119 A. 910 (Pa. 1923), 97, National Union Fire Insurance Co. v. Mellon National Bank

Docket Nº:97
Citation:119 A. 910, 276 Pa. 212
Opinion Judge:MR. JUSTICE SCHAFFER:
Party Name:National Union Fire Insurance Co. v. Mellon National Bank, Appellant
Attorney:John Murray Redden, with him Ralph H. Frank and Reed, Smith, Shaw & Beal, for appellant. J. Merrill Wright, of Wright, Chalfant & McCandless, with him Hartwell Cabell and Robert A. Rundle, for appellee.
Judge Panel:Before MOSCHZISKER, C.J., FRAZER, WALLING, SIMPSON, SADLER and SCHAFFER, JJ.
Case Date:January 03, 1923
Court:Supreme Court of Pennsylvania
 
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Page 910

119 A. 910 (Pa. 1923)

276 Pa. 212

National Union Fire Insurance Co.

v.

Mellon National Bank, Appellant

No. 97

Supreme Court of Pennsylvania

January 3, 1923

Argued: October 17, 1922

Appeal, No. 97, Oct. T., 1922, by defendant, from judgment of C.P. Allegheny Co., Jan. T., 1918, No. 778, on verdict for plaintiff, in case of National Union Fire Insurance Company, to use of William M. Alberti v. Mellon National Bank. Affirmed.

Assumpsit to recover money paid out on forged drafts. Before EVANS, J.

The opinion of the Supreme Court states the facts.

Verdict and judgment for plaintiff for $6,430.21. Defendant appealed.

Errors assigned, inter alia, were refusal of defendant's motion for judgment n.o.v., quoting record, and various instructions appearing by the opinion of the Supreme Court, quoting record.

The assignments of error are all overruled and the judgment is affirmed.

John Murray Redden, with him Ralph H. Frank and Reed, Smith, Shaw & Beal, for appellant. -- When the drafts were presented to defendant for payment they were payable to bearer and defendant had no concern with the question of the genuineness or authenticity of the endorsements: Land T. & T. Co. v. Bank, 196 Pa. 230; Marcus v. Bank, 57 Pa.Super. 345; Snyder v. Bank, 221 Pa. 599.

The circumstances surrounding the issuance of these drafts, their endorsement, acceptance and presentment for payment were such as to relieve the defendant of any responsibility in relation to the genuineness or authenticity of the endorsements: W.U. Tel. Co. v. Bank, 17 Colo.App. 229.

A principal is chargeable with all the knowledge which an agent secured while acting within the scope of his employment: Gunster v. Heat & Power Co., 181 Pa. 327; Lilly v. Bank, 178 F. 53; Myers v. Bank, 193 Pa. 1.

The court erred in taking from the jury the question of the negligence of James & Co., plaintiff's general agent: Texas & Pac. Ry. v. Behymer, 189 U.S. 468.

J. Merrill Wright, of Wright, Chalfant & McCandless, with him Hartwell Cabell and Robert A. Rundle, for appellee. -- The drafts in suit were not payable to bearer: Penna. M.L. Ins. Co. v. Bank, 70 Pa.Super. 34.

Defendant was not relieved of responsibility in relation to the genuineness or authenticity of the endorsements.

The purchase by James & Co. of one-half the claim from National Union Fire Insurance Co. and the subsequent assignment to the use-plaintiff would not prevent recovery.

Before MOSCHZISKER, C.J., FRAZER, WALLING, SIMPSON, SADLER and SCHAFFER, JJ.

OPINION

Page 911

[276 Pa. 215] MR. JUSTICE SCHAFFER:

This action was assumpsit brought by plaintiff fire insurance company, a depositor in defendant bank, to recover the amount paid out by the latter and charged to the former's account on drafts on which the payees' endorsements were forged. The appeal is by defendant from a judgment on the verdict in plaintiff's favor.

Plaintiff insurance company is located in the City of Pittsburgh, where appellant's bank is also located.

The circumstances giving rise to the suit are these: James & Company were general agents for plaintiff in the City of New York authorized to place insurance, adjust losses and draw drafts on it for payment. One Carty was employed by them as loss clerk, having charge of the adjustment of losses. He had authority to adjust losses of the character for which the drafts in question were drawn. He presented the proofs of loss to James & Company of fires which had not taken place on properties covered by policies in plaintiff company issued by them, received the drafts in payment for the supposed losses drawn to the policyholders, forged the names of the payees on the drafts, deposited them in banks which forwarded them to Pittsburgh for acceptance by plaintiff, the latter accepted them without investigation as to the genuineness of the payees' signatures, and they were paid by defendant bank on which they were drawn and charged by it to plaintiff's account. After discovery of the forgeries, suit was brought to recover from defendant the amount of the drafts. At the trial, the only question submitted to the jury was whether the endorsements of the payee had been forged; the verdict determined they had been.

[276 Pa. 216] Defendant contends that binding instructions should have been given for it and there should now be judgment in its favor non obstante veredicto (1) because when presented to defendant for payment the instruments in legal effect were payable to bearer; (2) because the circumstances surrounding the utterance, endorsement and acceptance of the instruments were such as to

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authorize the defendant to pay them without regard to the authenticity of the endorsements; (3) because plaintiff is chargeable with knowledge of the frauds which took place approximately five years before it gave any notice thereof to appellant; (4) because the circumstances of a settlement made by plaintiff with James & Company against whom it had brought suit to recover...

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