107 Minn. 196 | Minn. | 1908
Lead Opinion
This action was brought by Andrews & Gage, the appellants, against the Northwestern National Bank to recover the sum of $926.72
The parties stipulated, and the court found, in substance:
That Andrews & Gage were engaged in the grain and grain elevator business in the state of Minnesota, and during the time covered by the transaction in question operated an elevator for the purchase, handling, and storage of grain at Berlin, North Dakota. That during said time and until about October 27, 1905, one P. T. Bangdon was an employee and agent of Andrews- & Gage at Berlin in charge of their elevators there, and as such employee and agent engaged in purchasing, storing, and shipping wheat and other grain at Berlin. That Bangdon had power and authority from Andrews & Gage to purchase wheat and other grain from the farmers in the vicinity of Berlin, and to store it in the elevators and ship it to Andrews & Gage at Minneapolis and other markets, and pay for or make advances on the grain so purchased with money furnished by Andrews & Gage for that purpose, or by delivering to the vendor of such grain the checks of Andrews & Gage furnished to him by them for that purpose. But he had no authority to sign or indorse any check made by, or on behalf of, Andrews & Gage, nor to indorse any draft made by or upon them, nor to sign drafts on their behalf in the course of the business or otherwise.
On or about September 23, 1905, Andrews & Gage made a certain check for $926.72 payable to Z. W. Thomas or order. This check was drawn upon the Northwestern National Bank at Minneapolis, and was mailed by Andrews & Gage to Bangdon at Berlin, North Dakota, with instructions to deliver it to Z. W. Thomas if it was then due and owing to him for grain theretofore received by Andrews & Gage from him. Bangdon received the check with the instructions, but, instead of delivering the check to Thomas, he, without the knowledge or consent of Andrews & Gage, on October 6, 1905, presented it to the State Bank at Berlin, North Dakota. Before such presentation’ Bangdon, without any authority, indorsed the name of Z. W. Thomas on the back of the check. At the request of Bangdon, the State Bank of Berlin then placed the amount of the check to the credit of an account then opened by Bangdon in that bank in the name of P. T. Bangdon & Co. The State Bank of Berlin took the check, and credited the
The State Bank of Berlin after receiving the check indorsed the same, “Pay any bank or banker or order, prior indorsements guaranteed, State Bank of Berlin, Berlin, North Dakota, F. F. McGuire, Cashier,” and delivered it to the First National Bank of Crystal Bake, Minnesota, and received from the bank either in cash or credit the amount of the check. That bank delivered the check to the National Citizens’ Bank of Mankato with a similar indorsement, except the words, “Prior indorsements guaranteed,” and received from it the amount of the check either in cash or credit. The National Citizens’ Bank of Mankato delivered the check to the First National Bank of Minneapolis with a similar indorsement, and received from it the amount of the check in cash or credit. The First National Bank of Minneapolis presented the check for payment to the Minneapolis Clearing House on October 9, 1905, and the Northwestern National Bank received the check through the clearing house in the usual method, and paid to the First National Bank of Minneapolis the amount thereof either in cash or in credit, and charged the amount of the check upon its books to the account of Andrews & Gage.
The State Bank of Berlin on October 6, 1905, received the check, supposing and believing that the indorsement thereon was a valid and proper one, and neither the First National Bank of Bake Crystal, the National Citizens’ Bank of Mankato, the First National Bank of Minneapolis, nor the respondent, the Northwestern National Bank, had any knowledge that the first indorsement on the check was not genuine, valid, and proper until on or about May 17, 1906. Each and all of these banks received, accepted, and paid the check in the ordinary and usual course of business, and without any knowledge that the indorsement of the name of Thomas was not genuine and properly authorized. The State Bank of Berlin learned that it was not the genuine indorsement of Thomas on or about October 27, 1905. The account opened
On October 27, 1905, Andrews & Gage demanded of Bangdon certain moneys which they asserted he should account for. He thereupon informed them that it was in the bank to their credit, except about $79, which he then paid, and handed to them a bank pass book of the State Bank of Berlin in their name, showing that Andrews & Gage had to their credit in that bank the sum of $1,003.01. The fact was that, although not then known to Andrews & Gage, Bangdon had on the same day drawn a check for $1,003.01 on the P. T. Bangdon & Co. account, and had it credited to the account of Andrews & Gage in said bank and charged against the account of P. T. Bangdon & Co. When Andrews & Gage received this, bank book showing that they had a credit of $1,003.01 at the State Bank of Berlin, they were not aware that it was to any extent the proceeds of the Thomas check. On November 9 Bangdon withdrew the balance left to the account of P. T. Bangdon & Co. from the State Bank of Berlin. After receiving the bank book, Andrews & Gage made other deposits in the account so opened in their name by Bangdon, and prior to January 1, 1906, checked out of said account all the moneys so deposited by them and by Bangdon. The check of $1,003.01 was given by Bangdon to Andrews & Gage in settlement of a shortage known on October 27, 1905, and for no other purpose and upon no other consideration. Shortly prior to October 27, 1905, Andrews & Gage were informed by Thomas that he had not received the check in question, nor indorsed the same. At that time they had the check with all the indorsements thereon in their possession. Prior to the delivery of the bank pass book to Andrews & Gage, Bangdon stated to them that he was the agent of Thomas, and had authority to indorse the check. The sum of $1,003.01 owed by Bangdon to Andrews & Gage was in addition to, and exclusive of, any liability on his part to the firm for said check or the money received from it.
Upon these facts„ the trial court found that Andrews & Gage were not entitled to recover the amount of the check from the Northwestern
The facts present a rather unusual condition of affairs, hut we are satisfied that the court reached the proper conclusion. The appellants contend that as depositors they were creditors of the Northwestern National Bank to the extent of their balance therein, and entitled to disregard any charge made against their account which was not authorized by them or made by reason of their negligence or other misconduct. The correctness of this general proposition cannot be questioned, but nevertheless Andrews & Gage are not in a position to require the Northwestern National Bank to credit their account with the amount of this check. The appellants make an ingenious argument, but the result which they desire to bring about would be so unjust and inequitable as to suggest that a fallacy lurks somewhere in the process of reasoning. The appellants have not been injured by the fact that the Northwestern National Bank paid this check upon a forged indorsement, and their theory, if accepted, would merely result in substituting the bank for the defaulting employee as the creditor [debtor] of Andrews & Gage. The check for $926.72 came into Tangdon’s hands on October 6, 1905, and with it he opened an account with the State Bank of Berlin in the name of P. T. Tangdon & Co. Ten days later he deposited an additional sum of $380.25 in the account, making a total of $1,306.97. On October 27, 1905, he drew a check on the account of P. T. Tangdon & Co. for the sum of $1,003.01, and deposited it in another account in the same bank in the name of Andrews & Gage.
The result of all this juggling was that the $926,72, the proceeds of the check with the forged indorsement, and an additional $76.29 from some other source, went into the new Andrews & Gage account. Tangdon was then short in his accounts with his employers, Andrews & Gage, and when on October 27, 1905, they made a demand on him for a settlement, he responded by turning over to them the account in the State Bank of Berlin which he had evidently created fc • that purpose. That is, Tangdon was short in his accounts, and had no money with which to pay. The check for $926.72 which was delivered to him by Andrews & Gage to be used in paying Thomas was in effect cashed by him. With the proceeds which still belonged to Andrews &
We cannot see that the fact that this business was transacted by the use of credits, instead of the handling of actual cash, makes any difference so far as the liability of the Northwestern National Bank is concerned. It paid the check upon a forged indorsement, and thereby became liable to its depositor for any damages thereby sustained by him. If the depositor lost nothing, he should recover nothing. If a forged check for $100 on B.’s account is paid to A., and A. immediately on being caught hands the money back to B., it would not be claimed that B. could sue the bank and recover the $100 which had been wrongfully charged to his account. Again, suppose A. in the employ of B. owes B. $100 which B. cannot collect. A. is given a check on the bank payable to D., with instructions to deliver it to D. Instead of doing so, he forges the payee’s name, draws the money from the bank, and with it pays his debt to B., and receives a receipt in full. Can B.’ collect $100 from the bank? If so, it would be quite easy for A. and B. to arrange for the bank to pay A.’s debt to B., leaving B.’s account unimpaired. Of course, A. might take some chances of criminal prosecution, but Langdon was willing to assume the chances in this instance in order to square his account with his employers.
The result of the entire transaction is that the money started with Andrews & Gage, and, after passing around the circle, came back to them. The fact that credits, instead of cash were used, does not change the legal effect. Langdon’s debt to them is to that effect un
Concurrence Opinion
The mere fact that appellants received the proceeds of the check from Gangdon would not prevent recovery. If appellants had been misled and had lost an opportunity to otherwise collect their claim from Gangdon, then in my judgment the defense here urged would not be tenable.
But I concur in the view that appellants cannot recover unless they were damaged as a result of the transaction, and that no damage has been shown. Although the court found that appellants had no knowledge or information that the money received from Gangdon was to any extent the proceeds of the check, yet the court also found that they had the check with all the indorsements in their possession, and knew that Thomas had never received it, and had not indorsed it, and that Gangdon had indorsed it, claiming to be the agent of Thomas. It seems reasonably clear that appellants were in possession of all of the facts, and could readily have ascertained by an examination of the bank book that the money paid them by Gangdon was the proceeds of the check. If appellants knew that Gangdon had forged Thomas’ name, and had drawn the money on the check from the local bank, they had every reason for believing that the money placed to their account in the pass book was that identical money. In receiving the money thus paid out by the local bank, appellants ratified the indorsement, and consented to its collection from the bank upon which the check was drawn.
I concur in the result.
On October 2, 1908, the following order was filed:
In a petition for reargument the point is made that when Langdon drew the $1,003.01 from the account of $1,306.97, which stood in the name of P. T. Gangdon & Co., he must be presumed to have drawn $380.25 of his own money and only that portion of the remainder made up of the $926.72 check which was necessary to make the total.of $1,-003.01, and that therefore Andrews & Gage received back but a part
On February 26, 1909, the following opinion was filed:
A reargument upon this issue was granted in this case and briefs were duly filed by the parties. After considering the matter fully, we find no reason for changing the decision heretofore filed in this case and the same is hereby adhered to.
