United States v. National Exchange Bank of Baltimore, Md
| Decision Date | 12 April 1926 |
| Docket Number | No. 222,222 |
| Citation | 46 S.Ct. 388,70 L.Ed. 717,270 U.S. 527 |
| Parties | UNITED STATES v. NATIONAL EXCHANGE BANK OF BALTIMORE, MD |
| Court | U.S. Supreme Court |
The Attorney General and Mr. Gardner P. Lloyd, of New York City, for the United States.
[Argument of Counsel from pages 528-529 intentionally omitted] Messrs. G. Ridgely Sappington and Charles G. Baldwin, both of Baltimore, Md., for defendant in error.
[Argument of Counsel from pages 530-532 intentionally omitted] Mr. Justice HOLMES delivered the opinion of the Court.
This is a suit brought by the United States to recover the difference between the amount to which a check paid by it had been fraudulently raised and the amount for which the check was drawn. The case was heard upon a demurrer to the declaration and the judgment was for the defendant both in the District Court and in the Circuit Court of Appeals. 1 F.(2d) 888. The facts alleged are as follows: A disbursing clerk drew a United States Veteran's Bureau check upon the Treasurer of the United States in favor of one Beck, for $47.50. After it was issued the check was changed so as to call for $4750. Beck endorsed it to a bank of South Carolina and received the amount of the altered check. That bank endorsed it: negotiated it to the defendant, and received the same amount. The defendant endorsed the check, 'Received Payment Through the Baltimore Clearing House, Endorsements Guaranteed, June 5th, 1922,' delivered it to and received the same amount from the Baltimore Branch of the Federal Reserve Bank of Richmond, the agent of the plaintiff, which forwarded the check to the Treasurer of the United States and was given credit for $4,750. The Baltimore Branch had no notice of the fraudulent change.
The Government argues that acceptance or payment of a draft or check although it vouches for the signature of the drawer does not vouch for the body of the instrument, Espy v. First National Bank of Cincinnati, 18 Wall. 604, 21 L. Ed. 947; that this rule is not changed by section 62 of the Uniform Negotiable Instruments Law; Article 13, section 81, Maryland Code of Public General Laws: 'The acceptor, by accepting the instrument, engages that he will pay it according to the tenor of his acceptance;' that the drawer and drawee of the check were not the same in such sense as to charge the drawee with knowledge of the amount of the check, and that therefore the United States can recover as for money paid under a mistake of fact. The defendant urges several considerations on the other side, but...
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