1. What type of instrument was the check when Herrera found it?

2. What type of instrument was the check when Herrera added his name to the “Pay to” line?

3. Could Herrera be charged with forgery?

Joshua Herrera found a purse in a dumpster near San Pedro and Kathryn Streets in Albuquerque. Herrera took the purse with him to a friend’s house. Either Herrera or his friend called the owner of the purse and the owner retrieved the purse at some point. After the purse was returned to the owner, Herrera returned to the dumpster where he found a check and some other items. The check Herrera found was written out to “Cash” and he thought this meant that he “could get money for [the] check.”

When he presented the check to the teller at a credit union to cash it, the teller instructed him to put his name on the payee line next to “Cash.” Herrera added “to Joshua Herrera” next to the word “Cash” on the payee line of the check and indorsed the check.

Herrera had pleaded guilty to one count of forgery but moved to have the indictment dismissed on the grounds that adding his name to a bearer instrument was not forgery. He appealed the denial of the motion to dismiss the indictment.

JUDICIAL OPINION

WECHSLER, Judge … Under Section 30-16-10(B) the State must prove that the defendant gave or delivered a document to a victim with the intent to injure, deceive or cheat the victim or another, knowing that the document (1) was a false document; (2) contained a false signature; (3) had a false indorsement; or (4) was changed so that its effect was different from the original.

Defendant did not make a false signature or offer a false indorsement. Defendant could only have committed forgery by changing the legal effect of the check. If Defendant did change the legal effect of the check, he could have committed forgery under Section 30-16-10(A) and if he transferred the forged check he could have committed forgery under Section 30-16-10(B). Under either subsection of Section 30-16-10, the State must prove that Defendant changed the legal effect of the check. Therefore, whether Defendant changed the legal effect of the check is the dispositive question in this case. Defendant argues that the act of adding his name to the payee line next to the word “Cash” failed to alter the legal effect of the check. We look to the Uniform Commercial Code to determine whether Defendant is correct.

When a negotiable instrument is made payable to “Cash,” it is a bearer instrument. A bearer instrument refers to an instrument that is payable to anyone possessing the instrument and is negotiable by transfer alone.

In contrast, an instrument payable to an identified person is considered an order instrument. An order instrument requires the indorsement of the identified person before it can be negotiated. The legal effect of an order instrument is different from a bearer instrument because each type of instrument has different negotiability requirements. [W]hether an instrument is an order instrument or a bearer instrument is important in determining how an instrument is negotiated. If the instrument is payable to bearer, it can be negotiated by delivery alone. If it is payable to the order of an identified person it cannot be negotiated without the indorsement of that person. ……………………