51 A.2d 389 | Pa. Super. Ct. | 1946
Argued October 7, 1946. Gimbel Brothers, Inc., claiming to be a bona fide holder for value of a dishonored check drawn by Bruce K. Redding, a contractor, sued Hymowitz, the payee and *328 prior indorser. The defense was that Redding, the drawer, came to defendant's plumbing supply store and discussed with the salesman the purchase of certain supplies, and gave therefor his check for $500, naming Hymowitz as payee. The check was brought to Hymowitz, who indorsed it (an open indorsement). Redding asked for immediate delivery of the goods and the defendant then telephoned from his private office to the drawee bank and learned that the check was not good. Hymowitz returned and found that Redding had left and taken the check with him. Redding indorsed the check bearing the prior indorsement of the payee and took it to Gimbel Brothers, Inc., where he had credit and whose branch credit manager he knew. He was accompanied by a person whom Redding introduced as Hymowitz, the payee, and the plaintiff cashed the check. We have, therefore, a holder of a check suing a prior indorser. In a trial before the court without a jury judgment was for the plaintiff, the holder, against the defendant, the indorser-payee, and the defendant appealed. The question thus involved is apparently an open one in Pennsylvania.
The judgment will be affirmed for two reasons.
A holder in due course is defined by § 521 of the Negotiable Instruments Law of 1901, P.L. 194, 56 P.S. 132, as one who takes an instrument, complete and regular on its face, in good faith and for value. The plaintiff was a holder in due course. It gave for the check the full amount for which it was drawn. It did *329
not take it at a discount as in Fehr v. Campbell,
The defendant-indorser could not defend on the ground of his own non-delivery. For under § 162 of *330 N.I.L., 56 P.S. 21, as to a holder in due course delivery by all prior parties is conclusively presumed. Having taken the check without notice of any infirmity under § 563 of N.I.L., 56 P.S. 136, the holder's title was not defective under §§ 544 and 55,5 56 P.S. 134 and 135.
The other reason which precludes the prior indorser from defending on the ground of non-delivery is the maxim that as between two innocent parties (in this case the holder for value and the prior indorser) liability should be borne by the one, i.e., the indorser, who made the loss possible.
The payee and prior indorser could easily have protected himself by making his indorsement "for deposit only" or with some similar notation. He could have protected himself by not allowing the indorsed check to go out of his possession. He could have protected himself by not indorsing the check until he was ready to receive it. Thus his act or acts enabled Redding to commit the fraud and induced the payment by the plaintiff of the check. To hold otherwise would require one proposing to become the purchaser of a check to inquire of each *331
indorser whether his indorsement was intended, or in default thereof to release him. This rule is fully discussed in Weiner v.The Pennsylvania Company, etc.,
Judgment affirmed.
"1. That it is complete and regular upon its face.
"2. That he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was the fact.
"3. That he took it in good faith and for value.
"4. That at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it." (56 P.S. 132)