271 Pa. 107 | Pa. | 1921
Opinion by
I. Leiberman was a bookkeeper for Wapner & Rushansky, and was paid his salary, sometimes in cash and sometimes by checks drawn by them upon their account in the Union National Bank, the plaintiff in this case. On December 17, 1917, Leiberman requested Lawrence Hershman to cash a check of that date, which purported to be drawn to his, Leiberman’s, order, by his employers, on their account with plaintiff. Hershman refused to do this until he was sure the check was good, whereupon, by agreement, it was endorsed by Leiberman, deposited by Hershman in his account with the Commonwealth Title Insurance & Trust Company, which, in turn, endorsed and delivered it to the Bank of North America, so that it could be collected through the Clearing House Association, of which plaintiff, the Bank of North America and defendant, the Farmers & Mechanics National Bank, were members, but the trust company was not. Having received notice that the check had been duly paid by plaintiff, Hershman gave to Leiberman the amount specified therein. Subsequently, Hershman cashed for Leiberman twelve other checks, drawn in the same way, all of which were endorsed by the latter; these were endorsed and deposited by Hershman in his account with the trust company, were endorsed by it, and defendant collected the amount thereof from plaintiff, through the Clearing House Association. In this way, eight of these checks were paid by plaintiff prior to January 31, 1918, and, on that date, were deducted in the settlement of Wapner & Rushansky’s account without objection by the latter; they did not, however, receive the forged papers until February 15, 1918, when, in accordance with their custom, they called at the
Plaintiff demanded of defendant that it repay the amount of the forged checks, and, this being refused, brought the present suit. At the trial, the court below refused defendant’s point for binding instructions, and directed a verdict for plaintiff for the aggregate of the twelve checks with interest; later, the court in banc dismissed defendant’s motion for judgment non obstante veredicto and entered judgment on the verdict, whereupon defendant appealed.
Plaintiff claims that, under section 10 of the Act of April 5, 1849, P. L. 426, it can recover back the amounts paid to defendant; and, though conceding, on the authority of Iron City National Bank v. Fort Pitt National Bank, 159 Pa. 46, it “is still presumed to know [its depositor’s] signature,” “the principles of the commercial law are still applicable, and there is still the same necessity as before for care, diligence and proper notice under the settled rules of the law of negotiable paper,” and “the statute does not_____ .exempt [plaintiff] from the
It is not necessary to consider the disputable question (3 Ruling Case Law 524), as to whether or not, upon the deposit of the checks by Hershman, the title remained in him, — the trust company and defendant being simply his agents for collection, — or whether it presumptively passed to the companies in turn; for the same result is reached in either event.
The opportunity to proceed at once against a forger, is a valuable one, the deprivation of which, by failure to give notice promptly, conclusively determines that loss has resulted (for there is ho way by which it can be satisfactorily determined there was no loss: Leather Manufacturer’s National Bank v. Morgan, 117 U. S. 96; McNeely v. Bank of North America, 221 Pa. 588), unless it. is shown there is on hand a fund, belonging to the forger, out of which defendant can reimburse himself in whole or in part: Union National Bank v. Franklin National Bank, 249 Pa. 375; United States National Bank v. Union National Bank, 268 Pa. 147.
The only question which now remains open is, therefore, on whom is the burden of proof when such a defense is suggested? In the present case, plaintiff evidently assumed it had the burden (and we think correctly), for it produced evidence to show that the trust company was, and at all times had been, indebted to- defendant bank, in a sum largely in excess of the amount of the forged checks. The point has not been squarely raised, however, in any of our prior cases, and must, therefore, be decided on principle.
Starting with the admitted facts that plaintiff wrongfully paid the forged checks, failed to discover the forgeries and to give notice thereof in time, and that somebody must suffer as a result thereof, and considering that, as already pointed out, a conclusive presumption of injury to the other parties to the checks arises, unless it is shown assets of the wrongdoer are available to make good the loss, we have a case wherein plaintiff seeks to escape the result of its own negligence; and hence we have no difficulty in holding it falls within the ordinary rule that
This being so, it necessarily follows plaintiff was required to prove the circumstances which it alleged should relieve it from suffering the loss caused by its negligence; and it could do this only by showing the relations of the parties to each other and to the transaction, and the facts, growing out of them, which justified the court below in directing a verdict in its favor. The record, however, is wholly barren of proof of anything justifying even the submission of this question to the jury. If we assume the trust company and defendant were collecting agents for Hershman, then (as this defense is one which can be made in the present suit, even though defendant be treated as an undisclosed agent: United States National Bank of Portland v. Union National Bank, 268 Pa. 147), the question is: Has Hershman anything of Leiberman’s out of which he could have made good his loss, and, since there is no proof he had, plaintiff cannot recover. If, on the other hand, we assume defendant was the owner of the checks, the result is the same; for, as between defendant, the trust company and Hershman, the loss, if any, would fall upon Hershman, under the contention how made by plaintiff; and defendant can set up, in this suit, any defense which Hershman could have made, if he had been sued by plaintiff, as he might have been under the Act of 1849: 21 Ruling Case Law 1065; Mortland v. Himes, 8 Pa. 265; Metropolitan National Bank v. Merchants and Manufacturers Bank, 155 Pa. 20. This is the same principle (underlying a large body of the law) which permits an agent to defend upon any ground that would have availed his principal, if sued. It is true, in the instant case, defendant is not strictly a surety, nor, on the alternative now being considered, an agent;
The situation, so far as relates to all the checks but the last two, is, therefore, that plaintiff paid them to its own loss; and since it negligently failed to discover the forgeries until after the time when, with care and diligence, it should have done so, and all other parties have acted in good faith, and have no assets of the forger from which to recoup the loss, it cannot recover back the amounts paid, but is relegated to a claim against the forger alone.
As to the last two checks, however, a different question arises. A sufficiently prompt notice of the forgeries thereof was given, and the defense to the recovery thereon (which also applies equally to most of the prior checks) falls within another principle. Having paid the earlier checks without objection, plaintiff’s “silence was tantamount to a declaration [that they were genuine] and, in afterwards honoring checks signed by the same person, the [defendant] bank had a right to consider the fact that those signatures had been at least tacitly recognized by the plaintiff as genuine”: Myers v. Southwest
Appellee further contends that, even though we reverse, this court should not enter judgment for defendant, “until the question of appellee’s and Hershman’s possible negligence had been determined in its [defendant’s] favor by the jury.” We are not interested in “possible” negligence, however, since no actual negligence by Hershman is shown; plaintiff’s negligencé is conclusively established, and it did not sustain the defense of “no loss,” upon which it relied.
The judgment of the court below is reversed and judgment is here entered for defendant non obstante veredicto.