National Bank of Commerce v. United States

(after stating the facts as above).

[1 ] This is the second appeal. Counsel for appellant here say:

And they rely upon the provision of 2 Rem. & Bal. Code, § 3400, subd. 3, which reads:

It- is urged, therefore, that the checks' in question were, in a legal commercial sense, payable to bearer, imputing knowledge of the fact that the checks were payable to a fictitious person to the government, because it is assumed McCoy was its agent so to issue the checks. Thus predicating their argument, counsel further rely upon Phillips v. Mercantile National Bank of New York, 140 N. Y. 556 , 35 N. E. 982 , 23 L. R. A. 584, 37 Am. St. Rep. 596 , which it must be conceded is an analogous case, if counsel’s premises are well founded. But there is this obvious distinction between that case and this: The government is a party here, and not a private person, and the government had, through its Treasury Department, promulgated Department Circular No. 102, of which the defendant, being a national depository, was bound to take notice, and it must be assumed had knowledge, in the following language :

McCoy was a disbursing officer of the government, and of this fact the defendant also had…

(dissenting). There was evidence given tending-to show that a part of the money that the government deposited with- *684 the bank to McCoy’s credit, to- be disbursed by him in the course of his duties as the government’s agent, was’ actually expended by him in legitimate work done by him for the government, although drawn by him from the bank in a fraudulent manner, and there was also evidence given to the effect that the governmént, subsequent to the fraudulent acts of McCoy, caused him to be indicted, prosecuted, convicted, and imprisoned for the embezzlement of $5,718 of the moneys fraudulently withdrawn by him from the bank. Based upon that evidence the bank requested the trial court to instruct the jury, among other things:

The court below refused to give either of those instructions, but, on the contrary, directed a verdict for the government for the full amount claimed, which was returned, and to which action the bank reserved exceptions.

It must be remembered that the government’s' action in this case is against its depository, and not against McCoy, and I am unable to see that it has any legal or moral right to recover from the bank that portion of the money in question…