Clearfield Doctrine "Governments descend to the level of a mere private corporation, and take on the characteristics of a mere private citizen...where citizen...where private corporate commercial paper [Federal Reserve Notes] and and securities [checks] is is concern con cerned. ed. ... For purp purposes oses of suit suit,, such corporation corporations s and individuals individuals are rega regarded rded as ent entitie ities s enti entirely rely separate from government."
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Clearfield Trust Co. v. United States,
318 U.S. 363-371 (1942)
What the Clearfield Doctrine is Doctrine is saying is that when private coercial paper is paper is used by corporate corp orate !overne !ove rnent nt,, then "over "ov erne nent nt lose loses s its its #overei!nt$ #tat%# and becomes becomes no differen differentt than than a mere mere private corporation. corporation. As such such,, government or in your case a court! then becomes bound by the rules and laws that govern private corporation# whic which h means that if they intend to copel an individual individual to some #pecific perforan perforance ce based upon its corporate #tat%te# or holder der in due course course of a corporation r%le#, r%le# , then hen the !overnent !overnent,, like like any any private corporation, corporation , must must be the hol contra con tract ct or ot&er coercial a!reeent between it and the one upon whom demands for #pecific perforance are made and further, the government must be willing to enter the contract or coercial a!reeent into evidence before trying to get to the court to enforce its demands, called statutes. mhk#
THE CLEARFIELD DOCTRINE WAS DOCTRINE WAS RECORDED IN THE AMERICAN LAW REPORT OF 1938. THE DOCTRINE DOCTRINE EXPLAINS: ERIE RAILROAD COMPANY V. HARRY J. TOMPKINS . United States Supreme Court- Apri !"# $%&' (-U. S.- #'! L. ed. (Ad). *'*+# "' S. Ct.-.+ Courts. , &** dut o/ 0edera Courts to /oo1 State de2isions on matters o/ 3enera a1.
1. T4e P4rase 5a1s o/ t4e se)era states5 in states5 in t4e pro)ision o/ § 34 of the Feder! "#d$%$r& A%t o/ Se'te()er *4+ 1,89 # %h'. *-+ *8 .S.C.A. § ,*/ # t4at t4e a1s o/ t4e se)era tt# t#te te of the 0 0$te $ted d St Stte te states ates## except 14ere t4e Co0t$t#t$o0# tret$e# or or t ot4er1ise re6uire or pro)ide# s4a 7e re3arded as rues o/ de2ision in trias at COMMON LAW# IN THE COURTS O0 THE 0$ted Stte# in 2ases 14ere t4e app# 2annot 2onstitutiona 7e 2onstrued as e82udin3 in matters o/ 3enera 9urispruden2e t4e un1ritten a1 o/ t4e state as Tys! + 12 Pet. 1 1- L. ed. 82/+ OERRLED. de2ared 7 its 4i34est 2ourt. Swift v. Tys!+ Co((o0 L+ § *5 of 0t$o0. *. T4er T4ere e is no Feder! %o((o0 !# and Co06re 4as no po1er to de2are su7stanti)e rues o/ %o((o0 ! appi2a7e in a state# 14et4er t4e 7e o2a or 3enera in t4eir nature# 7e 7%o((o0 L+7 L+7 § / t4e %o((er%$! ! or a part o/ t4e ! of tort. See A. "#r. T$t!e 7%o((o0 R.C. R. C.L. L. t$ t$t! t!e e 7C 7Co( o((o (o0 0 L L. .7 7 § 4.; A' A''e 'e! !++ § 9, 9,25 25 remand remand /or /urt4er /urt4er 2onsider 2onsideratio ationnpropriet<<
e on t4e 24ara2teristi2s o/ a mere pri)ate 2iti?en... @4ere pri)ate 2orporate 2ommer2ia paper 0edera Reser)e Notes; and se2urities 24e2>s; is 2on2erned... 0or purposes o/ suit# su24 2orpo 2o rporat ration ions s an and d ind indi)i i)idu duas as ar are e re3 re3ard arded ed as ent entit ities ies ent entire ire sep separ arate ate /r /rom om 3o) 3o)ern ernmen ment. t. C"e#$fie"% T$&st C. v. '!ite% St#tes+ St#tes + 318 .S. 32353,1 :194*; :194*;. See Note. Note: Note: T4e C!erf$e!d Do%tr$0e is st#$e %ecisis( upon a 2ourts# 2ourts# and imposes t4at t4at an entit 2annot 2ompe per/orman2e per/orman2e upon its 2orporate statutes or 2orporation rues uness it# i>e an ot4er 2orporation# is t4e Hoder in Due Course o/ some 2ontra2t or 2ommer2ia a3reement 7et1een it# and t4e one on 14om
its demands /or per/orman2e are made# and is 1iin3 to produ2e said do2ument # and to pa2e t4e same into e)iden2e )efore trin3 to en/or2e its demands . (STARE DECISIS. n. Latin to stand 7 t4in3s de2idedB ; T4e do%tr$0e of 're%ede0t# under 14i24 it is ne2essar /or a 2ourt to /oo1 earier 9udi2ia de2isions 14en t4e same points arise a3ain in iti3ation. a2>s *t4.
318 .S. 323+ 318 .S. ,44+ 23 S.Ct. /,3+ 8, L.Ed. 838+ 4351 STC P 1-+-/1 S#'re(e Co#rt of the 0$ted Stte CLEARFIELD TRST CO. et !. <. NITED STATES. No. %F. Ar3ued and Su7mitted 0e7. "# $%&. De2ided Gar24 $# $%&. As Amended Gar. $"# $%&. On )$it f Ce$ti$#$i to t4e 0$ted Stte C$r%#$t Co#rt of A''e! /or t4e Th$rd C$r%#$t. A2tion 7 t4e 0$ted Stte of A(er$% a3ainst t4e C!erf$e!d Tr#t Co('0& to re2o)er t4e amount o/ a 24e2> on 14i24 '&ees name 4ad 7een /or3ed# 14erein t4e ". C. Pe00e& Co('0& inter)ened. A =#d6(e0t d$($$06 t4e 2ompaint 1as re
Aff$r(ed . @est Headnotes $; eCite Notes $*F 0edera Courts $*FJI State La1s as Rues o/ De2ision $*FJI(C+ Appi2ation to Parti2uar Gatters $*F>$ >. Corporations and Asso2iationsK an>s and Trust CompaniesK Se2urities. Gost Cited Cases (0ormer $F>&$+ @4ere %he%> dra1n on Tre#rer of the 0$ted Stte 1as issued /or ser)i2es per/ormed under Feder! E(er6e0%& Re!$ef A%t and 24e2> 1as paid on /or3ed indorsement o/ '&ees name# in a2tion 7 t4e 0$ted Stte to re2o)er amount o/ 24e2> /rom $0dorer # t4e r#!e o/ E$ie R. C. v. T*p+i!s 1as inappi2a7e . "#d.Code *4:1; # *8 .S.C.A. 41:1; K Feder! E(er6e0%& Re!$ef A''ro'r$t$o0 A%t of 193/ # 49 Stt. 11/# 1/ .S.C.A. ,*155,*8.
!; eCite Notes $*F 0edera Courts $*FJI State La1s as Rues o/ De2ision $*FJI(C+ Appi2ation to Parti2uar Gatters $*F>&& >. Ot4er Parti2uar Gatters. Gost Cited Cases (0ormer $F>&$+ T4e ri34ts and duties o/ t4e 0$ted Stte on %o((er%$! ''er 14i24 it issues are 3o)erned 7 feder! ! rat4er t4an !o%! !. Cr.Code+ 148# 18 .S.C.A. *2*.
&; eCite Notes &%& United States &%&JI 0is2a Gatters &%&>'% >. is and Notes in =enera. Gost Cited Cases In a7sen2e o/ an appi2a7e %t of Co06re /i8in3 ri34ts and duties o/ t4e 0$ted Stte on %o((er%$! ''er 14i24 it issues# it is /or t4e feder! %o#rt to /as4ion t4e 3o)ernin3 r#!e of ! a22ordin3 to t4eir o1n standards.
; eCite Notes $*F 0edera Courts $*FJI State La1s as Rues o/ De2ision $*FJI(A+ In =enera $*F>&* >. Gatters o/ =enera Murispruden2eK 0edera Common La1. Gost Cited Cases (0ormer $F>&*!($++ T4e feder! ! (er%h0t de)eoped under t4e re3ime o/ Swift v. Tys! represented 6e0er! %o((er%$! ! rat4er t4an a 24oi2e o/ a feder! r#!e desi3ned to prote2t a feder! r$6ht# 7ut it stands as a 2on)enient sour2e o/ re/eren2e /or /as4ionin3 feder! r#!e appi2a7e to feder! ?#et$o0 re3ardin3 ri34ts and duties o/ t4e 0$ted Stte on %o((er%$! ''er 14i24 it issues.
"; eCite Notes " is and Notes "X Pament and Dis24ar3e ">& >. Re2o)er o/ Paments. Gost Cited Cases &%& United States &%&JI 0is2a Gatters &%&>'% >. is and Notes in =enera. Gost Cited Cases @4ere 24e2> is paid on /or3ed indorsement o/ '&ees name# drees ri34t to re2o)er /rom $0dorer a22rues 14en t4e pament is made and t4e dree# 14et4er it 7e t4e 0$ted Stte or anot4er# is not 24ar3ea7e 1it4 >no1ed3e o/ t4e si3nature o/ t4e '&ee.
; eCite Notes " is and Notes "X Pament and Dis24ar3e ">& >. Re2o)er o/ Paments. Gost Cited Cases &%& United States &%&JI 0is2a Gatters &%&>'% >. is and Notes in =enera. Gost Cited Cases @4ere 24e2> is paid on /or3ed indorsement o/ '&ees name# prompt noti2e to $0dorer o/ drees dis2o)er o/ /or3er is !t a 52ondition pre2edent5 to drees suit to re2o)er# 7ut# i/ dree on earnin3 o/ /or3er does not 3i)e prompt noti2e o/ it and dama3e resuts# re2o)er 7
dree is 7arred and su24 r#!e appies 14ere t4e dree is t4e 0$ted Stte. eCite Notes *; &%& United States &%&JI 0is2a Gatters &%&>'% >. is and Notes in =enera. Gost Cited Cases T4e 0$ted Stte as dree o/ %o((er%$! ''er stands in ! d$ffere0t i34t t4an an ot4er dree.
'; eCite Notes " is and Notes "X Pament and Dis24ar3e ">& >. Re2o)er o/ Paments. Gost Cited Cases He 14o a22epts a 24e2> 1it4 /or3ed indorsement o/ '&ees name s4oud 7e ao1ed to s4i/t t4e oss to t4e dree on on a 2ear s4o1in3 t4at t4e drees dea in noti/in3 4im o/ t4e /or3er 2aused 4im dama3e.
%; eCite Notes " is and Notes "X Pament and Dis24ar3e ">& >. Re2o)er o/ Paments. Gost Cited Cases Gere dea on part o/ dree in 3i)in3 noti2e o/ /or3ed indorsement o/ '&ees name does not 7ar re2o)er 7 dree /rom $0dorer 14o a22epted t4e 24e2> on t4e /or3ed indorsement# 7ut to 7ar re2o)er dama3e o22asioned must 7e esta7is4ed and not e/t to 2on9e2ture.
$F; eCite Notes &%& United States &%&JI 0is2a Gatters &%&>'% >. is and Notes in =enera. Gost Cited Cases @4ere 24e2> dra1n on Tre#rer of the 0$ted Stte 1as issued /or ser)i2es per/ormed under Feder! E(er6e0%& Re!$ef A%t# dea o/ 0$ted Stte in 3i)in3 noti2e o/ /or3ed indorsement o/ '&ees name to $0dorer 14o a22epted /or3ed indorsement did not 7ar re2o)er 7 t4e 0$ted Stte 14ere e)iden2e did not esta7is4 t4at dea 2aused dama3e to $0dorer. Feder! E(er6e0%& Re!$ef A''ro'r$t$o0 A%t of 193/ # 49 Stt. 11/# 1/ .S.C.A. §§ ,*15,*8. ((,- (/0 Mr. P#! A. Fre#0d# o/ Wh$06to0+ D.C.# /or re'o0de0t . Mr. Roe!! De0 P$0e+ "r. # o/ Ne @or> C$t& # /or 'et$t$o0er.
Mr. "#t$%e DOLAS dei)ered t4e opinion o/ t4e Co#rt . On A'r$! *8+ 1932 # a 24e2> 1as dra1n on t4e Tre#rer of the 0$ted Stte t4rou34 t4e Feder! Reer of Ph$!de!'h$ to t4e order o/ C!$r A. Br0er in t4e amount o/ *4.*-. It 1as dated at Hrr$)#r6+ Pe00&!<0$ and 1as dra1n /or ser)i2es rendered 7
Br0er to t4e Wor> Pro6re Ad($0$trt$o0. T4e 24e2> 1as pa2ed in t4e mai addressed to Br0er at 4is address in M%>e&<$!!e+ P. Br0er ne)er re2ei)ed t4e 24e2>. Some un>no1n person o7tained it in a msterious manner and presented it to t4e ". C. Pe00e& Co. store in C!erf$e!d+ P.# representin3 t4at 4e 1as t4e '&ee and identi/in3 4imse/ to t4e satis/a2tion o/ t4e empoees o/ ". C. Pe00e& (/0, Co. He endorsed t4e 24e2> in t4e name o/ Br0er and trans/erred it to ". C. Pe00e& Co. in e824an3e /or %h and mer24andise. Br0er ne)er aut4ori?ed t4e endorsement nor parti2ipated in t4e pro2eeds o/ t4e 24e2>. ". C. Pe00e& Co. endorsed t4e 24e2> o)er to t4e C!erf$e!d Tr#t Co. 14i24 a22epted it as a3ent /or t4e purpose o/ 2oe2tion and endorsed it as /oo1s: Pa to t4e order o/ Feder! Reer of Ph$!de!'h$ # Prior Endorsements =uaranteed. 0N$; C!erf$e!d Tr#t Co. 2oe2ted t4e 24e2> /rom t4e 0$ted Stte t4rou34 t4e Feder! Reer of Ph$!de!'h$ and paid t4e /u amount t4ereo/ to ". C. Pe00e& Co. Neit4er t4e C!erf$e!d Tr#t Co. nor ". C. Pe00e& Co. 4ad an >no1ed3e or suspi2ion o/ t4e /or3er. Ea24 a2ted in 3ood /ait4. On or 7e/ore M& 1-+ 1932# Br0er ad)ised t4e t$(e>ee'er and t4e fore(0 o/ t4e W.P.A. 'ro=e%t on 14i24 4e 1as empoed t4at 4e 4ad not re2ei)ed t4e 24e2> in 6uestion. T4is in/ormation 1as du 2ommuni2ated to ot4er 6e0t o/ t4e 0$ted Stte and on No 1as a /or3er. No noti2e 1as 3i)en t4e C!erf$e!d Tr#t Co. or ". C. Pe00e& Co. o/ t4e /or3er unti "0#r& 1*+ 193,# at 14i24 time t4e C!erf$e!d Tr#t Co. 1as noti/ied. T4e /irst noti2e re2ei)ed 7 C!erf$e!d Tr#t Co. t4at t4e 0$ted Stte 1as as>in3 reim7ursement 1as on A#6#t 31+ 193,. 0N$ =uarantee o/ a prior indorsements on presentment /or pament o/ su24 a 24e2> to Feder! Reer or (e()er )0> de'o$tor$e is re6uired 7 Tre#r& Re6#!t$o0. 31 Code of Feder! Re6#!t$o0 *-*.3*+ *-*.33 .
T4is suit 1as instituted in 1939 7 t4e 0$ted Stte a3ainst t4e C!erf$e!d Tr#t Co. # t4e 9urisdi2tion o/ t4e feder! D$tr$%t Co#rt 7ein3 in)o>ed pursuant to t4e pro)isions o/ s *4:1; of the "#d$%$! Code# *8 .S.C. 41:1;# *8 .S.C.A. 41:1; . T4e 2ause o/ a2tion 1as 7ased on t4e e8press 3uarant o/ prior endorsements made 7 t4e C!erf$e!d Tr#t Co. (/00 ". C. Pe00e& Co. inter)ened as a de/endant. T4e 2ase 1as 4eard on 2ompaint# ans1er and stipuation o/ /a2ts. T4e D$tr$%t Co#rt 4ed t4at t4e ri34ts o/ t4e parties 1ere to 7e determined 7 t4e ! o/ Pe00&!<0$ and t4at sin2e t4e 0$ted Stte unreasona7 deaed in 3i)in3 noti2e o/ t4e /or3er to t4e C!erf$e!d Tr#t Co. # it 1as 7arred /rom re2o)er under t4e rue o/ M#$+et St$eet Tit"e 1 T$&st C. v. C2e"te! T. C.+ *92 P. *3-+ 14/ A. 848. It a22ordin3 d$($ed t4e 2ompaint. On appea t4e C$r%#$t Co#rt of A''e! re
$; !; &; @e a3ree 1it4 t4e C$r%#$t Co#rt of A''e! t4at t4e rue o/ ((,-, E$ie R. C. v. T*p+i!s+ 3-4 .S. 24+ /8 S.Ct. 81,+ 8* L.Ed. 1188+ 114 A.L.R. 148,+ doe !t ''!& to t4is a2tion. T4e ri34ts and duties o/ t4e 0$ted Stte on %o((er%$! ''er 14i24 it issues are 3o)erned 7 feder! rat4er t4an !o%! ! . @4en t4e 0$ted Stte dis7urses its /unds or pas its de7ts# it is e8er2isin3 a %o0t$t#t$o0! f#0%t$o0 or po1er. T4is 24e2> 1as issued /or ser)i2es per/ormed under t4e Feder! E(er6e0%& Re!$ef A%t of 193/ # 49 Stt. 11/# 1/ .S.C.A. ,*155,*8. T4e aut4orit to issue t4e 24e2> 4ad its ori3in in t4e Co0t$t#t$o0 and t4e tt#te o/ t4e 0$ted Stte and 1as i! ! w#y dependent on t4e ! o/ Pe00&!<0$ or o/ 0& other tte. C/. 5#$% f C**issi!e$s v. '!ite% St#tes+ 3-8 .S. 343+ 2- S.Ct. *8/+ 84 L.Ed. 313 Ry#" I!%e*!ity C. v. '!ite% St#tes+ 313 .S. *89+ 21 S.Ct. 99/+ 8/ L.Ed. 1321. T4e duties imposed upon t4e 0$ted Stte and t4e ri34ts a26uired 7 it as a resut o/ t4e issuan2e /ind t4eir roots in t4e same /edera sour2es. 0N!; C/. Deit$ic+ v. 6$e#!ey + 3-9 .S. 19-+ 2- S.Ct. 48-+ 84 L.Ed. 294 (/0- D7Oe!c28
D&2*e 1 C. v. 4e%e$#" Depsit I!s. C$p.+ 31/ .S. 44,+ 2* S.Ct. 2,2+ 82 L.Ed. 9/2. In a7sen2e o/ an appi2a7e A%t of Co06re it is /or t4e feder! %o#rt to /as4ion t4e 3o)ernin3 r#!e of ! a22ordin3 to t4eir o1n standards. '!ite% St#tes v. 6&#$#!ty T$&st C.+ *93 .S. 34-+ // S.Ct. **1+ ,9 L.Ed. 41/+ 9/ A.L.R. 2/1+ is not opposed to t4is resut. T4at 2ase 1as 2on2erned 1it4 a 2on/i2t o/ a1s rue as to t4e tite a26uired 7 a tr0feree in @#6o!<$ under a /or3ed endorsement. Sin2e t4e paees address 1as @#6o!<$# t4e 24e2> 4ad somet4in3 o/ t4e 6uait o/ a /orei3n 7i and t4e ! o/ @#6o!<$ 1as appied to determine 14at tite t4e tr0feree a26uired. 0N! Jarious Tre#r& Re6#!t$o0 3o)ern t4e pament and endorsement o/ 6o and 1arrants and t4e reim7ursement o/ t4e Tre#rer of the 0$ted Stte 7 Feder! Reer and (e()er )0> de'o$tor$e on pament o/ %he%> or 1arrants 7earin3 a /or3ed endorsement. See 31 Code of Feder! Re6#!t$o0 *-*.-+ *-*.3*55 *-*.34. 0or3er o/ t4e 24e2> 1as an o//ense a3ainst t4e 0$ted Stte. Cr$($0! Code 148 # 18 .S.C. *2* # 18 .S.C.A. *2*.
; In our 24oi2e o/ t4e appi2a7e feder! r#!e 1e 4a)e o22asiona see2ted state a1. See Ry#" I!%e*!ity C. v. '!ite% St#tes+ #'r. ut reasons 14i24 ma ma>e tte ! at times t4e appropriate feder! r#!e are sin3uar inappropriate 4ere. T4e issuan2e o/ %o((er%$! ''er 7 t4e 0$ted Stte is on a )ast s2ae and transa2tions in t4at paper /rom issuan2e to pament 1i 2ommon o22ur in se)era states. T4e appi2ation o/ tte !# e)en 1it4out t4e 2on/i2t o/ a1s rues o/ t4e /orum# 1oud su79e2t t4e ri34ts and duties o/ t4e 0$ted Stte to e82eptiona un2ertaint. It 1oud ead to 3reat di)ersit in resuts 7 ma>in3 identi2a transa2tions su79e2t to t4e )a3aries o/ t4e a1s o/ t4e se)era states. T4e desira7iit o/ a uni/orm rue is pain. And 14ie t4e feder! ! (er%h0t de)eoped /or a7out a 2entur under t4e re3ime o/ Swift v. Tys!+ 12 Pet. 1+ 1- L.Ed. 82/+ represented 6e0er! %o((er%$! ! rat4er t4an a 24oi2e o/ a feder! r#!e desi3ned to prote2t a feder! r$6ht# it ne)ert4eess stands as a 2on)enient sour2e o/ re/eren2e /or /as4ionin3 feder! r#!e appi2a7e to t4ese feder! ?#et$o0.
'!ite% St#tes v. N#ti!#" Exc2#!9e 5#!+ + *14 .S. 3-*+ *9 S.Ct. 22/+ /3 L.Ed. "; 1--2+ 12 A00.C. 1184+ /as in t4at 2ate3or. T4e Co#rt 4ed t4at t4e 0$ted (/0: Stte 2oud re2o)er as dra1ee /rom one 14o presented /or pament a pension %he%> on 14i24 t4e name o/ t4e '&ee 4ad 7een /or3ed# in spite o/ a protra2ted dea on t4e part o/ t4e 0$ted Stte in 3i)in3 noti2e o/ t4e /or3er. T4e Co#rt /oo1ed Le#t2e$ Mf$s.7 5#!+ v. Me$c2#!ts 5#!+ + 1*8 .S. *2+ 9 S.Ct. 3+ 3* L.Ed. 34*+ 14i24 4ed t4at t4e ri34t o/ t4e dree a3ainst one 14o presented a 24e2> 1it4 a /or3ed endorsement o/ t4e '&ees name a22rued at t4e date o/ pament and 1as not dependent on noti2e or demand. T4e t4eor o/ t4e N#ti!#" Exc2#!9e 5#!+ 2ase is t4at 4e 14o presents a %he%> /or pament 1arrants t4at 4e 4as t$t!e to it and t4e r$6ht to re2ei)e pament. 0N&; I/ 4e 4as a26uired ((,-0 t4e %he%> t4rou34 a /or3ed endorsement# t4e rr0t& is 7rea24ed at t4e time t4e %he%> is 2as4ed. See M#!&f#ct&$e$s7 T$&st C. v. H#$$i*#! N#t. 5#!+ T$&st C.+ 142 M$%. //1+ *2* [email protected]. 48* 5e$9*#! v. Ave!&e St#te 5#!+ + *84 I!!.A''. /12+ 1 N.E.*d 43*. T4e t4eor o/ t4e rr0t& 4as 7een 24aen3ed. A(e+ T2e Dct$i!e f P$ice v. Ne#" + 4 Hr<.L.Re<.+ *9,+ 3-1553-*. It 4as 7een ur3ed t4at t4e ri34t to re2o)er is a ?#$ %o0tr%t#! r$6ht# restin3 upon t4e do2trine t4at one 14o 2on/ers a 7ene/it in misreian2e upon a ri34t or dut is entited to restitution. Woodrd+ ;&#si C!t$#cts :1913; 8-K 4i$st N#t. 5#!+ v. City N#t. 5#!+ + 18* M. 13-+ 134+ 2/ N.E. *4+ 94 A(.St.Re'. 23,. ut 14ate)er t4eor is ta>en# 1e ad4ere to t4e 2on2usion o/ t4e N#ti!#" Exc2#!9e 5#!+ 2ase t4at t4e drees ri34t to re2o)er a22rues 14en t4e pament is (/0< made. T4ere is no ot4er 7arrier to t4e maintenan2e o/ t4e 2ause o/ a2tion. T4e t4eor o/ t4e drees responsi7iit 14ere t4e drers si3nature is /or3ed ( P$ice v. Ne#"e+ 3 B#rr. 13/4 K '!ite% St#tes v. C2#se N#t. 5#!+ + */* .S. 48/+ 4- S.Ct. 321+ 24 L.Ed. 2,/+ 1- A.L.R. 14-1; is inappi2a7e 4ere. T4e dree# 14et4er it 7e
t4e 0$ted Stte or anot4er# is not 24ar3ea7e 1it4 t4e >no1ed3e o/ t4e si3nature o/ t4e paee. '!ite% St#tes v. N#ti!#" Exc2#!9e 5#!+ + #'r+ *14 .S. t '6e 31,+ *9 S.Ct. t '6e 229+ /3 L.Ed. 1--2+ 12 A00.C. 1184 St#te v. 5$#%w#y N#t. 5#!+ + 1/3 Te00. 113+ *8* S.W. 194 . 0N& @e need not determine 14et4er t4e 3uarantee o/ prior endorsements adds to t4e drees ri34ts. See Br000 Ne9ti#="e I!st$&*e!ts L#w :2th ed.; ''. 33-55331+ 8125581, K 4i$st N#t. 5#!+ v. City N#t. 5#!+ + 18* M. 13-+ 134+ 2/ N.E. *4+ 94 A(.St.Re'. 23,. C/. H*e I!s. C. v. Me$c#!ti"e T$&st C.+ *19 Mo.A''. 24/+ *84 S.W. 834. Under t4e t4eor o/ t4e N#ti!#" Exc2#!9e 5#!+ 2ase# t4e rr0t& o/ t4e t$t!e o/ 4im 14o presents t4e %he%> /or pament 1oud 7e impied in an e)ent. See P2i"#%e"p2i# N#t. 5#!+ v. 4&"t! N#t. 5#!+8 D.C.+ */ F.*d 99/+ 99,.
; *; '; %; $F; T4e N#ti!#" Exc2#!9e 5#!+ 2ase 1ent no /urt4er t4an to 4od t4at prompt noti2e o/ t4e dis2o)er o/ t4e /or3er 1as !t a 2ondition pre2edent to suit. It did not rea24 t4e 6uestion 14et4er a2> o/ prompt noti2e mi34t 7e a de/ense. @e t4in> it ma. I/ it is s4o1n t4at t4e dree on earnin3 o/ t4e /or3er did not 3i)e prompt noti2e o/ it and t4at dama3e resuted# re2o)er 7 t4e dree is 7arred. See L#%% 1 Ti"t! 5#!+ v. '!ite% St#tes+ 9 C$r.+ 3- F.*d 334 '!ite% St#tes v. N#ti!#" Rc+"#!% 5#!+8 D.C. + 3/ F.S#''. 91* '!ite% St#tes v. N#ti!#" City 5#!+8 D.C.+ *8 F.S#''. 144. T4e /a2t t4at t4e dra1ee is t4e 0$ted Stte and t4e !%he t4ose o/ its empoees are not materia. C+e v. '!ite% St#tes+ 91 .S. 389+ 398+ *3 L.Ed. *3,. T4e 0$ted Stte as dra1ee o/ %o((er%$! ''er stands in no di//erent i34t t4an an ot4er dree. As stated in '!ite% St#tes v. N#ti!#" Exc2#!9e 5#!+ + *,- .S. /*,+ /34+ 42 S.Ct. 388+ 389+ ,- L.Ed. ,1,+ T4e 0$ted Stte does 7usiness on 7usiness terms. It is not e82epted /rom t4e 3enera rues 3o)ernin3 t4e ri34ts and duties o/ dra1ees 7 t4e ar3eness o/ its deain3s and its 4a)in3 to empo a3ents to do 14at i/ done 7 a prin2ipa in person 1oud ea)e no room /or dou7t. I%.+ *,- .S. t '6e /3/+ 42 S.Ct. t '6e 389+ ,- L.Ed. ,1,. ut t4e dama3e o22asioned 7 t4e dea must 7e esta7is4ed and not e/t to 2on9e2ture. Cases su24 as M#$+et St. Tit"e 1 T$&st C. v. C2e"te! T$&st C. # #'r# pa2e t4e 7urden on t4e dree o/ 3i)in3 prompt noti2e o/ t4e /or3er-- $0=#r& to the defe0d0t )e$06 're#(ed )& the (ere f%t of de!& . See L!%! 1 Rive$ P"#te (/-> 5+. v. 5#!+ f Live$p" # :1892; 1 .B. ,. ut 1e do not t4in> t4at 4e 14o a22epts a /or3ed si3nature o/ a '&ee deser)es t4at pre/erred treatment. It is 4is !e9"ect or e$$$ in a22eptin3 t4e for6ers si3nature 14i24 o22asions t4e oss. See 5#!+ f C**e$ce v. '!i! 5#!+ + 3 N.@. *3-+ *32. He s4oud 7e ao1ed to s4i/t t4at oss to t4e dree on on a 2ear s4o1in3 t4at t4e drees dea in noti/in3 4im o/ t4e /or3er 2aused 4im dama3e. See Woodrd+ ;&#si C!t$#cts :1913; */. No su24 dama3e 4as 7een s4o1n 7 C!erf$e!d Tr#t Co. 14o so /ar as appears 2an sti re2o)er /rom ". C. Pe00e& Co. T4e on s4o1in3 on t4e part o/ t4e atter is 2ontained in t4e stipuation to t4e e//e2t t4at i/ a %he%> 2as4ed /or a 2ustomer is returned unpaid or /or re2amation a s4ort time a/ter t4e date on 14i24 it is 2as4ed# t4e e('!o&ee 2an o/ten o2ate t4e person 14o 2as4ed it. It is /urt4er stipuated t4at 14en ". C. Pe00e& Co. 1as noti/ied o/ t4e /or3er in t4e present 2ase none o/ ((,-- its e('!o&ee 1as a7e to remem7er ant4in3 a7out t4e transa2tion or %he%> in 6uestion. T4e in/eren2e is t4at t4e more prompt t4e noti2e t4e more i>e t4e dete2tion o/ t4e for6er. ut t4at /as s4ort o/ a s4o1in3 t4at t4e dea 2aused a mani/est oss. T2i$% N#t. 5#!+ v. Me$c2#!ts7 N#t. 5#!+ + ,2 H#0 4,/+ *, [email protected]. 1-,-. It is 7ut anot4er 1a o/ sain3 t4at mere dea is enou34. Aff$r(ed.
Mr. "#t$%e MRPH@ and Mr. "#t$%e RTLEDE d$d !t 'rt$%$'te in t4e 2onsideration or de2ision o/ t4is 2ase. .S. 1943.
CLEARFIELD TRST CO. <. NITED STATES 318 .S. 323+ 318 .S. ,44+ 23 S.Ct. /,3+ 8, L.Ed. 838+ 4351 STC P 1-+-/1 END OF DOCMENT
