15 Pa. Super. 82 | Pa. Super. Ct. | 1900
Opinion by
This action was brought to recover the amount of a balance apparently due upon a bank account, which was open and unsettled at the death of plaintiff’s testator. Attached to and made part of plaintiff’s statement was an itemized account of the credits to which it was alleged the decedent was entitled. The affidavit of defense challenges but one of these items. As that item, however, is larger than the apparent balance due, the defense involves the whole of plaintiff’s claim. Plaintiff’s statement avers that Charles E. Cornelius died on October 15, 1898, and that he was and his estate is insolvent. The item in controversy represents the proceeds of a note, which, as we must assume the allegations of the affidavit of defense to be true, was discounted for the decedent by the defendant, under the circumstances below stated. “ On September 9, 1898, the said Charles E. Cornelius made his certain promissory note to the order of and indorsed by J. W. Over, at sixty days, for $1,000, which note was discounted for said Charles E. Cornelius, at his request, by the defendant bank, on said day, and the proceeds
The learned court below was of opinion that: “ The real question in the case is, can the defendant bank set up the fraud of Cornelius as a set-off to the suit of the administratrix for the balance due on his bank account, and thus obtain a preference to the other creditors ? ” The court being of opinion that this could not be done, made absolute a rule for judgment for want of sufficient affidavit of defense. We must hold that this is not a case of an attempt to prevent a recovery of a sum due at the death of the testator by the interposition of a counter claim not becoming due until after that event. The fraud upon which the defendant relied to defeat a recovery was in the very foundation of the contract, upon which the plaintiff must rely in order to establish her right to recover.. When the bank gave Cornelius credit on his account for the amount of the proceeds of the note, they simply in
The decedent was the maker of the note in question. The name of the only indorser, the payee, was forged. The decedent brought the note in this condition to the bank and there had it discounted. Proof of these facts alone would have been sufficient to sustain a finding by a jury that the decedent had been guilty of the forgery. The affidavit of defense alleged these facts positively, and the assertion that the defendant “ is informed, believes and expects to be able to prove on the trial of the case that the said Charles E. Cornelius forged the name of J. W. Over, as indorser on said note,” is therefore, to be accepted as true. Even if the bank had paid over the money to Cornelius, it might at once, upon discovery of the fraud, have brought an action in assumpsit against Cornelius for the recovery of the money to be paid, without waiting for the note to become due: Ritchie v. Summers, 3 Yeates, 531; Roth v. Crissy, 30 Pa. 145. Or the bank might have brought an action of deceit, in which the measure of damages would have been the difference between the value of that which it did receive, and that which it was led to believe that it was receiving: that is, the difference between the value of the note of an insolvent maker, with a forged indorsement, and that of. the note of the same maker, indorsed by a party known to be solvent and upon
When the bank discovered the fraud it was put to the election of either ratifying or rescinding the contract. The election to rescind must have been exercised with reasonable promptness and notice of the rescission promptly given to the other party. Omission to repudiate within a reasonable time is evidence, and may be conclusive evidence of an election to affirm the contract. The rule is, “prompt repudiation, and restitution as far as possible.” The party rescinding a contract is, ordinarily, required to tender a return of the property or security which was the consideration upon which it was based: Howard v. Turner, 155 Pa. 349; Acetylene Company v. Smith, 10 Pa. Superior Ct. 61. It has been recognized, however, as an exception to this rule, that if the thing, the consideration of which is sought to be recovered back, be entirely worthless, there is no duty to return it: Babcock v. Case, 61 Pa. 427; Beetem v. Burkholder, 69 Pa. 249. The defendant did not, upon rescinding the contract, tender to plaintiff the note which had passed thereunder. Does its failure to do so- defeat its right to allege a rescission ? The case would seem to come within the exception to the rule recognized in the eases last cited. . The plaintiff in her statement avers that the estate of the maker of the note in question is insolvent, and, as the name of the only indorser is forged, the note is, therefore, without value.
Had the bank discovered the fraud during the lifetime of Cornelius, it would have had the right to rescind the contract, without returning to him the note, the negotiation of which was, upon his part, a criminal offense, fraudulently uttering a written instrument. The law does not require that a party, in order to rescind a contract; shall place in the hands of a criminal the evidence of his crime. There are good reasons for holding that, as against the present plaintiff, the defendant ought not to be required to surrender the note, for that instrument contained within itself the only evidence necessary to establish an important fact vital to the exercise of plaintiff’s right of rescission. Without being prepared to produce the note the plaintiff could not possibly be able to establish that
The judgment is reversed and a procedendo awarded.