190 A. 876 | Pa. | 1937
Argued January 11, 1937.
The question at this time is whether plaintiff has stated a cause of action. A writ in assumpsit was issued to recover the aggregate of sixty-five checks payable to plaintiff's order. They were drawn by various drawers on various banks other than defendant between June 25, 1927, and December 12, 1928, and were received by plaintiff in the course of business. Plaintiff's signature was forged by a bookkeeper, Luke, who delivered the checks with the forged endorsements to Anna M. Kelly or Patrick Kelly, who deposited them in the defendant bank. The defendant collected them and accounted to its depositor. Plaintiff then demanded that defendant pay the amount of checks and defendant refused. A statutory demurrer was sustained.1 The judgment *395
was entered without discussion on the authority of TibbyBrothers Glass Co. v. Farmers' and Mechanics' Bank,
No fault can be found with the learned court below for following the Tibby case, as it had not been expressly overruled. We have however been asked by appellant to reconsider the ground of that decision and all agree that it cannot be sustained. It has been the subject of adverse criticism, is contrary to the decisions of nearly all, if not all, other jurisdictions in which the question has been presented2 and, in the interest of that uniformity *396 of decision desirable in the law of negotiable instruments, should now be overruled.
Plaintiff's claim is based on conversion, a wrong redressed by action in tort, or in assumpsit for money had and received; and at times by action in tort with a count for money had and received.3 The plaintiff may elect the form of action to be pursued.
Section 23 of the Negotiable Instruments Law, 1901, P. L. 194, 198, 56 PS section 28, provides: "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 statement of claim therefore alleges a case in which title to the payee's property — the checks — is still in the payee; and the averment is that the defendant, as the collecting bank, exercised dominion over the property by collecting the checks and accounting to its depositor for the proceeds in denial of plaintiffs' title to the checks.
In the Tibby case the plaintiff was payee of certain checks. His signature was forged by one who delivered them to the defendant for collection. Defendant collected them and paid the proceeds to the depositor. In holding that the collecting bank was not liable, the opinion, written by MESTREZAT, J., does not discuss conversion *397
but proceeds on the ground that as a payee cannot for want of privity, maintain an action on the check against the bank on which it was drawn, the plaintiff payee, for the same reason, should not recover from a collecting bank — a converter — who received the check from one who had no title to it, collected it and accounted to its depositor. But the legal relations existing between the payee and a collecting bank are altogether different from those of payee and drawee. The reason why the payee may not recover from the drawee is that there is no contract between them;4 no promise by the bank to pay to the holder of the check; an enforceable contract will result if the drawee in writing accepts the check (sections 62 and 132, Negotiable Instruments Law, 1901, P. L. 203 and 212, 56 PS sections 153 and 321) but without such acceptance, the drawee's obligation is limited by its contract with its depositor. But in receiving a check for collection, the collecting bank gets no title to the check if the holder depositing it had none; by collecting it, and crediting the collection to the depositor, the bank necessarily assumes dominion over it inconsistent with the payee's control over his own property; this is conversion.5
In the recent *398
case of Main Belting Co. v. Corn Exchange National Bank,
"There may be a certain artificiality about this reasoning, but it is not only supported by the weight of authority, but the result reached by it in the end is the same which would be affected under the rule stated in Tibby v. Bank, supra, and in reaching that end it avoids a useless multiplication of litigation. For under that rule the collecting bank would be liable to the drawee; *399 the drawee would still be liable to the drawer, the drawer to the payee, and the forger to the collecting bank."
In support of its demurrer, defendant also contends that plaintiff's statement shows negligence preventing recovery. The contention is that, though the statement avers prompt notice to defendant of the forgery, more particular averments support the view that defendant is excused by plaintiff's negligence. Section 23, quoted above, qualifies the provision that no right to the instrument passes by forgery by adding "unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority." It does not appear in the statement exactly when plaintiff learned of the defendant's conduct in relation to the time notice was given. The law provides a method of obtaining more specific averments in proper cases.6 But for another reason we must reject defendant's contention. The forger delivered or caused to be delivered plaintiff's property to defendant; the defendant, though misled by the forger's conduct, wronged the plaintiff. But the plaintiff as payee stood in no legal relation to the defendant as a collecting bank at the time of the forgery and therefore owed no duty to defendant. The statute of limitations specifies the period in which plaintiff could sue for redress, unless, before the period expired, the payee precluded himself by representations adopting the signature, or otherwise assenting to the passage of title. The legal relations of plaintiff and defendant are not, as defendant suggests, like those existing between the depositor and his bank, or between drawer and drawee, where the terms of the contract prescribe what must be done and thereby give rise to the duty of immediate notice: see Marks v. Anchor Sav. Bk.,
Judgment reversed, record returned for further proceedings.