Snyder v. Corn Exch. Nat. Bank
| Citation | 70 A. 876,221 Pa. 599 |
| Decision Date | 02 June 1908 |
| Docket Number | 325 |
| Parties | Snyder, Appellant, v. Corn Exchange National Bank |
| Court | United States State Supreme Court of Pennsylvania |
Argued January 14, 1908
Appeal, No. 325, Jan. T., 1907, by plaintiff, from order of C.P. No. 4, Phila. Co., June T., 1906, No. 5,012, discharging rule for judgment for want of a sufficient affidavit of defense in case of George E. Snyder, Individually, and trading as Harrison, Snyder & Son, v. Corn Exchange National Bank. Affirmed.
Assumpsit to recover the amount of checks alleged to have been wrongfully paid by a bank.
The averments of the statement of claim and the affidavit of defense are set forth in the opinion of the Supreme Court.
The court discharged the rule for judgment for want of a sufficient affidavit of defense.
Error assigned was the order of the court.
The assignment of error is overruled and the order of the court discharging the rule for judgment is affirmed.
William S. Divine, with him George S. Graham, for appellant. -- The Corn Exchange Bank, defendant herein, can recover from the Real Estate Title Insurance and Trust Company or the banks of the clearing house which collected the proceeds of the forged indorsements, upon the facts of the case as stated in the affidavit of defense: Corn Exchange National Bank v National Bank of the Republic, 78 Pa. 233; Tradesmen's National Bank v. Third National Bank of Pittsburg, 66 Pa. 435.
The averment in the affidavit of defense that the checks were regularly deposited and paid in the usual course of business is no defense: Corn Exchange Nat. Bank v. Nat. Bank of the Republic, 78 Pa. 233.
The plaintiff, as a depositor in the defendant bank, is entitled to recover back money deducted from his account and paid out upon forged indorsements: Chambers v. Union Nat. Bank, 78 Pa. 205; Robb v. Pennsylvania Co., 3 Pa.Super. 254.
The affidavit of defense is insufficient to prevent judgment, because there is nothing in the power of attorney expressed or to be implied from the circumstances authorizing the forged indorsement of Charles Niemann's name, or authorizing the bank to pay on it.
The checks having been given in gambling transactions for an illegal consideration, are void, even if in the hands of an innocent holder for value under the act of April 22, 1794, 3 Sm. L. 177; P. & L. Dig. 2203: Harper v. Young, 112 Pa. 419; Unger v. Boas, 13 Pa. 601; Brua's Appeal, 55 Pa. 294-298; Comly v. Hillegass, 94 Pa. 132; Durr v. Barclay, 8 Pa. C.C. Rep. 285.
John Cromwell Bell, with him H. Gordon McCouch, for appellee. -- Where a depositor draws a check upon his bank payable to the order of a person who has no interest and is not intended to have any interest in the check or its proceeds, the check is in law payable to the order of a fictitious person.
Where a check is drawn and issued payable to the order of a fictitious person with the knowledge of the person making it so payable, the check is in law payable to bearer, and by paying the check to bearer the bank's duty to depositor is discharged.
A bank, in paying its depositor's checks, does not assume the risk of the genuineness or forgery of the indorsement of the name of a fictitious payee thereon: United Security Life Ins. & Trust Co. v. Central Nat. Bank, 185 Pa. 586; Land Title & Trust Co. v. Bank, 196 Pa. 230; Bank of England v. Vagliano, L. R. Appeal Cases (1891) 107; Phillips v. Mercantile National Bank of New York, 140 N.Y. 556 (35 N.E. Repr. 982); Coggill v. American Exchange Bank, 1 N.Y. 113.
Before MITCHELL, C.J., BROWN, MESTREZAT, POTTER, ELKIN and STEWART, JJ.
In determining whether the rule for judgment for want of a sufficient affidavit of defense was properly discharged by the court below, the following material averments in plaintiff's statement must be first considered: George E. Snyder, the plaintiff, trading and doing business as a broker in the city of Philadelphia, under the name of Harrison, Snyder & Son, was a depositor with the Corn Exchange National Bank, the defendant. He had in his employ a clerk named Edwin S. Greenfield, who was authorized to draw checks in his name against his deposit in the said bank for the special purposes stated in written power of attorney, lodged with the bank. This power of attorney was as follows: "Know All Men By These Presents, That we, Harrison, Snyder & Son, do make, constitute, and appoint Edwin S. Greenfield, our true and lawful attorney for us and in our name.
Against plaintiff's deposit with the defendant Greenfield, as attorney aforesaid, drew four checks payable to the order of Charles Niemann, amounting in the aggregate to $18,387.50. The first, for $6,000, was drawn on April 18, 1906; the second, for $1,800, on April 27, 1906; the third, for $2,587.50, on May 1, 1906, and the fourth, for $8,000, on May 3, 1906. These checks were paid by the bank and charged to the account of the plaintiff. They purported to have been endorsed by the said Charles Niemann, but the indorsements of his name were forgeries and were never authorized by him or the plaintiff. The said checks purported to have been indorsed in blank by said forged indorsements to the firm of R.M. Miner & Company, a copartnership, purporting to carry on a stock and grain brokerage business, based upon actual purchases, sales and deliveries, but actually conducting a gambling establishment, popularly known as a "bucket shop." The said four checks were deposited by the said R.M. Miner & Company with the Real Estate Title Insurance and Trust Company, of Philadelphia, which acted as a bank of deposit for the said R.M. Miner & Company. The said trust company indorsed three of the said checks, guaranteeing the previous indorsements, to certain banks in the city of Philadelphia for collection, through which they were collected. The fourth check was also indorsed by the said trust company, but without guaranteeing the previous indorsements. The defendant, the Corn Exchange National Bank, replying upon the guaranty by the Real Estate Title Insurance and Trust Company of the indorsements upon the three checks, and upon its indorsement of the fourth, paid each of said checks, to it, through its collecting agents.
Upon the averments that the indorsements purporting to be those of Charles Niemann were forgeries, that the Real Estate Title Insurance and Trust Company collected the proceeds of the checks with actual knowledge of the character of the business of the firm of R.M. Miner & Company, that the defendant had constructive notice of the business of said firm, and that the said checks were not given in due course of business, the plaintiff claims to recover from the appellee the amounts it paid on them.
Turning to the affidavit of defense we find the following averred by the defendant: The plaintiff had in his employ as his confidential clerk and manager, Edwin S. Greenfield, to whom he largely intrusted the conduct and management of his business, particularly that portion of it relating to the finances, and the said clerk or manager had, by virtue of the power of attorney of February 19, 1902, drawn many checks upon the defendant, amounting in the aggregate to many thousand dollars, which checks had been paid by the defendant on presentation and no payment had ever been questioned by the plaintiff. Greenfield after having drawn to the order of Niemann the four checks set forth in plaintiff's statement, delivered them to R.M. Miner & Company in the regular course of business, in payment of accounts due to the said firm. R.M. Miner & Company, after indorsing the said checks, deposited them with the Real Estate Title Insurance and Trust Company in the regular course of business, and the same were paid to the said trust company through the agencies set forth in plaintiff's statement. At the time each of the checks was drawn by Greenfield there were no business transactions pending between the plaintiff and Charles Niemann, and there were not due to him the amounts of said checks or any other sum or sums of money whatever. When Greenfield drew the said checks and forthwith delivered them to R.M. Miner & Company, he intended to cheat and defraud the plaintiff to the extent of $18,387.50 by having the checks paid to the said firm. He intended to write, and actually did write, the name of the said Charles Niemann on the back of the said checks in order To induce R.M. Miner & Company, and all others to whom they might be presented, to accept them as if they had been issued by the plaintiff to the said Charles Niemann in the regular course of business and had been indorsed by him, the payee named in them. When Greenfield, as attorney for the plaintiff, drew the checks to the order of Niemann, he well knew that the latter had no right to them, or any of them, and it was never intended by Greenfield that Niemann should receive them or the proceeds thereof. Niemann was not a real, bona fide payee, but was, in legal...
To continue reading
Request your trial
-
Snyder v. Corn Exch. Nat. Bank
... 70 A. 876221 Pa. 599 SNYDER v. CORN EXCH. NAT. BANK. Supreme Court of Pennsylvania. June 2, 1908. 70 A. 877 Appeal from Court of Common Pleas, Philadelphia County. Assumpsit by George E. Snyder, individually, and trading as Harrison, Snyder & Son, against the Corn Exchange National Bank to......