177 A.D. 438 | N.Y. App. Div. | 1917
The action was brought to recover the amount of two checks drawn by the plaintiff upon its account with the defendant — one dated March 18, 1912, in favor of Rena C. Phipps, for the sum of $1,983.26, and the other dated March 25, 1912, in favor of Ella M. Wade, for the sum of $1,633.10. Both checks were sent by the plaintiff to Arthur G. Eaton, its manager and agent in Portland, Me., for transmission to the payees in payment of claims against the plaintiff. Eaton forged the names of the payees and deposited the checks in his account in the Fidelity Trust Company of Portland, Me., through which they were collected in due course from the defendant, which charged the amount thereof to the plaintiff’s account.
The material allegations of the complaint, including those of the forgeries of the names of the payees, were admitted,' the formal denials contained in the answer being withdrawn at the trial and the defendant taking the affirmative.
Briefly stated the defense is that the plaintiff, by the exercise of ordinary care and diligence, could have ascertained that the indorsements on the Wade and Phipps checks were forgeries, and could have notified the defendant bank in time to enable it to stop payment on the checks. It is claimed that at the time of the forgeries in question the plaintiff knew, or ought to have known, that Eaton had committed other for
All of the forged checks were issued by the plaintiff in the usual course of its business for death claims, except the Cuzner check which was issued for the cash surrender value of a policy. The forgery in each instance was of the payee’s name. There was no forgery as to the amount, nor as to the name of the drawer. Those facts are important as hearing on the question of what care the plaintiff was bound to exercise as between itself and the bank to discover the forgery. The plaintiff had an elaborate system for checking up its vouchers as they came from the bank. It had a list of all the checks drawn by it. This was compared with the bank book and check book and the returned vouchers. The face of the vouchers was examined and the indorsements were examined to see if they corresponded with the name of the payee. There was no effort made to ascertain if the signature of the payee was genuine. The defendant claims that it was plaintiff’s duty to make such examination by comparing the indorsement with the genuine signature of the payee then on file in its office and attached to the proofs of death. There is no authority for this contention. It" would put a burden upon the depositor altogether too heavy to be carried by any large business concern issuing, as it often does, hundreds of checks each day.
The court also refused to charge that “the plaintiff, the Prudential Insurance Company of America, had the right to assume upon the return of the two checks, the subject of this action, that the defendant, the National Bank of Commerce in New York, had ascertained that the indorsements upon the said checks were genuine; and that the plaintiff is not presumed to know the signatures of the payees. ” In refusing the request the court said: “Why, of course, the bank is not chargeable with knowledge of the correct signature of the payee, but the bank is chargeable with reasonable diligence to see that the signature is not a forgery. Otherwise I refuse to charge.”
The plaintiff was entitled to have the jury instructed as requested, and it was error to limit the duty of the defendant to the exercise of reasonable diligence. (Shipman v. Bank S. N. Y., 126 N. Y. 318.)
As the errors pointed out require the reversal of this judgment, it is unnecessary to refer to others apparent upon the record.
The judgment and order are reversed, and a new trial granted, with costs to appellant to abide the event.
Clarke, P. J., Laughlin, Dowling and Smith, JJ., concurred.
Judgment and order reversed, new trial ordered, costs to appellant to abide event.