27 Pa. Super. 613 | Pa. Super. Ct. | 1905
Opinion by
The contract between a banker and his customer is to pay the customer’s check or bills to the person or persons designated by the customer, and to none other, and if a check or bill is payable to order, the banker has only authority to pay it to the payee or to another person who becomes the holder by genuine indorsement: United Security Life Ins., etc., Co. v. Central National Bank, 195 Pa. 586. The reason of the rule that when a bank pays a depositor’s check on a forged indorsement, or a raised check, it is held to have paid it out of its own funds and cannot charge the payment to the depositor’s account, is that there is an implied agreement by the bank with its depositor • that it will not disburse the money standing to his credit except on his order: Land Title and Trust Co. v. Northwestern National Bank, 196 Pa. 230. The rule is expressed in section 23 of our bills and notes act of 1901, in the following language : “ When a signature is forged or made without the 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, unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority.” The statute recognizes the principle well established by former decisions that the depositor may be precluded from setting up against the bank the forgery of his own signature or that of the payee to the check, but does not undertake to specify the acts that will have that effect. “ It is always a good defense that the loss complained of is the re-
Judgment affirmed.