United States Supreme Court Cases & Opinions

U.S. Supreme Court

National Metropolitan Bank v. United States, 323 U.S. 454 (1945)

National Metropolitan Bank v. United States

No. 161

Argued December 13, 14, 1944

Decided January 8, 1945

323 U.S. 454

Syllabus

1. Rights and liabilities on commercial paper issued by the Government are to be determined by federal, rather than local, law, and, in the absence of an applicable Act of Congress, the governing rules must be fashioned by the federal courts. P. 323 U. S. 456.

2. The Government is entitled to recover payments made to a collecting bank on government checks on which the bank had expressly guaranteed prior endorsements but on which the endorsements of the payees were forged, and recovery was not barred by the negligent failure of the Government to detect the fraud of a government clerk who, over a period of 28 months, had fraudulently procured issuance of the checks upon forged vouchers. United States v. Chase National Bank, 252 U. S. 485, distinguished. P. 323 U. S. 457.

3. Negligence of a drawer-drawee in failing to discover fraud prior to a guaranty of the genuineness of prior endorsements does not absolve the guarantor from liability where the prior endorsements have been forged. P. 323 U. S. 459.

142 F.2d 474 affirmed.

Certiorari, post, p. 692, to review the affirmance of a judgment for the United States in a Suit against the bank to recover payments made on government checks.