109 Va. 530 | Va. | 1909
delivered the opinion of the court.
The plaintiff in error brought this action to recover a balance alleged to be due him on a deposit account by the Lynchburg National Bank of $3,066.20. The bank denied its liability, except for the sum of $139»00, which amount it tendered; and as to the residue' issue was joined upon the plea of non assumpsit. The defendant in error demurred to the evidence, and, the verdict of the jury having been rendered, the court entered judgment for the defendant, and the case is before us upon a writ of error awarded Brown.
The evidence tends to prove that the plaintiff in error had been for many years a depositor with the defendant bank; that beginning with August, 1900, and continuing until December, 1903, an employee or employees of the bank, from time to time, embezzled the funds of the bank and fraudulently entered the amounts so taken against the account of plaintiff in error. It was the custom of the bank to render monthly to plaintiff in error a' statement of his account, consisting of his cancelled checks for the past month, a machine-made slip, represented to contain a list of these cheeks, and a statement showing the totals of debits and credits, and the balance to the credit of ■plaintiff in error. Brown did not keep a pass book, but relied solely on these statements rendered by the bank. His examination of these statements consisted’ of seeing that his checks as drawn were returned to him as vouchers, that his signature to the cheeks was genuine, and that the checks returned corres
It is difficult to conceive of a fraud more easy of detection
As was said by this court in Bank of Richmond v. Richmond Electric Company, 106 Va. 347, 56 S. E. 152, “a bank depositor is under obligations to the bank to examine within a reasonable time and with ordinary care the account rendered in the pass book and the vouchers returned by the bank to him, and to report any errors discovered without unreasonable delay. The examination need not be so minute as to exclude any possibility of error, but it should be made in good faith and with ordinary diligence, and such care should be used as is required by the circumstances of the particular case.”
In Leather Manufacturers’ Bank v. Morgan, 117 U. S. 96, 29 L. Ed. 811, 6 Sup. Ct. 657, a like doctrine is announced. In that case, “the main dispute,” said Mr. Justice Harlan, “is as to the right of the depositor to question the account rendered by the bank, so far as it charges him with certain checks which he signed, but which, before payment, were materially altered by his clerk, without his knowledge or assent.” The facts of that case are as follows: Berlin was the confidential clerk of Cooper from Januárv, 1878, ter March, 1881, and had the entire management of his office, kept his books, and had full charge of Cooper’s account, as agent of Ashburner and Company, with the bank. With the full knowledge of Cooper, Berlin filled up all checks drawn upon that account, entering on the stub of the check book the date and amount of each check, the name of the payee and the purpose for which it was drawn. Pursuant to Cooper’s instructions, or in the regular course of business, he filled certain checks between September 11, 1880, and February 13, 18'81, which, being signed by Cooper and delivered to him,
Upon this evidence, the circuit court directed a verdict for the plaintiffs, and the case was carried to the Supreme Court of the United States upon a writ of error. Mr. Justice Harlan, in his opinion, fully discusses the authorities, and the result of
In the case of Brown v. Bank, the bank demurred to the evidence, and the judgment upon the demurrer was rendered in its favor. Here too, as in the case of Bank v. Morgan, the
It is true that the fraud was perpetrated in this, case in a very crude and simple manner. It is not a case of forgery, which if cleverly performed is difficult of detection, but consisted merely in making a double charge for the amount represented by a single check, which could have been detected, as the petition for the writ of error admits, by adding up the amounts on the stubs of the check book and comparing the total with the total showed on the statement of “checks as per list.” As a matter of fact, as soon as plaintiff in error did this, the fraud was discovered. But, on the other hand, it is to be remembered that the bank is the debtor of the depositor, and that it is under obligation to keep careful and faithful accounts with its depositors, to scrutinize cheeks, and to exercise proper care and skill to prevent or to discover fraud.
It is true that the employee of the bank, in the perpetration of a fraud upon a depositor, is not the agent of the bank; but in this case, for three years, one or more employees of the bank had engaged in systematically defrauding the plaintiff in error, and in the concealment of those frauds by making and rendering false accounts.
The court is of opinion that, looking to the long course of dealing between the parties, the numerous occasions upon which the money of the bank had been abstracted and charged to the account of plaintiff in error, to the monthly accounts (more than thirty in number) rendered by the bank to plaintiff in error through its employees, to the probability that such fraudulent practices could not have been perpetrated and successfully concealed through so long a period unless participated in by more than one of the employees of the bank, and regard being had to the relations which exist between a bank and its depositors, and to the reciprocal duties owing from one to the other, it
The judgment of the corporation court must, therefore, he reversed, and this court will proceed to enter such judgment as that court should have rendered.
Reversed.