268 Pa. 147 | Pa. | 1920
Opinion by
November 15, 1911, one Wilcoxon deposited in the United States National Bank of Portland, Oregon, a check for $3,000, purporting to have been issued by the Everett Bank, of Everett, Pennsylvania, and signed by the cashier. It was drawn on defendant, the Union National Bank of Philadelphia, the representative of the Everett Bank in that city. The United States Bank credited Wilcoxon’s account with the amount of the check, endorsed it and forwarded it to its representative, the Franklin National Bank, of Philadelphia, for collection and credit. The check was received by letter by the latter bank on the 20th of November, 1911, was presented to the Union Bank through the cleariner-house and
Oitr inquiry, for a proper determination of the case in hand, naturally leads to a review of what was before this court on the former appeal (Union Nat. Bank v. Franklin Nat. Bank, supra), for it must be remembered that, under appellant’s present view of the case, we permitted Union Bank to take funds of the United States Bank, in the hands of its agent, Franklin Bank, when in defense of that action Franklin Bank and United States Bank could have set up the negative defense of estoppel arising from the negligence of the Union Bank in not exercising proper diligence to discover the forgery and notify the agent, Franklin, or the principal,
A proper study of the case of Union against Franklin Bank gives no warrant for the statement that the present action is but the logical sequence of what we there decided. This court, in that case, applied nothing more than what was considered as the controlling principles of law to the facts presented under the theory upon which the case was tried. It enunciated no new doctrine, nor did it promulgate any new theory of negligence, or right of action, nor invent any duties not heretofore generally known to be well-grounded in law. We will assume, for the purpose of our primary discussion of this case, Union Bank was negligent in not discovering the forgery and notifying the Franklin Bank, the agent; that Franklin Bank was an agent for collection, and the endorsement, “Pay to the order of any bank, banker, or trust company, all prior endorsements guaranteed: The United States National Bank of Portland, Oregon, B. W. Schmeer, Cashier,” was a restrictive endorsement and served to notify the Union Bank that it was dealing with an agent. We need not discuss this latter principle at length at this time. When the Union Bank attempted recoupment from the Franklin Bank in the first trial, whether it was under the Negotiable Instruments Act of this State, or the Act of 1849, its right was not an absolute one. It was governed and controlled by legal principles well stated by Mr. Justice Mitchell in Iron City Bank v. Fort Pitt Nat. Bank, 159 Pa. 46, 52: “The result of the Act of 1849 and the cases upon this subject is that the mere acceptance or payment of forged paper is no longer of itself a bar to the recovery of the money by the party paying, even though it be a bank or other drawee, nor is such party absolutely bound as at common law to discover and give notice of the forgery on the very day of payment. All
When Union Bank v. Franklin Bank, was on trial, the Franklin Bank limited its defense to antagonizing the Union’s claim as to the principal contention there asserted, when it confined its effort to showing it did not have the proceeds of the forged check in its possession, and would be prejudiced in that it could not protect itself against the United States Bank if a recovery was had.
When Union Bank demanded return of the proceeds of the forged check, from Franklin Bank, this hank notified United States Bank, plaintiff in the present action. Franklin was advised liability was denied, accompanied by the assertion: “Payment by a paying bank was made at the paying bank’s peril.” This was followed by a request for specific instructions, as Union insisted on payment and United States was assured that Franklin would do everything to protect their interests.
There is no question United States Bank took part in the trial against Franklin Bank and the former institution does not attempt in a single utterance to deny it. The entire theory of Union Bank in that case was that Franklin Bank had not changed its position for the worse, and it had the money. It was immaterial from its standpoint whether that bank was principal or agent; the funds derived from the forged check had not been paid out and consequently recoupment should be had regardless of negligence. The case was tried along these lines and Franklin endeavored to meet this issue, evidently with the idea it was the main point in the case. Bepeatedly we find this assertion as the principal legal proposition, “The Franklin Bank having paid the United States Bank, which in turn paid its depositor, Wilcoxon, the Franklin Bank was not in a position to protect itself as against the United States Bank,” appearing in that and other forms from the beginning to the end of the dis-
Of course, on Union’s theory of the case, it was only necessary to show that Franklin Bank had money in its hands belonging to the United States Bank; but, notwithstanding Union’s theory, Franklin, as agent of the United States Bank, was at liberty to make any defense the latter could have made to the same extent as if the action had been broug’ht against the United States Bank; but inasmuch as the question of estoppel was not presented for the court’s determination in the first suit,
Had the Franklin Bank defended in that case on the ground that Union’s negligence not only had a tendency to prejudice their right of recoupment from the United States Bank, but that their principal, the United States Bank, would be injured by permitting a recovery because it had actually parted with its money to the depositor and had changed its position for the worse, the first case would have assumed a different aspect; but instead, the defense interposed was that, by reason of this negligence, the Franklin Bank would be prejudiced in that it was not in a position to protect itself as against the United States Bank. How could this be possible when they had at all times about ten times the amount of the proceeds of the forged check in their hands; and, inasmuch as they were the agent, acting under instructions from their principal, in no event or in no sense could they be prejudiced.
Defendant did not assert the defense it was entitled to make and which it could have asserted if it had so desired and could have made it material: State Hospital for the Criminal Insane v. Water Co., supra. It is true that at the first trial evidence was submitted tending to show that the Portland Bank had handled the paper, and the time wherein the payments were made to Wilcoxon on account of his deposit. Whether this evidence was introduced for the purpose of showing negligence of the Union Bank in connection with the contention that Franklin could not protect itself, as it claims, can only be discovered from the legal position assumed in that case. The case was dealt with here and in the court below on the theory upon which counsel tried it. Under the principles of law which we have here enumerated, the United States Bank having had notice of the action and an opportunity to defend, the judgment against Franklin, agent, concluded the principal, the United States Bank.
On the question of undisclosed agency, the agent may be regarded and charged as the actual principal. “An agent who conceals the fact of his agency and contracts as the ostensible principal is liable in the same manner and to the same extent as though he were the real principal in interest”: I Meechem on Agency (2d ed.), sec. 1410. “A hank to which a draft is endorsed and sent for the purpose of collecting it as agent of the endorser, and which transacts the business without disclosing its agency, may be regarded and charged as principal by those with whom it thus deals. It will he no answer that It is the uniform custom of banks to transact such business without disclosing their agency”:' 2 Richie on Banks and Banking, sec. 174, p. 1498. An undisclosed agent may defend upon the ground of estoppel by negligence, as the principal may defend; but, if it appears that the money is still in his hands, he will not be permitted to keep it, notwithstanding the negligence of the payer. There was some misunderstanding- on this precise point and the doubt as to its exact relation with the United
Having held, under the theory upon which the case was tried, that no estoppel was created by the facts in that case, it is inconceivable that the court will now, between the same parties, decide they created a cause of action. Having failed to take advantage of the defense that was open to them in the first trial, they cannot now use that defense as a substantive right on which to base an action. We, therefore, conclude that the plaintiff should have placed its entire case before the court when its agent, the Franklin National Bank, was sued; they were not precluded by the trial court from so doing in the first suit; the way was open to them, but they neglected to assert their right, or to properly assert it, and cannot now complain. It would be intolerable to permit courts to be made the vehicle to try over and over again mistaken ideas as to how cases should be tried.
We do not mention the fact of payment before the advice of credit was received as determining what would
The judgment of the court below is affirmed.