United States v. McGovern
661 F.2d 27 (1981)
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Rule of Law:
Due to the unique contractual nature of traveler's checks, a purchaser cannot delegate the authority to sign them, and therefore, a signature by another person, even with the purchaser's consent, constitutes a 'false making' and forgery if done with fraudulent intent.
Facts:
- McGovern owed his co-conspirator, Scull, an $1,800 debt.
- To settle the debt and profit, McGovern purchased $2,400 in Citibank traveler's checks in Niagara Falls, New York.
- The purchase agreement McGovern signed required him to sign the checks upon purchase and countersign them only in the presence of the person cashing them.
- McGovern traveled to Erie, Pennsylvania, and authorized Scull to imitate his signature to cash the checks.
- Using McGovern's driver's license as identification, Scull impersonated McGovern and successfully cashed the $2,400 in checks at two banks and a store.
- McGovern then falsely reported to New York police and Citibank that the checks had been stolen from his car.
- Relying on his report, Citibank issued McGovern $2,400 in replacement checks.
Procedural Posture:
- McGovern and Scull were charged with violating 18 U.S.C. § 2314.
- The case was tried in the U.S. District Court for the Western District of Pennsylvania in a bench trial.
- The district court found both McGovern and Scull guilty of the offense.
- McGovern and Scull, as appellants, appealed their convictions to the United States Court of Appeals for the Third Circuit.
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Issue:
Does signing another's name on a traveler's check with the purchaser's permission, as part of a scheme to defraud the issuer and cashing businesses, constitute the transportation of a security with a 'forged countersignature' in violation of 18 U.S.C. § 2314?
Opinions:
Majority - Aldisert, Circuit Judge.
Yes. The appellants' conduct constituted a violation of the statute because signing another's name on a traveler's check, even with purported authority, is a forgery. The court reasoned that forgery under the statute adopts the common law definition, which requires a 'false making' with intent to defraud. While authorization can sometimes negate a 'false making', traveler's checks are unique. The purchase agreement explicitly denies the purchaser the right to authorize another to sign, rendering any such attempted delegation legally ineffective under agency law. Traveler's checks are accepted based on the issuer's credit and the conformity of signatures, a system undermined by representative signatures. Therefore, because McGovern had no authority to delegate the signing power, Scull's signature was an unauthorized 'false making' and, coupled with the clear intent to defraud, constituted common law forgery.
Analysis:
This decision carves out a significant exception to the general common law rule that authority to sign another's name is a defense to forgery. It establishes that the specific contractual terms of a financial instrument, like a traveler's check, can override this principle. By focusing on the non-delegable nature of the signature agreement, the court prioritized the integrity of traveler's checks as a commercial instrument and the reliance placed upon them by merchants and banks. The case serves as a precedent that the 'authorization' defense is unavailable where the instrument's legal efficacy is fundamentally dependent on a personal, non-transferable signature.
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