The Sumiton Bank, Plaintiff-appellant, v. Funding Systems Leasing Corporation, Defendant-appellee, 512 F.2d 774 (5th Cir. 1975)

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U.S. Court of Appeals for the Fifth Circuit - 512 F.2d 774 (5th Cir. 1975) May 8, 1975

Eugene D. Martenson, Birmingham, Ala., for plaintiff-appellant.

John H. Morrow, Stanley D. Bynum, Birmingham, Ala., for defendant-appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before BROWN, Chief Judge, and GODBOLD and CLARK, Circuit Judges.


The bank claims against the drawer of a check deposited with it. The check was order paper. The signature of the payee as purported indorser was forged. Below it was added the signature of another entity, which we will assume was an authorized signature.

The forged signature of the payee was inoperative to make the bank a holder,1  Code of Ala., Tit. 7A, §§ 1-201(20); 3-201; 3-202; 3-404 (1966); nor did the presumably valid second signature convert the order paper to bearer paper. See Code of Ala., Tit. 7A, §§ 3-201; 3-202(1), (2); 3-204(2); 3-404(1); 1-201(20) (1966).

The decision in favor of the drawer is affirmed.


Which makes it unnecessary for us to consider the bank's claim that it was a holder in due course and therefore took free of defenses of the drawer. See Code of Ala., Tit. 7A, §§ 3-302(1); 1-201(20) (1966)

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