Commercial Paper: Postal Money Orders Receive Negotiable Equality
![handle is hein.journals/mnlr52 and id is 1115 raw text is:
1968] CASE COMMENTS 1099
Although the Colgate court was aware of the undesirability
of adopting existing stereotypes as standards to be used in the
interpretation of Title VII's exception and the necessity of effect-
ing the purpose of Title VII through the elimination of undesir-
able motives as a basis for establishing a practice which comes
within the exception, the court has not effectively implemented
these policies. Further consideration must be given to refine its
application of these policies.
Commercial Paper: Postal Money Orders
Receive Negotiable Equality
Postal money order blanks were stolen from a post office
station, validated with an all purpose stamp, forged with the
initials of an issuing employee, and presented to defendant bank
for payment. The orders were ordinary on their face, and the
bank, in good faith, paid the thief and forwarded the orders to
the Federal Reserve Bank for reimbursement. The government
paid them as a matter of course. Upon discovery of the forgery,
the government demanded return of the money paid, which the
bank refused. On cross motions for summary judgment,1 the
federal district court held that there was no duty of restitution
if the bank paid value for orders ordinary on their face and re-
ceived payment without reason to know of the forgery and
lack of authorization. United States v. First National Bank, 263
F. Supp. 298 (D. Mass. 1967).
The general rule, originating in equity courts, is that a payor
may obtain restitution of money paid another if the payor was
deprived of the expected exchange because of his mistake of
fact as to some essential element of the contract.2 An excep-
1. The law determining the rights and obligations of persons
dealing with postal money orders is either federal statutory law or
federal common law. See Clearfield Trust Co. v. United States, 318
U.S. 363 (1943). In United States v. Cambridge Trust Co., Civil No.
60-319-W (D. Mass., March 24, 1961), the court suggested that some of
the sources for such judicially fashioned federal common law might
include state commercial law, the Negotiable Instruments Law, the Uni-
form Commercial Code, and the British statutes with respect to bills
and notes. See also United States v. Cambridge Trust Co., 300 F.2d 76
(1st Cir. 1962).
2. RESTATEMENT OF RESTITUTION § 15 (1937). The policy under-
lying this position is that where there has been a payment under mis-
take of fact, it would be inequitable to allow the recipient to retain the
benefit of the mistake, thereby unjustly enriching him. See, e.g., Peer-
less Glass Co. v. Pacific Crockery Co., 121 Cal. 641, 54 P. 101 (1898);
Strong v. Lane, 66 Minn. 94, 68 N.W. 765 (1896); Rackemann v. Riverbank
Imp. Co., 167 Mass. 1, 44 N.E. 990 (1896).](ViewImageLocal?handle=hein.journals/mnlr52&div=61&collection=&method=preview&ext=.png&size=3)
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Commercial Paper: Postal Money Orders Receive Negotiable Equality
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