Morris Bailey S. Co. v. Bk. of Pgh. Nat. A.

Argued March 19, 1925. Defendant appeals from a judgment entered in favor of plaintiff for a sum alleged to be due as a result of issuance of certain certified checks, drawn to its order, and to which its name was fraudulently endorsed, and placed to the credit of one Leder, an agent of Schwarz, who carried on a collection agency in the City of Pittsburgh. The facts surrounding the transaction are disclosed by the immediately preceding case reported, in which Schwarz was the plaintiff, and by the opinion previously rendered by this court, in which a judgment for defendant, based on a statutory demurrer, was reversed: Morris Bailey Steel Co. v. Bank of Pittsburgh, 277 Pa. 81.

The obligations, forming the basis of the present suit, were drawn to the order of the plaintiff, and illegally signed by Leder, agent of Schwarz, and deposited to the personal account of the former in the Potter Title Trust Company, and, in due course of business, cashed. He had no authority to so act, and to appropriate the proceeds to his own use. But one defense could possibly be interposed here, as previously indicated in the opinion of this court. If there was negligence in giving notice of the forgery, the defendant, if injured thereby, had the right to complain. The record, however, discloses that the bank knew of the wrongful act of Leder, at least as soon, if not sooner, than the plaintiff. It cannot be said that it was prejudiced by any act on the part of the Morris Bailey Steel Company.

The judgment is affirmed.