284 Mass. 9 | Mass. | 1933
These actions in contract or tort are before us upon exceptions claimed by the plaintiff to orders directing verdicts for the defendant. They were brought by the payee of certain checks against the bank on which the checks were drawn, which had made payment upon forged unauthorized indorsements and had returned the checks to the makers. The evidence in substance was as follows: In 1924 and until his death in May, 1926, one Barker was vice-president and a director of the plaintiff, and owner of one hundred ninety-eight of the eight hundred shares of its capital stock. The by-laws conferred on the vice-president authority to “prove claims in bankruptcy or insolvency, for the company, and shall have such further powers and perform such other duties as the board of directors may require.” A vote of the directors passed on February 27, 1922, provided that Barker be empowered so long as he continued to hold office as vice-president “to assign, to discharge, to foreclose by entry or by sale and to make partial releases of any mortgages held by the company, and further to affix the corporate seal and to sign, acknowledge and deliver in the name of and on behalf
The declarations contained a count in contract for each
There is no claim that Barker was not authorized to receive the checks from the makers in reduction of their several debts to the plaintiff, or that the makers did not deliver them to him as the representative of the plaintiff, duly authorized to receive them. In those circumstances the checks became the property of the plaintiff. Its property was stolen by Barker. It seeks, by this action at law, to shift its loss upon the defendant bank. The practical question for decision is, can it do so?
It is clear law, we think, that there is no such relation of contract between the bank and the plaintiff as the contract counts of the declaration assert. The bank has not made, by implication, any promise to the payee to pay only upon the payee’s authorized indorsement. Carr v. National Security Bank, 107 Mass. 45, so decides. It is also the necessary implication from the negotiable instruments law, which, by G. L. (Ter. Ed.) c. 107, § 212, provides: “A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder unless and until it accepts or certifies the check”; and, by § 150, enacts that “A bill of itself does not operate as an assignment of the funds in the hands of the drawee available for the payment thereof and the drawee is not liable on the bill unless and until he-accepts it.” Here there has been no certification or acceptance. Payment of the check, cashing it on presentment,
We need not consider the vexed question whether there is a liability in indebitatus assumpsit on a count for money had and received, as no such count is declared upon. (See for discussions and collection of cases, 38 Harv. Law Rev. 864, et seq.; 5 R. C. L. 566, § 89, et seq.; California Stucco Co. of Washington v. Marine National Bank, 148 Wash. 341.)
Recovery, if any is possible, under the declaration must be had upon the counts in tort. No case directly in point is called to our attention and we find none in our decisions; but the principles acted upon in A. Blum Jr.’s Sons v. Whipple, 194 Mass. 253, Jordan Marsh Co. v. National Shawmut Bank, 201 Mass. 397, Franklin Savings Bank v. International Trust Co. 215 Mass. 231, Quincy Mutual Fire Ins. Co. v. International Trust Co. 217 Mass. 370, sustain the position that there has been a conversion here. The taking of the checks from one with no authority to deliver them, and the ultimate return of the checks to the makers, constitute a dealing with them as an owner and an interference with the possession of the rightful owner. Franklin Savings Bank v. International Trust Co. 215 Mass. 231. See also collection of cases elsewhere, 69 Am. L. R. 1078, note, and 38 Harv. Law Rev. 881, note 88.
In Shepard & Morse Lumber Co. v. Eldridge, 171 Mass. 516, a case on its facts much like the one before us but brought against the maker of checks rather than against the drawee bank, it was held that evidence with reference to negligence was wrongly excluded. In others of the cases cited above, negligence has been considered in reaching the decision. First National Bank of Danvers v. First National Bank of Salem, 151 Mass. 280. A bank is not to be held liable for payment of checks where carelessness of the party seeking to establish liability has contributed in bringing about the loss. National Bank of North America v. Bangs, 106 Mass. 441. This is based upon the principle of equity that as between those equally blameless a loss should remain where it falls. In the case before us the makers of the checks are without fault. They delivered their checks
Exceptions sustained.