United States v. Bank of America National Trust and Savings Association

The appellant bank cashed six Treasury checks and thereafter warranted the endorsements, presented the checks to the Treasury through the Federal Reserve Bank, and received payment on each of the checks from the Government. The Government subsequently sued the bank to recover the payments and prevailed. The bank appeals.

The issuance of the checks resulted from a fraudulent scheme on the part of the third-party defendants. These two men were enlisted personnel of the United States Navy, attached to the USS Coral Sea and performing duties in the vessel’s Disbursing Office. They knew of a shipmate who had recently been discharged from the Navy. One of them obtained the dischargee’s identification card and substituted his own photograph thereon. The two schemers then prepared and presented the Treasury checks, payable to the discharged man, to the ship’s Disbursing Officer. He signed the checks, and the defrauding seamen, forging the name of the payee and using the false identification card, were able to cash the checks at the bank.

The District Court rested its judgment upon National Metropolitan Bank v. United States, 323 U.S. 454 , 65 S.Ct. 354 , 89 L.Ed. 383 (1945), and we have…