United States v. Pauling , 60 M.J. 91 ( 2004 )

IN THE CASE OF
UNITED STATES, Appellee
v.
Michael A. PAULING, Specialist
U.S. Army, Appellant
No. 02-0603
Crim. App. No. 9700685
United States Court of Appeals for the Armed Forces
Argued October 21, 2003
Decided July 1, 2004
GIERKE, J., delivered the opinion of the Court, in which
CRAWFORD, C.J., and EFFRON J., joined. ERDMANN, J., filed a
separate opinion concurring in part and dissenting in part.
BAKER, J., filed a separate dissenting opinion.
Counsel
For Appellant: Captain Craig A. Harbaugh (argued); Colonel
Robert D. Teetsel, Lieutenant Colonel Mark Tellitocci, Major
Allyson G. Lambert (on brief); Colonel Adele H. Odegard,
Lieutenant Colonel E. Allen Chandler, Jr., Major Imogene M.
Jamison, and Captain Mary E. Card.
For Appellee: Captain Charles C. Choi (argued); Colonel Lauren
B. Leeker, Lieutenant Colonel Margaret B. Baines, and Major
Theresa A. Gallagher (on brief).
Military Judge: R. J. Hough
This opinion is subject to editorial correction before final publication.
United States v. Pauling, No. 02-0603/AR
Judge GIERKE delivered the opinion of the Court.
This case concerns how to charge a “double forgery,” which
occurs where a check has both “a forged payor signature and a
forged indorsement.” Black’s Law Dictionary 661 (7th ed. 1999).
Forging a drawer’s signature on a check violates Article 123,
Uniform Code of Military Justice [hereinafter UCMJ], 10 U.S.C. §
923 (2000). Forging an indorser’s signature on a check also
violates Article 123. Where both the drawer’s signature and the
indorser’s signature are forged on the same check, has one
forgery offense occurred or two? We hold that the Government
may properly charge a “double forgery” as two separate offenses.
I. BACKGROUND
A. Case History
In accordance with Appellant’s guilty pleas, a general
court-martial convicted him of making a false official
statement, two specifications of larceny, and two specifications
of forgery, in violation of Articles 107, 121, and 123, UCMJ, 10
U.S.C. §§ 907, 921, and 923 (1994). A panel of officer and
enlisted members sentenced him to a bad-conduct discharge,
confinement for three years, total forfeiture of pay and
allowances, and reduction to the lowest enlisted grade. The
convening authority approved the sentence as adjudged.
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United States v. Pauling, No. 02-0603/AR
The Army Court of Criminal Appeals affirmed the findings
and sentence in a divided unpublished opinion.1 We granted
review to determine whether separately charging the forgery of
the drawer’s signature and forgery of the indorser’s signature
on the same check violates the prohibitions against multiplicity
or the unreasonable multiplication of charges.2
B. Facts
Appellant was charged with forging 16 checks.3 He made 12
of the checks payable to himself and four payable to his wife.
One specification charged him with forging the writing on the
front of the checks, including the drawer’s signatures. A
separate specification charged him with forging his wife’s
1
United States v. Pauling, No. 9700685, slip op. (A. Ct. Crim.
App. July 15, 1999) (per curiam) (mem.).
2
The granted issues are:
I. WHETHER THE LOWER COURT ERRED IN REFUSING TO FIND
SPECIFICATION 1 OF CHARGE II (FORGERY) MULTIPLICIOUS
WITH SPECIFICATION 2 (FORGERY) OF THE SAME CHARGE WHEN
BOTH SPECIFICATIONS ADDRESSED THE SAME FORGED CHECKS.
II. WHETHER THE LOWER COURT ERRED IN REFUSING TO FIND
SPECIFICATION 1 OF CHARGE III AS AN UNREASONABLE
MULTIPLICATION OF SPECIFICATION 2 OF THE SAME CHARGE.
3
The checks were drawn on a credit union. At one time, arcane
distinctions existed between a “share draft” drawn on a credit
union and a “check.” See United States v. Eatmon, 47 M.J. 534,
536 n.2 (A.F. Ct. Crim. App. 1997), aff’d, 49 M.J. 273 (C.A.A.F.
1998). However, the law of negotiable instruments now includes
share drafts within the definition of checks. See U.C.C. § 3-
104 cmt. 4 (amended 2002).
3
United States v. Pauling, No. 02-0603/AR
signature as the indorser on the four checks made payable to
her.
Before entering pleas, the defense moved to dismiss the
specification alleging the forged indorsements, arguing that it
was multiplicious with the specification alleging forgery of the
writing on the front of the checks. Citing our opinion in
United States v. Weymouth, 43 M.J. 329 (C.A.A.F. 1995), the
defense counsel offered three rationales: (1) the specification
alleging the forged checks “covers” the specification alleging
the forged indorsements; (2) the two specifications apply to
misconduct that was “substantially one transaction”; and (3)
“this is just simply multiplication of charges.” The military
judge deferred ruling on the motion. Appellant then pleaded
guilty to all of the charges and specifications.
After the providence inquiry, the military judge ruled that
the two specifications at issue were multiplicious for
sentencing purposes, but not for findings purposes. This
reduced the maximum authorized period of confinement from 115
years to 95 years. After that ruling, Appellant indicated his
continued desire to plead guilty. The military judge then
entered findings of guilty to all charges and specifications.
During the providence inquiry, Appellant explained that he
acquired possession of the checkbook of his civilian roommate,
Little Joe M. Sandoval. Appellant forged 12 of the checks
4
United States v. Pauling, No. 02-0603/AR
payable to himself and, without his estranged wife’s knowledge,
made four payable to her. He explained that he made some
payable to his wife “so I wouldn’t have so many in my name.” He
indorsed the four checks with his wife’s forged signature and
successfully negotiated them at a federal credit union in
Colorado. Appellant agreed with the military judge that this
could have resulted in his wife’s “financial legal liability”
for the money he received.
II. DISCUSSION
A. Multiplicity
When Appellant forged Mr. Sandoval’s signature as the
drawer of the four checks at issue, he clearly violated Article
123 because those signatures, if genuine,4 would make Mr.
Sandoval legally liable to pay the amounts stated on the checks.
See Manual for Courts-Martial, United States (2002 ed.), Part
IV, para. 48.(b).(1) [hereinafter MCM] (setting out the elements
of forgery). When Appellant signed his wife’s name as the
apparent indorser of the four checks at issue, he also clearly
4
Under Article 123, forgery occurs where a person falsely makes
a signature under circumstances where the forged signature, if
it were genuine, would apparently impose a legal liability on
another. “In military law, as in the civilian criminal law,
actual legal liability of the person whose signature is forged
to a document is not required; all that is necessary is that
legal liability would ‘apparently’ result if the signature were
genuine.” United States v. Uhlman, 1 M.J. 419, 421 (C.M.A.
1976) (Cook, J., dissenting).
5
United States v. Pauling, No. 02-0603/AR
violated Article 123 because had her signature been genuine, the
governing state law would have obligated her to pay the face
amount of the check if it was dishonored. See Colo. Rev. Stat.
Ann. § 4-3-415 (West Supp. 2003); see also United States v.
Faircloth, 43 M.J. 711, 717 (A.F. Ct. Crim. App. 1995) (Becker,
J., concurring), rev’d on other grounds, 45 M.J. 172 (C.A.A.F.
1996). Thus, Appellant could have been charged with forging
either the writing on the front of the checks or the
indorsements. The question in this case is whether he could be
found guilty of both.
Double forgeries “are not uncommon, because a criminal
forging the drawer’s signature and hoping to escape detection is
unlikely to make the bogus check payable to himself or herself.
Therefore, many forged checks are made payable to third parties
whose endorsements are then also forged, creating a double
forgery.” Alvin C. Harrell, Impact of Revised UCC Articles 3
and 4 on Forgery and Alteration Scenarios, 51 Consumer Fin. L.Q.
Rep. 232, 239-40 (1997). Despite the common nature of double
forgery, the issue of whether an accused may be separately
convicted of forging a drawer’s signature and an indorsement on
the same check is a question of first impression in the military
justice system.
An unconditional guilty plea waives a multiplicity issue
unless the offenses are “‘facially duplicative,’ that is,
6
United States v. Pauling, No. 02-0603/AR
factually the same.” United States v. Lloyd, 46 M.J. 19, 23
(C.A.A.F. 1997) (citations omitted). Whether two offenses are
facially duplicative is a question of law that we will review de
novo. Cf. United States v. Palagar, 56 M.J. 294, 296 (C.A.A.F.
2002) (issue of whether offenses are greater and lesser-included
offenses is question of law subject to de novo review). Two
offenses are not facially duplicative if each “requires proof of
a fact which the other does not.” United States v. Hudson, 59
M.J. 357, 359 (C.A.A.F. 2004) (quoting Blockburger v. United
States, 284 U.S. 299, 304 (1932)). Rather than constituting “a
literal application of the elements test,” determining whether
two specifications are facially duplicative involves a realistic
comparison of the two offenses to determine whether one is
rationally derivative of the other. Id. (citing United States
v. Foster, 40 M.J. 140, 146 (C.M.A. 1994)). This analysis turns
on both “the ‘factual conduct alleged in each specification’”
and “the providence inquiry conducted by the military judge at
trial.” Id. (quoting United States v. Harwood, 46 M.J. 26, 28
(C.A.A.F. 1997)).
In this case, Appellant entered an unconditional plea of
guilty and persisted with that plea after the military judge
denied the defense’s multiplicity motion. Accordingly, we will
find multiplicity only if the specification alleging forgery of
7
United States v. Pauling, No. 02-0603/AR
the checks facially duplicates the specification alleging
forgery of the indorsements.
The two specifications are not facially duplicative.
Rather, they separate the information on the front of the
checks, which is expressly alleged in one specification, from
the indorsements forged on their backs, which is alleged in
another. As the Army Court of Criminal Appeals noted, “the
precise language of the specification” alleging forgery of the
checks “includes only the check numbers, dates, payees, amounts
and payors, but not the endorsement signatures.” Pauling, No.
9700685, slip op. at 4. The specification alleging forgery of
the checks does include Mrs. Pauling’s name as the relevant
checks’ payee. However, the other specification alleges the
factually distinct act of forging her signature as the indorser.
We agree with those state courts that have recognized forgery of
an indorsement as not only factually distinct, but also legally
distinct from forgery of the check itself.5 A double forgery
5
See, e.g., Brown v. State, 7 So.2d 28, 28 (Ala. 1942)
(recognizing that an indorsement is a separate contract from the
instrument and holding that “forgery of an instrument is a
different offense from the forgery of an indorsement of it”);
State v. Waterbury, 110 N.W. 328, 328 (Iowa 1907) (“The check
was a complete instrument without the indorsements. These
formed no part of it, but were distinct contracts.”); Green v.
State, 363 A.2d 530, 532 (Md. Ct. Spec. App. 1976) (“under the
[Maryland forgery] statute, forgery of an indorsement on any of
certain specified instruments is, or at least can be, a
separately indictable crime”); Miller v. People, 52 N.Y. 304,
305 (1873) (“The check was a complete instrument without the
indorsement. The indorsement did not form part of the check, but
8
United States v. Pauling, No. 02-0603/AR
creates two victims. Forging Mr. Sandoval’s name as the drawer
imposed an apparent legal liability on him to pay the face
amount of the check. Additionally, under the law of the
jurisdiction where the checks were negotiated,6 the indorser is
obligated to pay a check’s face amount in the event of dishonor.
The risk that such an obligation will arise is particularly high
where a check bears a forged drafter’s signature, thus providing
a basis for its dishonor. Forging Mrs. Pauling’s name as the
check’s indorser therefore imposed an apparent legal liability
on her, as well. Holding that forgery of the drawer’s signature
is multiplicious with forgery of the indorser’s signature would
ignore one of the double forgery’s two victims.
was a distinct contract.”); State v. Daye, 208 S.E.2d 891, 893
(N.C. App. 1974) (uttering a forged check and uttering a forged
indorsement “are separate and distinct felonies”); Cochran v.
State, 30 S.W.2d 316 (Tex. Crim. App. 1930) (holding that
because an indorsement on the back of a check does “not
constitute a part of” the check itself, charging the forgery of
one but proving the forgery of the other resulted in a fatal
variance). Contra see, e.g., People v. Connell, 414 N.E.2d 796(Ill. App. 1980) (holding that in the context of the forgery
statute, the term “makes” includes the term “endorses” because
without indorsement, a check cannot be cashed); State v. Hearn,
154 N.E. 244, 245 (Ohio 1926); State v. Smart, No. 76AP-397,
1976 Ohio App. LEXIS 7553 (Ohio Ct. App. Oct. 21, 1976) (holding
that forging drawer’s name on check, forging indorser’s name on
check, and uttering the forged check constituted “the same
conduct” and could support conviction of only one offense);
Sprouse v. Commonwealth, 81 Va. 374, 378 (1886) (treating double
forgery as “one transaction – a forgery”).
6
See Col. Rev. Stat. Ann. § 4-3-415 (West Supp. 2003). This
statute is a virtually verbatim duplicate of the official
Uniform Commercial Code’s text. See U.C.C. § 3-415 (1993).
9
United States v. Pauling, No. 02-0603/AR
As Appellant demonstrated all too well, negotiating a
forged check can be accomplished with or without a forged
indorsement. Attempting to deceive by falsely indorsing a check
with an actual person’s name7 subjects that person to apparent
financial liability, thereby satisfying all of the elements of
forgery. See MCM, Part IV, para. 48.(b).(1). Such a false
indorsement could also lead law enforcement authorities to
suspect an innocent person of having forged the check itself.
For example, in this case Appellant’s misdeeds resulted in law
enforcement officials interviewing his wife, fingerprinting her,
obtaining handwriting exemplars from her, and taking her sworn
statement.
Accordingly, we decline to establish a “two forgeries for
the price of one” rule.
B. Unreasonable Multiplication of Charges
Appellant also complains that charging the forged
indorsements in a separate specification from the forgery of the
writing on the front of the checks resulted in an unreasonable
multiplication of charges. “What is substantially one
transaction should not be made the basis for an unreasonable
multiplication of charges against one person.” Rule for Courts-
7
In this case, we need not and do not address the multiplicity
implications of signing a fictitious name as the indorser on a
check bearing a forged drawer’s signature.
10
United States v. Pauling, No. 02-0603/AR
Martial 307(c)(4) discussion. “Unreasonable multiplication of
charges is reviewed for an abuse of discretion.” United States
v. Monday, 52 M.J. 625, 628 n.8 (A. Ct. Crim. App. 1999). See
also United States v. Quiroz, 55 M.J. 334, 338 (C.A.A.F. 2001).
We have endorsed a five-part test for determining whether
the Government has unreasonably multiplied charges:
(1) Did the accused object at trial that there was an
unreasonable multiplication of charges and/or
specifications?
(2) Is each charge and specification aimed at
distinctly separate criminal acts?
(3) Does the number of charges and specifications
misrepresent or exaggerate the appellant’s
criminality?
(4) Does the number of charges and specifications
unreasonably increase the appellant’s punitive
exposure?
(5) Is there any evidence of prosecutorial
overreaching or abuse in the drafting of the charges?
See Quiroz, 55 M.J. at 338 (approving with modification test
established by United States v. Quiroz, 53 M.J. 600, 607 (N-M.
Ct. Crim. App. 2000)). These factors must be balanced, with no
single factor necessarily governing the result.
11
United States v. Pauling, No. 02-0603/AR
Even assuming that the defense counsel satisfied the first
Quiroz criterion when he objected that “this is just simply
multiplication of charges,” the defense has not satisfied any of
the other four Quiroz criteria.
Regarding the second Quiroz criterion, we have already
concluded that the specification alleging forgery of the writing
on the front of the checks was aimed at distinctly separate
criminal acts from the specification alleging forgery of the
indorsements.
Nor can Appellant meet the third Quiroz criterion, which
considers whether the charges exaggerate his criminality. On
the contrary, charging the forgery of 16 checks and four
indorsements in two specifications was a fair and reasonable
exercise of prosecutorial discretion.
In this case, charging the forged indorsements in a
separate specification did not implicate the fourth Quiroz
criterion concerning increased punitive exposure. The military
judge held that the two specifications were multiplicious for
sentencing purposes and adjusted the maximum punishment
accordingly.8 See United States v. McKinley, 27 M.J. 78, 80
8
While not within the scope of the issues before us, we note
that the military judge did not deliver, nor did the defense
request, an instruction that the forgery of the four
indorsements merged with the forgery of the relevant checks for
sentencing purposes. See United States v. Holsworth, 7 M.J.
184, 187 (C.M.A. 1979).
12
United States v. Pauling, No. 02-0603/AR
(C.M.A. 1988) (treating military judge’s instructions as law of
the case).
Finally, nothing in the record suggests prosecutorial
abuse, the fifth Quiroz criterion. This was not a case of
“unreasonable multiplication of charges by creative drafting.”
United States v. Morrison, 41 M.J. 482, 484 n.2 (C.A.A.F. 1995).
Rather, this was a case of appropriately charging Appellant’s
overly-creative criminal activity.
III. CONCLUSION
The decision of the United States Army Court of Criminal
Appeals is affirmed.
13
United States v. Pauling, 02-0603/AR
ERDMANN, Judge (concurring in part and dissenting in part):
I concur with the majority that the forgery specifications
are not multiplicious for findings. Under the test established
in Blockburger v. United States, 284 U.S. 299 (1932) and adopted
by this Court in United States v. Teters, 37 M.J. 370 (C.M.A.
1993), the forgery of the payor’s signature on the front of a
check is a distinct offense from the forgery of the indorser’s
signature on the back of that same check and the offenses are not
facially duplicative. See United States v. Lloyd, 46 M.J. 19, 23
(C.A.A.F. 1997). Under the circumstances of this case, however,
I believe that charging forgery of all 16 checks and separately
charging forgery of Specialist Pauling’s wife’s signature as
indorser on four of those checks constitutes an unreasonable
multiplication of charges.
FACTS
Pauling was charged with forging 16 checks belonging to
Little Joe Sandoval. He made 12 of the checks payable to himself
and four of the checks payable to his wife. As Pauling
explained, he did so to avoid having “so many in [his own] name.”
On those four checks, he forged Mrs. Pauling’s signature on the
back of each check as the indorser. He cashed all of the checks,
cumulatively worth approximately $5,000, on 16 separate occasions
at two financial institutions over a month’s time.
Pauling was also charged with two specifications of larceny,
one alleging larceny of $1,675 from the Army National Bank, Fort
Carson, Colorado, and the other alleging larceny of $3,400.39
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United States v. Pauling, 02-0603/AR
from the Security Service Federal Credit Union, Fort Carson. The
larceny specifications reflected the money Pauling obtained when
he cashed the 16 forged checks. All four of the checks made
payable to Pauling’s wife were cashed at Security Service Federal
Credit Union.
Defense counsel moved to dismiss Specification 1 of the
forgery charge (forgery of Mrs. Pauling’s signature as indorser
four times), asserting that Specification 1 was multiplicious
with Specification 2 (forging the front side of all 16 checks).
Defense counsel did not specifically move to dismiss
specification 1 on the basis of unreasonable multiplication of
charges but did mention the “multiplication of charges” in making
the motion to dismiss.
During argument on the multiplicity motion defense counsel
also asserted that Charge II (larceny) was multiplicious for
sentencing. The military judge ruled that the larceny
specifications were not multiplicious for findings or sentencing
with the forgery specifications. He also ruled that the two
2
United States v. Pauling, 02-0603/AR
forgery specifications were not multiplicious for findings but
that they were multiplicious for sentencing purposes.* Despite
making this determination, the military judge failed to inform
the members that the two forgery specifications should not be
considered separately for punishment.
DISCUSSION
The concept of unreasonable multiplication of charges is
based on Rule for Courts-Martial 307(c)(4) [R.C.M.]. “What is
substantially one transaction should not be made the basis for an
unreasonable multiplication of charges against one person.”
R.C.M. 307(c)(4) discussion. To determine whether a military
judge or Court of Criminal Appeals has abused its discretion and
affirmed an unreasonable multiplication of charges, we apply a
five-part test:
(1) Did the accused object at trial that there was an
unreasonable multiplication of charges and/or
specifications?
(2) Is each charge and specification aimed at distinctly
separate criminal acts?
(3) Does the number of charges and specifications
misrepresent or exaggerate the appellant's
criminality?
*
A finding that there is no multiplicity for findings but there
is multiplicity for sentencing, in this case and others, raises
interesting questions. This Court and the United States Supreme
Court have applied the standard in Blockburger v. United States,
284 U.S. 299 (1932), to both inquiries. See Albernaz v. United
States, 450 U.S. 333 (1981); United States v. Oatney, 45 M.J.
185, 189 (C.A.A.F 1996). If the Blockburger test is met for
multiplicity for sentencing, it raises the question as to why it
would not also be met for multiplicity for findings, invalidating
both the sentence and the conviction. See Rutledge v. United
States, 517 U.S. 292 (1996); Ball v. United States, 470 U.S. 856(1985).
3
United States v. Pauling, 02-0603/AR
(4) Does the number of charges and specifications
unreasonably increase the appellant's punitive
exposure?
(5) Is there any evidence of prosecutorial overreaching
or abuse in the drafting of the charges?
United States v. Quiroz, 55 M.J. 334, 338-39 (C.A.A.F. 2001). I
agree with the majority with respect to factors one and two.
However, I believe that the remaining factors support a
conclusion that there was an unreasonable multiplication of
charges in this case.
For each check upon which Pauling made his wife the payee, he
faced triple conviction and punishment: five years for forging
the front of the check, five years for forging the indorsement on
the back, and a larceny conviction that included another five
years of potential confinement. For Pauling’s scheme to forge
and cash the 16 checks he was charged with four felonies and
exposed to 110 years of confinement.
In my view, this three-fold multiplication of Pauling’s
punitive exposure exaggerated his criminality, unreasonably
increased his punitive exposure, and constituted overreaching in
the charging process. Under the circumstances of this case,
charging forgery twice, once for the maker and once for the
indorser, constitutes piling-on.
I would set aside the finding of guilty of Specification 1 of
Charge III, and affirm the remaining findings of guilty and the
sentence.
4
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Judge BAKER (dissenting):
I respectfully dissent for the following reasons.
Multiplication of Charges
Like Judge Erdmann, I would decide this case on the
ground that Appellant was subjected to an unreasonable
multiplication of charges. Appellant stole 16 checks from
Sandoval and forged Sandoval’s name as the drawer on all 16
checks. He made himself the payee on 12 of the checks and
made his estranged wife the payee on four of the checks.
On those checks that designated his wife as the payee,
Appellant signed his wife’s name on the back of the checks
and then cashed the checks. Appellant’s wife was not aware
of his fraudulent acts.
The only thing creative about this case was the
Government’s charging scheme. With respect to the four
checks for which Appellant made his wife the payee and
forged her signature as the indorser, the Government
charged Appellant with “double forgery,” forgeries for the
front of the checks and separate forgeries for the back of
the checks. As a result, Appellant was potentially exposed
to an additional 20 years of confinement for a total of 115
years of confinement. I believe 95 years exposure
addressed Appellant’s wrongdoing in stealing and forging 16
checks in the amount of $5,075. Although the military
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United States v. Pauling, No. 02-0603/AR
checks in the amount of $5,075. Although the military
judge considered the four “double forgeries” multiplicious
for sentencing purposes, the Government’s charging scheme
nonetheless exaggerated the criminality at issue.
Double Forgery
My view on the unreasonable multiplication of charges
is reinforced by my skepticism that this is the case on
which to substantiate a theory of “double forgery.” I am
not persuaded Appellant committed a separate offense under
the Uniform Code of Military Justice when he signed his
wife’s name as the indorser on four checks upon which he
had already forged the drawer’s signature.
The elements of forgery under Article 123, UCMJ, 10
U.S.C. § 923 (1994) are:
(a) that the accused falsely made or altered a
certain signature or writing;
(b) that the signature or writing was of a nature
which would, if genuine, apparently impose a
legal liability on another or change
another’s legal rights or liabilities to that
person’s prejudice; and
(c) that the false making or altering was with
the intent to defraud.
The majority has premised its conclusion on the notion
that Mrs. Pauling incurred an apparent legal liability
because “under the law of the jurisdiction where the checks
were negotiated, the indorser is obligated to pay a check’s
face amount in the event of dishonor.” ___ M.J. ___
2
United States v. Pauling, No. 02-0603/AR
Further, according to the majority, “[t]he risk that such
an obligation will arise is particularly high where a check
bears a forged drafter’s signature, thus providing a basis
for its dishonor.” Id. at ___. However, I am not
convinced the Colorado Commercial Code considers the forged
signature of Mrs. Pauling an indorsement for liability
purposes. Secondly, I am not convinced she would have
incurred an apparent legal liability if her indorsement on
these checks were genuine and she was not complicit in the
forgery scheme. We must keep in mind that if the wife’s
signature were genuine, it would still be a genuine
signature on a stolen and forged instrument.
A. Mrs. Pauling’s forged signature
As the lead opinion notes, the Colorado Commercial
Code states “. . .if an instrument is dishonored, an
indorser is obliged to pay the amount due on the
instrument. . . according to the terms of the instrument at
the time it was indorsed.” C.R.S. § 4-3-415. However,
this provision must be read in light of the Colorado Code’s
treatment of unauthorized signatures. Under the Colorado
Code, an indorsement means “a signature, other than that of
the signer, drawer, or acceptor, that. . . is made on an
instrument for the purpose of (i) negotiating the
instrument, (ii) restricting payment of the instrument, or
3
United States v. Pauling, No. 02-0603/AR
(iii) incurring indorser’s liability on the instrument.”
C.R.S. § 4-3-204. Under the section entitled “Signature,”
the following is found: “A person is not liable on an
instrument unless. . . the person signed the instrument.”
C.R.S. § 4-3-401. The comment to this section states:
“Obligation on an instrument depends on a signature that is
binding on the obligor.” And “[s]ignature includes
indorsement.” C.R.S. § 4-3-401 Comment. Furthermore, § 4-
3-403 states that “[u]nless otherwise provided in this
article or article 4 of this title, an unauthorized
signature is ineffective except as the signature of the
unauthorized signer in favor of a person who in good faith
pays the instrument or takes it for value.” C.R.S. § 4-3-
403. An unauthorized signature is defined in § 4-1-201 as
including a forgery. In essence, a forgery is effective
only as the signature of the forger.
In this case, assuming as the majority does, that the
reason for dishonor would be discovery of the forgery, Mrs.
Pauling would not have been considered an indorser because
her signature was unauthorized. Thus, the Colorado Code
imposed no liability on her under § 4-3-415, apparent or
otherwise, in the event of dishonor.
4
United States v. Pauling, No. 02-0603/AR
B. If Mrs. Pauling’s signature were genuine
Even if Mrs. Pauling’s signature were genuine, it
would not have exposed her to an apparent legal liability
or changed her legal rights or liability to her prejudice.
See Article 123, UCMJ. Under the Colorado Code and its
uniform counterpart, there are several possible scenarios
that might arise relevant to Mrs. Pauling’s apparent
liability if her indorsement was considered genuine on a
check that otherwise contained the forged signature of the
drawer.
(1) Assume for the moment that Mrs. Pauling was a good
faith holder and genuine indorser of a check with a
forged drawer signature. Further, assume she
deposited the check in her bank and Sandoval’s bank
(drawee bank) subsequently paid the check. Under § 4-
3-418 of the Colorado Code, if the drawee bank
mistakenly paid the check over the forged signature of
the drawer, the drawee bank could possibly seek to
recover the amount paid on an equitable theory of
unjust enrichment. However, this would only be true
as long as the wife had not changed her position in
reliance on the payment. C.R.S § 4-3-418(c). Under
paragraph 48(c)(4) of the Manual for Courts-Martial
regarding apparent legal efficacy, “the writing must
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United States v. Pauling, No. 02-0603/AR
appear either on its face or from extrinsic facts to
impose a legal liability on another.” So, while in
theory the drawee bank could seek a remedy “in
equity,” this is certainly not apparent on the face of
the writing. It seems clear that in such a case, the
Colorado Code affords the drawee bank no remedy “at
law” stemming from any legal liability on the part of
Mrs. Pauling. Moreover, the record in this case
suggests the actual facts are even different from the
hypothetical just posed. Here, after signing his
wife’s name, Appellant actually cashed the checks and
received payment. Therefore, no party could even
recover in restitution from Mrs. Pauling because she
never received the benefit of the fraudulent payments.
(2) Mrs. Pauling could potentially incur liability if
her failure to exercise “ordinary care” “substantially
contribute[d]” to the making of the forged signature.
C.R.S 4-3-406 comment 4; James J. White & Robert S.
Summers, Uniform Commercial Code § 16-3(b) (5th ed.
2000). Again, it is not apparent on the face of the
writings, nor, is there any indication in the record
to suggest that Mrs. Pauling knew of, had reason to
know of, or was complicit in the fraudulent acts of
Appellant.
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United States v. Pauling, No. 02-0603/AR
One thing is clear, under the Uniform Commercial Code
(UCC) and Colorado law, the relationships and
responsibilities of payees, drawers, indorsers and holders,
are sufficiently complex that in a case like Mrs.
Pauling’s, whatever legal liability might arise with
respect to a genuine signature would not be apparent from
her genuine indorsement on a forged instrument.
If apparent means “manifest” or “palpable” it is not
clear to me that the UCC, as adopted in Colorado state law,
guides one to a manifest conclusion regarding the wife’s
liability if her signature was assumed genuine. Nor does
it “seem” that Mrs. Pauling would be liable--quite the
contrary. Therefore, while the wife is clearly a “victim”
of her estranged husband’s conduct in a natural law sense,
I do not believe it is apparent that she would have
incurred any legal liability in this case.∗ Accordingly,
on the basis of an unreasonable multiplication of charges
and failure to state an offense on the facts of this case,
I would dismiss the specification that alleges separate
forgeries for the four checks bearing the wife’s
unauthorized signature.
∗
This conclusion is fact specific. I am not suggesting a
forged indorsement can never serve as the basis for a
forgery charge.
7