40 A. 97 (Pa. 1898), 270, United Security Life Insurance and Trust Co. of Penna. v. Central National Bank of Phila

Docket Nº:270
Citation:40 A. 97, 185 Pa. 586
Party Name:United Security Life Insurance and Trust Company of Penna., Appellant, v. Central National Bank of Phila
Attorney:Henry LaBarre Jayne, with him Biddle & Ward, for appellant. Rowland Evans, with him Edw. L. Perkins and R. L. Ashhurst, for appellee.
Case Date:May 02, 1898
Court:Supreme Court of Pennsylvania

Page 97

40 A. 97 (Pa. 1898)

185 Pa. 586

United Security Life Insurance and Trust Company of Penna., Appellant,


Central National Bank of Phila

No. 270

Supreme Court of Pennsylvania

May 2, 1898

Argued: January 12, 1898

Appeal, No. 270, July T., 1897, by plaintiff, from order of C.P. No. 4, Phila. Co., June T., 1894, No. 897, dismissing exceptions to report of referee. Reversed.

Assumpsit on checks.

The case was referred to Richard C. Dale, Esq., who reported as follows:

1. On December 6, 1893, the plaintiff drew its check, signed by its president and treasurer, to the order of H. J. Verner, teller, which check was by the said H. J. Verner indorsed to the order of Ralph H. Grant. This check upon its face bore the words "In set. agree. No. 2259, Ralph H. Grant." The circumstances under which the check was drawn were these: Early in October, 1893, Ralph H. Grant, of Scranton, applied to the plaintiff for a loan of $1,800, to be secured by mortgage on property in Scranton on which Grant proposed to erect a house. It was understood between Grant and C.S. Woodruff, the attorney of the plaintiff company in Scranton, that the plaintiff should not actually pay over to Grant the amount loaned until the house was fully completed, so as to make the property good security. In accordance with the method established by the plaintiff corporation in the conduct of its business, Grant, the borrower, was to take out a policy of life insurance for the amount of the loan, so that in case of death prior to the repayment of the loan, the proceeds of the life insurance policy would cancel the mortgage debt and the property would pass to his heirs free from any incumbrance. The books of the corporation plaintiff show as follows:

Application register, defendant's exhibit "A," that Grant's application bears date October 4, 1893, and was received October 5, 1893. The loan was approved by the executive committee of the board of directors under date of October 10, 1893, and the papers were sent to the plaintiff's conveyancer on October 23, 1893, the agreement for the loan then receiving a record number to identify it in the company's business as No. 2259. On November 3, 1893, the papers connected with the mortgage were delivered to the Commonwealth Title and Trust Company for their examination, and on December 5, 1893, the plaintiff's books show that a settlement certificate was received from the title company, and that on the same day N. A. Williams, who was settlement officer of the plaintiff corporation, filled up what is called a voucher for the drawing of a check for the amount of the loan. The plaintiff was unable to produce the particular voucher for this transaction, as it has probably been destroyed, but the form of voucher used in the business of the corporation plaintiff shows that such voucher contains the name of the applicant for the loan, the agreement number, the amount of the loan. This voucher in the regular course of business is prepared and signed by the settlement officer, who at the date of this transaction was N. A. Williams. It is approved by the signature of the president and afterwards signed by a bookkeeper, who draws from the check book a check in accordance with the data mentioned in the voucher. The check drawn in accordance with the voucher just referred to is the $1,800 check above mentioned. The signature of the president and treasurer is admittedly genuine, as is also the indorsement of H. J. Verner, teller. The further indorsement upon the check of "Ralph H. Grant" is forged, and from the evidence the referee finds the forgery was committed by N. A. Williams, the settlement officer of the corporation plaintiff, who, having the check in his possession after its execution in the regular course of business, forged the signature of Grant, placed his own name upon it, and deposited it in his personal deposit account with the Commonwealth Title and Trust Company, who subsequently deposited it to their credit in the deposit account kept with the Farmers' and Mechanics' National Bank, by whom the check was collected through the clearing house from the Central National Bank, the amount thereof being charged to the plaintiff's deposit account. This occurred in the regular course of business within two or three days; the exact date does not appear in the evidence. On December 31, the account of the plaintiff with the defendant was settled, and entry was made in plaintiff's bank book showing the balance on deposit and the checks paid were returned. The checks thus paid and returned included the $1,800 check above referred to. The plaintiff's deposit book was afterwards settled monthly, at the end of each month, and the balance struck was of course based upon the balance of December 31.

Upon the application register of the corporation plaintiff, note was made of the drawing of this check on December 6, 1893, and the fact of this drawing was also entered on other books of the plaintiff, kept in the regular course of business, as follows:

In ledger, defendant's exhibit "B," page 213, appears this entry: "December 6, 1893, R. H. Grant, agreement No. 2259, cash $1,800.00, mortgage investment $1,800.00."

In book entitled current analysis, defendant's exhibit "C," appears the following: "Grant No. 2259, $1,800.00."

In the book of record of loans kept by the actuary, defendant's exhibit "E," there is this entry: "12/93, No. 2259, Grant, Ralph H., page 30, Scranton, Pa., $1,800.00."

In loan register, defendant's exhibit "H," the transaction appears at page 254, giving the same number of mortgage loan No. 2259. The stub of the check book from which this check was drawn, defendant's exhibit "J," shows as follows: "No. 4669, 12/6/93, Ralph H. Grant, No. 2259, $1,800.00."

The plaintiff neither at or about the time this check was drawn received any voucher or receipt from Grant of the receipt of the money.

2. On March 27, 1894, N. A. Williams, who still was in the employment of the corporation plaintiff as its settlement officer, filled up another voucher for $1,800 for the same loan of Ralph H. Grant and procured another check to be drawn, signed by the president and treasurer, for $1,800. This check was indorsed to the order of the Commonwealth Title Insurance and Trust Company by the plaintiff's teller, and the proceeds of the check were used by the title company through whom the settlement for the Grant mortgage was made, in paying to Grant the amount of the loan less expenses. The voucher of March 27, 1894, as drawn, was for the same amount, and purported to be in settlement of the same transaction as that of December 6, 1893, the agreement number, No. 2259, being noted on it. The check was for $1,800, drawn in accordance with this voucher bearing date March 27, 1894, and is also expressed to be in settlement of agreement No. 2259, Ralph H. Grant. The stub of the check No. 5018, dated March 27, 1894, for $1,800, refers to agreement No. 2259, Ralph H. Grant, in this respect being similar to the stub of the check of December 6, 1893. On March 27, 1894, at the date when the second check was drawn, the plaintiff's application register showed that a check had been drawn on December 6, 1893, in settlement of the transaction. The plaintiff's ledger at page 314 contains an entry, "Ralph H. Grant, agreement No. 2259, cash $1,800.00, mortgage investment $1,800.00," and is in terms a duplication of the entry made on the same ledger at page 213, under date of December 6, 1893.

In the plaintiff's current analysis book Williams made a false entry of the number for the loan of March 27, 1894, it appearing in the same as No. 2368.

The plaintiff's loan register book shows that No. 2368 refers to a loan made to one Joseph L. Vandegrift, which is marked across in red ink, "Fallen through N.A.W."

The same false number is entered in plaintiff's actuary's loan...

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