156 N.Y.S. 582 | N.Y. App. Div. | 1915
Lead Opinion
The action is brought by a depositor against his depository batik to recover the sum of $576.52. The amount sought to be
The checks in question were drawn by the North British and Mercantile Insurance Company upon the Merchants National Bank to the order of divers persons. One J. W. Walker, who was a clerk in the insurance company, in some way obtained possession of these checks, and having indorsed upon each the name of the payee to whom it was drawn, indorsed them with his own name and delivered them to plaintiff, who deposited them, as aforesaid in defendant bank. The latter received payment thereof from the Merchants National Bank. Later, when it was discovered that the indorsements of the several payees were forgeries, the defendant bank, upon demand of the Merchants National Bank, repaid to the latter the amount of the checks and canceled plaintiff’s credit for that amount.
Since the judgment proceeded upon a directed verdict, the appellant is entitled to the most favorable inference that may be drawn from the evidence.
In the first place it was shown by the undisputed evidence of a qualified expert that in the case of each check the indorsement of the name of the payee named in the check was written by Walicer, the clerk. This evidence, unexplained, coupled with the fact that Walker induced plaintiff to cash the checks, is sufficient prima facie to establish the fact that the indorsement of the name of the payee on each check was a forgery, and the jury might properly have so found..
Assuming that fact to be established, it is quite clear that plaintiff acquired no title to the checks and can claim nothing on their account. This is the effect of section 42 of the Negotiable Instruments Law (Consol. Laws, chap. 38; Laws of 1909, chap. 43), which reads as follows: Ҥ42. Forged signature; effect of. Where a signature is forged or made without authority of the person whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, or to give a discharge therefor, or to enforce payment thereof against any party thereto, can be acquired through or under such signature,
The defendant was under no obligation to wait to be sued before making repayment to the Merchants National Bank. Assuming the payee’s signatures to have been forged, defendant stood in no better position toward the Merchants National Bank than plaintiff stands to defendant. It is, therefore, of no moment that defendant paid without suit. (Oriental Bank v. Gallo, 112 App. Div. 360; affd., 188 N. Y. 610.)
The determination and judgment appealed from must be reversed, and a new trial granted, with costs to appellant to abide the event.
McLaughlin, Clarke and Smith, JJ., concurred; Ingraham, P. J., dissented.
Dissenting Opinion
I dissent from the reversal of this judgment, on the ground that the defendant was never in a position to chargeback these checks against the plaintiff’s account, as it had not the checks in its possession and could not deliver them to or return them to the plaintiff. As stated in the prevailing opinion, the defendant undoubtedly could have charged back the checks to the plaintiff’s account if the checks had been forged so that the plaintiff never had title to the checks. But as a condition for justifying such a charge, the defendant is bound to return the forged checks to the plaintiff. Until it was in possession of the checks, it could not recover from the plaintiff the amount that it had paid him on account thereof; and the same rule should apply to the right of the bank to charge back to its customer the amount of a forged check which the customer had deposited and which had been credited to the customer’s account. The defendant was not, therefore, bound to pay to the Merchants Bank the amount of the forged check -until the Merchants
I, therefore, think the judgment should be affirmed.
Determination and judgment reversed and new trial ordered, costs to appellant to abide event.
