Myers v. Southwestern National Bank

Opinion by

Mr. Chief Justice Stebbett,

The only testimony introduced on the trial of this case was that of the plaintiff himself and his witnesses; none was offered by the defendant bank. When plaintiff closed his case the learned trial judge instructed the jury “ to find a verdict for the defendant,” which was accordingly done, ahd judgment was afterwards entered on the verdict. The binding instruction under which the jury acted constitutes the only specification of error.

The averments of fact ón which the plaintiff’s claim was based are fully set forth in his statement and need not be recited here at length.

This suit was brought to recover §13,090, deposited by him in the defendant bank, and paid out by it, as he alleged, on unskilfully executed forgeries of checks, made by his confidential clerk and bookkeeper, without a careful examination by the proper bank officers of the signatures thereto, because of their acquaintance with and confidence in the forger. He further substantially alleged that said forged checks were abstracted and destroyed by said clerk, who also falsified his (plaintiff’s) books and accounts so as to make the apparent balances in the check book and deposit book correspond, and that said falsification was so skilfully done as to deceive not only the plaintiff but also expert accountants employed by him to examine his books, checks and accounts. He further averred that as soon as the fraud was discovered the forger was arrested, convicted and sentenced, and the defendant bank was forthwith notified of the loss, but it declined to pay any part thereof.

It was shown on the trial that in March, 1891, the defendant bank opened an account with the plaintiff as a depositor in the usual form, and from that time, for the period of over two years and a half, his deposits, made in the ordinary way, aggregated over §622,000. During all that time, as well as before, plaintiff had in his employ said confidential clerk and bookkeeper, to whom he specially intrusted the business of attending to his. bank accounts. That duty included making deposits, occasionally handing in the bank book to be written up and balanced, and, when that was done, the further duty of receiving the canceled checks, etc., with the payment of which the bank had credited itself, and delivering the same to the plaintiff for examination,, approval, etc. In the same connection, it was the duty of the clerk to verify the bank book, as the same was written up and balanced from time to time by the bank, and report the result. to the plaintiff. This he professed to do, but, in fact, he falsely reported that the balance, etc., were correct.

From March, 1891, to November, 1893, the clerk forged checks to the amount of the claim in this case, which were paid by the bank and charged to plaintiff in his bank book. For the purpose of concealing these forgeries, he falsified his employer’s books, and, by misadditions and missubtractions, forced the balances in the check book so as to make them agree with those in. the bank book. During the period above mentioned, plaintiff’s bank book was balanced twelve times. The first settlement included two forged checks, one $800 and the other $200. The last settlement included a $350 forged check. The other forgeries were respectively included in the intermediate settlements. At each settlement the amount of each check, not previously settled and canceled, was entered on plaintiff’s bank book by the bank as a charge against him, and the book, together with the checks, was delivered to his clerk for the purpose of examination and verification. If, at the time of each settlement, the forged checks had been examined by the plaintiff, or, if the number and the aggregate amount of the checks had been compared with the number and amounts of the checks separately entered in the bank book, or, if the checks had been compared with the stubs of the check book, or, if the additions of the deposits and checks on the checkbook had been examined, the forgery would have been discovered. Neither of these was done, for the reason that plaintiff’s unfaithful clerk, who was deputed by him to receive the checks, etc., from the bank, take them to the office and compare the amounts, etc., with the bank book, abstracted and destroyed the forged checks, and failed to call his employer’s attention to the discrepancies which undoubtedly would have resulted from a proper comparison and examination. He did tills because he himself was the forger. The result was that, for more than two years and a half after the first forged checks were paid, no complaint was made and no notice of any error in the settlements was given to the bank. It was not the bank’s fault that the first forgeries were not promptly discovered and notice thereof given. If plaintiff’s duty to the bank had been performed at the proper time the fact would have appeared that the bank had charged plaintiff, on his bank book, with the payment of two items ($300 and $200) for which no vouchers appeared among the checks handed to him by his clerk. These vouchers, the two forged checks, had been abstracted and destroyed by the latter. No objection having been made at the time of the first settlement, the bank had a right to assume that everything was correct, including the two checks purporting to be signed by him. His silence was tantamount to a declaration to that effect, and, in afterwards honoring checks signed by the same person, the bank had a right to consider the fact that these signatures had been at least tacitly recognized by the plaintiff as genuine.

While the plaintiff was not chargeable with the knowledge of his clerk that the latter had committed the forgery, he was clearly responsible for the acts and' omissions of his clerk in the course of the duties with which he was intrusted, viz: to receive the checks from the bank, take them to his employer’s office, compare the amounts thereof with the amounts in the bank book and check book, etc.

In view of the uncontradicted evidence as to the foregoing facts, it cannot be doubted that as between the bank and the plaintiff the latter alone should be. held responsible for the consequences resulting from the failure to examine the checks in question and approve or reject them within a reasonable time. In contemplation of law, the delivery of the checks to plaintiff’s clerk was a delivery by the bank to the plaintiff himself, as the basis on which its credits were claimed. The bank was therefore entitled to have them examined and, if rejected, returned within a reasonable time.' That was not done, and because of plaintiff’s failure to perform his duty in that regard, he should not be permitted to recover. Any other rule would be inconsistent, not only with general and long established custom, but also with well settled principles of law on the subject: Leather Manufacturers’ Bank v. Morgan, 117 U. S. 96, 107; United Security, etc., Co. v. Bank, 185 Pa. 586.

We find no evidence that required submission of the case to the jury. There was no conflict of testimony as to the failure of the plaintiff to perform the duty which, under the undisputed evidence, he owed to the defendant; nor was there any evidence of negligence on the part of the bank that should have been submitted to the jury. The checks purporting to be signed by the plaintiff were destroyed, and of course they were not produced. There was not a particle of evidence that the signatures were not such complete facsimiles of plaintiff’s signature as to be impossible of detection, even by an expert. As correctly stated by counsel for the bank, the clerk did say in reply to questions put by plaintiff’s counsel, that he was not an expert penman, and that he had never before had any experience in forging other people’s names, but he was not asked, and did not say, that the signatures were not made—either by the use of tracing paper or otherwise—so like the originals that they could not be detected by an ordinary inspection. On this point, negligence is not to be presumed, and hence the presumption must be in favor of the bank. In the absence of any evidence, from the signatures themselves or -from witnesses, that there was any difference between them and plaintiff’s signature, which could be detected by the eye, it must be assumed that the forgery was of such a character that the bank acting with due care and caution was deceived by it. In fact there was no evidence from which the jury would have been warranted in drawing the conclusion that the bank in honoring the checks acted negligently.

After a careful consideration of the evidence, our conclusion is that there was no question of fact that should have been submitted to the jury, and hence there was no error in directing them to find for the defendant.

The judgment is therefore affirmed.