| N.Y. Sup. Ct. | Apr 6, 1926
The jury Was warranted in finding that the initial deposit in the bank account of the plaintiff herein was brought to the bank by Ehrlich, and that at that time he received the temporary receipt; that he returned with the temporary receipt and complied with the formalities of opening the account on the following day, at which time he represented he was the treasurer of the plaintiff and received from the bank official a signature card with instructions to have the president sign same; that before leaving the bank he signed as treasurer, leaving space for the president, Feinberg, to sign; that the president, Feinberg (who owned all the stock of plaintiff), subsequently affixed his signature to the card at a time when Ehrlich’s signature was already on it in the capacity of treasurer and at a time when the card recited that the president or the treasurer was to have authority to sign the company checks; that Ehrlich returned the card in that condition to the defendant bank, and that from time to time Ehrlich made further deposits and wrote checks making withdrawals from the bank against the plaintiff’s account.
(1) The plaintiff asserts that the evidence of the foregoing upon which the jury acted was improperly admitted and that as a matter of law plaintiff was entitled to a verdict. Neither side submits authority that is directly in point on any question in the case. There is, however, authority of long standing that under the cir
(2) Plaintiff also asserts that the bank Was negligent as a matter of law in paying out checks drawn to the order of cash and signed by the plaintiff corporation, per Ehrlich as treasurer, when such checks were presented by Ehrlich in person. The defendant was not negligent as a matter of law in so doing. Whether it Was negligent or not Was at best a question of fact for the jury, and the jury have held that the bank was not negligent. The bank could only be held to be negligent in the event that it was put on notice or inquiry that the proceeds of the checks were being or to be made, the subject of a larceny or conversion. Such notice or being put upon inquiry arises when a check is made payable to the officer and signed by the corporation per that self-same officer, or where no matter how the check is made payable the bank is apprised that the proceeds are being applied to the officer’s personal affairs as when a check payable to cash is placed by the bank to the personal credit of the officer in an account the bank may have for that individual. But when a check, made payable to cash, is presented by an employee or officer of a corporation authorized to sign for such a corporation, to a bank for payment in cash, the bank has no means of knowing from a mere inspection of the check that the proceeds are going to be subjected to larceny or conversion by the one presenting the check. It is only put on notice where the individual presenting it is the payee or is depositing such a check in his private account. To hold otherwise Would result in the court’s ignoring the universal practice of long standing of treasurers and similarly authorized officers of corporations presenting checks made payable to cash for vast sums for payroll and other purposes. Such transactions are of daily occurrence in every bank in the city of New York, and if courts did not know this they would merely brand themselves as being ignorant of what is common knowledge in the entire business community, and give convincing point to the criticism often made that courts have lost touch with the practical facts of life and the world, especially in their attitude on matters of common knowledge in business practice. At most it is a question of fact for a jury
Motion to set aside the verdict for the defendant is denied, with exception to the