B-72159, FEBRUARY 10, 1948, 27 COMP. GEN. 442

B-72159, FEBRUARY 10, 1948, 27 COMP. GEN. 442

CHECKS - FORGERIES - RECLAMATION - ERRONEOUS CHECK DELIVERIES - NAME SIMILARITY WHERE, THROUGH ADMINISTRATIVE INADVERTENCE, A GOVERNMENT SALARY CHECK DRAWN TO THE ORDER OF A PAYEE BY GIVEN NAME AND SURNAME, FOLLOWED BY THE ABBREVIATION " JR., " ERRONEOUSLY WAS DELIVERED TO A PERSON HAVING THE SAME LAST AND FIRST NAME AS THE INTENDED PAYEE, EXCEPT FOR THE INCLUSION OF A MIDDLE INITIAL AND WITHOUT THE ABBREVIATION " JR., " THE CASHING BANK WAS CHARGEABLE WITH NOTICE THAT THE ERRONEOUS RECIPIENT FOR WHOM IT CASHED THE CHECK UPON HIS WRITTEN ENDORSEMENT WAS NOT THE INTENDED PAYEE, AND MUST BE HELD LIABLE FOR THE AMOUNT OF THE CHECK.

ACTING COMPTROLLER GENERAL YATES TO THE TREASURER OF THE UNITED STATES, FEBRUARY 10, 1948:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 12, 1947, A 416 EFM, RELATIVE TO THE NEGOTIATION OF CHECK NO. 162,595, DATED OCTOBER 31, 1946, IN THE AMOUNT OF $106, DRAWN BY ROY J. CAPERTON, SYMBOL 210,152, TO THE ORDER OF JAMES FISHER, JR.

THE RECORDS SHOW THAT THE CHECK WAS ISSUED ON ACCOUNT OF SALARY DUE JAMES FISHER, JR., OF 8431 OAK PARK BOULEVARD, FERNDALE 20, MICHIGAN, AS AN EMPLOYEE OF THE WAR DEPARTMENT, ORDNANCE DEPARTMENT, DETROIT ARSENAL, CENTER LINE, MICHIGAN, BUT THAT, THROUGH INADVERTENCE, IT WAS MAILED TO 2216 NEWTON, DETROIT 11, MICHIGAN, WHERE IT WAS RECEIVED BY ONE JAMES H. FISHER, A FORMER EMPLOYEE OF THE ARSENAL, WHO CASHED THE SAME AT THE DETROIT BANK, DETROIT, MICHIGAN. THE NEGOTIATOR ALLEGES THAT HE BELIEVED HE HAD SOME ADDITIONAL SALARY DUE AND NEGOTIATED THE CHECK IN THE UNDERSTANDING THAT HE WAS ENTITLED TO ITS AMOUNT. HOWEVER, REPORT OF THE DETROIT ARSENAL DATED NOVEMBER 8, 1946, INDICATES THAT THERE IS NO SALARY DUE JAMES H. FISHER, FROM WHICH ADJUSTMENT MAY BE MADE. WHEN INTERVIEWED BY AN AGENT OF THE U.S. SECRET SERVICE, THE NEGOTIATOR INDICATED HE WAS NOT REGULARLY EMPLOYED BUT WOULD MAKE EVERY EFFORT TO REPAY THE AMOUNT OF THE CHECK IN INSTALLMENTS AND $20 HAS BEEN RECOVERED IN SMALL PAYMENTS TO DATE. THE CASHING BANK STATES THAT IT NEGOTIATED THE CHECK FOR ONE JAMES FISHER RESIDING AT 2216 NEWTON, DETROIT 11, MICHIGAN, AND, IN A LETTER DATED FEBRUARY 7, 1947, RELATIVE THERETO, IT CONTENDS AS FOLLOWS:

* * * SINCE THIS INFORMATION AGREES WITH THE NAME AND ADDRESS OF THE PAYEE MENTIONED ON THE CHECK, THERE WAS EVIDENCE THAT THE PERSON PRESENTING IT WAS THE INTENDED PAYEE AND AS A RESULT OF IT THERE CAN BE NO CLAIM OF FORGERY OF ENDORSEMENT AND, THEREFORE, NO LIABILITY ON THE PART OF THE DETROIT BANK.

THE FILE INDICATES THAT THE INTENDED PAYEE BORROWED $100 FROM THE POST CIVILIAN WELFARE FUND COUNCIL, DETROIT ARSENAL, ON NOVEMBER 1, 1946, PRESUMABLY, IN ORDER TO TIDE HIM OVER UNTIL HE RECEIVED THE PROCEEDS OF THE INVOLVED CHECK. ON NOVEMBER 26, 1947, THE CUSTODIAN OF THE WELFARE FUND REQUESTED REPAYMENT OF THE AMOUNT, IN VIEW OF WHICH EXPEDITED ACTION TO PAY THE INTENDED PAYEE THE AMOUNT HAS BEEN REQUESTED ON HIS BEHALF BY THE SERVICE OFFICER, OAKLAND COUNTY COUNCIL OF VETERANS, 111 SOUTH TROY STREET, ROYAL OAK, MICHIGAN.

UNDER THESE CIRCUMSTANCES, YOU REQUEST ADVICE AS TO WHETHER RECLAMATION PROCEEDING MAY BE ABANDONED AND WHETHER THIS OFFICE WILL TAKE APPROPRIATE ACTION TO SETTLE THE CLAIM OF THE RIGHTFUL PAYEE. YOU FURTHER REQUEST INFORMATION AS TO THE DISPOSITION TO BE MADE OF THE SUM OF $20 RECOVERED FROM THE NEGOTIATOR AND OF SUCH MONEYS AS MAY IN THE FUTURE BE RECEIVED FROM THAT SOURCE.

THE CHECK WAS ISSUED TO JAMES FISHER, JR. THE ABBREVIATION " JR.' AFTER A PERSON'S NAME IS COMMONLY USED TO DENOTE "JUNIOR" AND WHERE A CHECK IS DRAWN TO JAMES FISHER, JR., THE INTENTION CLEARLY WAS TO PAY SUCH AMOUNT ONLY TO JAMES FISHER, JUNIOR, NO REASON BEING APPARENT AS TO WHY THE ABBREVIATION " JR.' SHOULD NOT BE REGARDED AS PART OF THE NAME OF THE INTENDED PAYEE. WHERE A BANK CASHES A CHECK DRAWN TO JAMES FISHER, JR., FOR A PERSON OTHER THAN THE INTENDED PAYEE--- THE NEGOTIATOR'S CORRECT NAME APPEARING TO BE JAMES H. FISHER, AND, THEREFORE, NOT IDENTICAL TO THAT OF THE INTENDED PAYEE--- THE ENDORSEMENT OF THE ERRONEOUS NEGOTIATOR APPEARS TO CONSTITUTE A FORGERY AND TO CONFER ON THE BANK NO RIGHT OR TITLE TO THE CHECK. SEE SECTION 23, NEGOTIABLE INSTRUMENTS LAW; FULTON NATIONAL BANK OF ATLANTA V. UNITED STATES, 107 F.2D 86. MOREOVER, IT APPEARS TO BE ESTABLISHED THAT, WHERE A CHECK IS RECEIVED BY A PERSON HAVING THE IDENTICAL NAME AS THE INTENDED PAYEE, HIS ENDORSEMENT THEREOF, IF NOT TECHNICALLY A FORGERY, IS AT LEAST SPURIOUS AND FALSE AND INOPERATIVE TO TRANSFER TITLE THERETO. UNITED STATES V. NATIONAL CITY BANK OF NEW YORK, 28 F.1SUPP. 144, 147; THOMAS V. FIRST NATIONAL BANK, 105 MISS. 500, 39 L.R.A. ( N.S.) 355; AND BEATTIE V. NATIONAL BANK OF ILLINOIS, 174 ILL. 571, 51 N.E. 601. HENCE, WHERE A GOVERNMENT CHECK IS RECEIVED AND NEGOTIATED BY A PERSON OTHER THAN THE INTENDED PAYEE, EVEN THOUGH THE RECIPIENT BEARS THE SAME NAME AS THE INTENDED PAYEE, IT HAS BEEN HELD THAT THE GOVERNMENT HAS THE RIGHT TO REFUSE PAYMENT OF THE SAID CHECK WHEN PRESENTED TO IT, OR TO RECLAIM ITS AMOUNT IF PAID, UNLESS THE GOVERNMENT IS PRECLUDED FROM SETTING UP THE FORGERY OR LACK OF AUTHORITY OF THE NEGOTIATOR TO HAVE ENDORSED THE CHECK BY NEGLIGENCE ON THE PART OF THE ADMINISTRATIVE OFFICE IN FORWARDING THE CHECK TO THE WRONGFUL PAYEE AND THE ENDORSER COULD NOT BY REASONABLE DILIGENCE HAVE ASCERTAINED THAT THE WRONGFUL ENDORSER DID NOT HAVE ANY RIGHT TO THE CHECK. 26 COMP. GEN. 834. IN THE INSTANT CASE, IT APPEARS THAT THE BANK WAS CHARGEABLE WITH NOTICE THAT THE PERSON FOR WHOM IT CASHED THE CHECK, JAMES H. FISHER, WAS NOT THE JAMES FISHER, JR., FOR WHOM THE CHECK WAS INTENDED. HAVING PAID ITS AMOUNT TO A PERSON WHO DID NOT BEAR THE IDENTICAL NAME OF THE INTENDED PAYEE, THE BANK FAILED IN ITS DUTY TO ASCERTAIN THE TRUE INDIVIDUAL FOR WHOM THE CHECK WAS INTENDED AND, FAILING IN ITS DUTY, IT MUST BE HELD LIABLE AND THE ABANDONMENT OF RECLAMATION PROCEEDINGS IS NOT AUTHORIZED BUT SUCH PROCEEDINGS SHOULD BE CONTINUED UNTIL THE FULL AMOUNT OF THE CHECK IS RECOVERED, EITHER THROUGH THE BANKS OR FROM THE WRONGFUL NEGOTIATOR.

SINCE THE INTENDED PAYEE APPEARS TO BE IN NO WAY AT FAULT IN THE MISDIRECTION AND SUBSEQUENT ERRONEOUS NEGOTIATION OF THE CHECK, AND AS NO REASON IS APPARENT WHY HE SHOULD BE DENIED THE USE OF THE FUNDS APPARENTLY DUE HIM PENDING COMPLETION OF RECOVERY OF THE AMOUNT OF THE CHECK, I HAVE, BY LETTER OF TODAY TO THE SECRETARY OF THE ARMY, AUTHORIZED THE ISSUANCE OF ANOTHER CHECK TO HIM, IF IT IS ADMINISTRATIVELY DETERMINED THAT HE IS STILL ENTITLED TO THE AMOUNT THEREOF. IN VIEW OF SUCH ACTION, THE AMOUNT OF $20 RECOVERED FROM THE WRONGFUL NEGOTIATOR AND THE BALANCE OF THE AMOUNT OF THE CHECK WHEN RECOVERED--- EITHER THROUGH RECLAMATION PROCEEDINGS OR BY DIRECT REFUND OF THE NEGOTIATOR--- SHOULD BE DEPOSITED TO THE CREDIT OF ROY J. CAPERTON, SYMBOL 210,152, AND THE AUDIT DIVISION OF THIS OFFICE SHOULD BE ADVISED WHEN SUCH ACTION IS ACCOMPLISHED SO THAT APPROPRIATE ACTION MAY BE TAKEN IN REGARD TO THE DISBURSING OFFICER'S ACCOUNT INVOLVED.