refusing to allow a fraud in the factum defense due to signatory’s negligence in failing to perform even a casual examination of the document, which would have revealed the fraud
How later courts described this case
- refusing to allow a fraud in the factum defense due to signatory’s negligence in failing to perform even a casual examination of the document, which would have revealed the fraud
- “dealt [with]” exception applies only to payees “so directly and personally involved with the disputed aspects of the transaction as to be charged with knowledge of any fraud or other irregularity”
- transferee of bona fide purchaser who was not directly and personally involved with disputed aspects of transaction takes instrument free of personal defenses such as fraud
- “The payee of an instrument in its possession is always a holder”
Written by the judges who cited it.
The opinion
Brown, J.
(concurring). Although I concur in the result reached by the majority, I am hard pressed to accept the notion that in such circumstances as presented here there must be an affirmative showing of “deliberately cultivated ignorance” on the part of the holder. See Schwegmann Bank & Trust Co. of Jefferson v. Simons, 880 F.2d 838, 842 (5th Cir. 1989). I deem TSB’s handling of the loan not “unorthodox” but negligent — plainly contrary to proper banking practices. Here, TSB certainly placed itself, by such an improvident choice, in a precarious position, whereby it was plainly vulnerable to fraud. After saying all that, I concur in the result because an experienced businessman (let alone a Harvard M.B.A.) surely ought to know that he assumes a risk when he “gets into bed” with someone, as well as to know he must first read “what he signs.” Parenthetically, if that imperative was not inculcated firmly at “business school,” he should be entitled to a refund of his tuition.
*659 Finally, I am compelled to point out that the bulk of the work product (i.e., research and analysis) evidenced in this opinion was done by the court. All too often this court is compelled to range far and wide from the parties’ briefs to reach what I believe is the correct and proper legal solution.