO THE ADDRESS OF THE PAYEE AT MIAMI, FLORIDA, WHERE IT WAS RECEIVED BY ONE THELMA T. BATTALION WHO SHARED AN APARTMENT WITH THE PAYEE. MISS BATTALION CASHED THE CHECK AT THE METROPOLITAN BANK IN MIAMI WHERE THE PAYEE MAINTAINED A CHECKING ACCOUNT AND DEPOSITED $250 OF THE PROCEEDS INTO THE PAYEE'S CHECKING ACCOUNT AND KEPT THE BALANCE OF $45.95 FOR HER OWN USE. THEREAFTER, THE SUM OF $250 PLUS THE AMOUNT OF $18.10 THEN ON DEPOSIT IN THE CHECKING ACCOUNT OR A TOTAL OF $268.10 WAS WITHDRAWN. PHOTOSTATIC COPIES OF FIVE PERSONAL CHECKS TOTALING $267 BEARING THE GENUINE SIGNATURE OF MRS. MORRIS AS DRAWER HAVE BEEN FURNISHED AS EVIDENCE OF SUCH WITHDRAWALS. SINCE IT APPEARED THAT THE PAYEE RECEIVED $250 OF THE PROCEEDS OF THE GOVERNMENT TAX REFUND CHECK, YOUR OFFICE WROTE MRS. MORRIS REQUESTING THE RELEASE OF HER CLAIM FOR THE PROCEEDS OF THE CHECK UPON PAYMENT OF $45.95, THE AMOUNT MISS BATTALION RECEIVED AT THE TIME OF THE NEGOTIATION OF THE CHECK. THE PAYEE, THROUGH HER ATTORNEY, REFUSED SUCH A RELEASE, STATING THAT WHILE THE FIVE PERSONAL CHECKS BEAR MRS. MORRIS' GENUINE SIGNATURE AS DRAWER, SHE RECEIVED NONE OF THEIR PROCEEDS BECAUSE THE FIVE CHECKS SIGNED BY MRS. MORRIS AS MAKER IN BLANK HAD BEEN FURNISHED BY HER TO MISS BATTALION WHO USED THE PROCEEDS FOR HER OWN PURPOSES. MISS BATTALION STATES THAT THE PROCEEDS OF THE PERSONAL CHECKS CASHED BY HER WERE USED LARGELY TO PAY BILLS INCURRED BY THE DRAWER AND OTHERWISE FOR HER OWN PERSONAL USES WITH THE DRAWER'S CONSENT.
THE TAX REFUND CHECK WAS ENDORSED IN THE NAME OF THE PAYEE BY MISS BATTALION. HER AUTHORITY TO SO ENDORSE HAS NOT BEEN ESTABLISHED. UNAUTHORIZED OR FORGED ENDORSEMENT OF THE PAYEE'S SIGNATURE CONFERS NO TITLE OR RIGHT TO ENFORCE PAYMENT THEREOF UNLESS THE PARTY AGAINST WHOM IT IS SOUGHT TO ENFORCE SUCH RIGHT, IS PRECLUDED FROM SETTING UP THE FORGERY OR WANT OF AUTHORITY. SEE SECTION 23 OF THE UNIFORM NEGOTIABLE INSTRUMENTS LAW. ALSO, 26 COMP. GEN. 834. IN THESE CIRCUMSTANCES, THE CASHING BANK WOULD BE LIABLE FOR THE AMOUNT OF THE CHECK UNDER ITS WARRANTY THAT ALL PRIOR ENDORSEMENTS ARE GUARANTEED UNLESS THE PAYEE IS ESTOPPED FROM ASSERTING A CLAIM AGAINST THE BANK. IT IS THE RULE HOWEVER THAT THE BANK WILL BE FREE FROM LIABILITY WHERE THE MONEY REACHES THE PERSON WHOM THE DRAWER INTENDS SHOULD RECEIVE IT. 9 C.J.S. BANKS AND BANKING SEC. 356 C.J.S., P. 737.
THE RECORD SHOWS THAT $250 OF THE CHECK PROCEEDS WERE DEPOSITED IN THE CHECKING ACCOUNT OF THE PAYEE AT THE TIME OF THE ENCASHMENT OF THE CHECK. THIS ACTION AMOUNTED TO THE PAYMENT OF $250 BY THE BANK TO MRS. MORRIS AND THE SUBSEQUENT WITHDRAWAL FROM THE ACCOUNT BY MISS BATTALION UNDER THE CIRCUMSTANCES MENTIONED ABOVE WOULD NOT CHANGE THIS CONCLUSION. THE ARRANGEMENTS MADE BY THE PAYEE WITH MISS BATTALTION CONCERNING THE ENCASHMENT OF PERSONAL CHECKS OF THE PAYEE, THE DELIVERY BY THE PAYEE OF CHECKS SIGNED IN BLANK, AND THE CONSEQUENCES THEREOF ARE A MATTER FOR ADJUSTMENT BETWEEN THEM AND THE CASHING BANK HAS NO RESPONSIBILITY FOR THE $250 WHICH WAS PLACED TO THE CREDIT OF THE PAYEE.
THE PAYEE SHOULD BE ADVISED THROUGH HER ATTORNEY THAT THE GOVERNMENT ISSUED THE CHECK AND DELIVERED IT TO THE ADDRESS SHOWN ON HER TAX RETURN AND THAT FOR THE REASONS GIVEN ABOVE THE $250 WHICH WAS DEPOSITED TO THE CREDIT OF THE PAYEE'S BANK ACCOUNT CONSTITUTES A PAYMENT OF THAT SUM TO HER THUS RELIEVING THE CASHING ENDORSER AND THE GOVERNMENT OF LIABILITY THEREOF. SHE SHOULD BE FURTHER ADVISED THAT THE BALANCE OF $45.95 WILL BE PAID TO HER UPON RECEIPT OF SUCH SUM FROM THE CASHING BANK.
SINCE THE CASHING BANK PAID THE SUM OF $45.95 TO MISS BATTALION UPON HER FORGED OR UNAUTHORIZED ENDORSEMENT OF THE CHECK, RECLAMATION SHOULD BE CONTINUED FOR THE RECOVERY OF THAT SUM WHICH MAY BE PAID TO THE PAYEE UPON ITS RECEIPT.