Bank of Detroit v. Standard Acc. Ins. Co.

• Decision Date: 04 December 1928
• Docket Number: No. 45.,45.
• Citation: 245 Mich. 14,222 N.W. 134
• Parties: BANK OF DETROIT v. STANDARD ACC. INS. CO. et al.
• Court: Michigan Supreme Court

245 Mich. 14

222 N.W. 134

BANK OF DETROIT

v.STANDARD ACC. INS. CO. et al.

No. 45.

Supreme Court of Michigan.

Dec. 4, 1928.

Error to Circuit Court, Wayne County; John G. Stone, Judge.

Suit by the Bank of Detroit against the Standard Accident Insurance Company and another. Judgment for defendants, and plaintiff brings error. Affirmed.

Argued before the Entire Bench.Anderson, Wilcox, Lacy & Lawson, of Detroit (C. J. Huddleston, of Detroit, of counsel), for appellant.

Lightner, Oxtoby, Hanley & Crawford, of Detroit, for appellees.

POTTER, J.

The bank of Detroit brought suit against the Standard Accident Insurance Company and the Fidelity & Deposit Company of Maryland. The defendants executed to plaintiff a bond in the amount of $250,000, indemnifying the Bank of Detroit against ‘any loss through the payment, whether received over the counter or through the clearing house or by mail, of forged or raised checks, of genuine checks bearing forged indorsements, or the establishment of any credit to any customer on the faith of such checks.’ The Strathmoor Lumber, Coal & Supply Company obtained a certified check payable to the order of the American Investment Company in the amount of $1,000. This check was indorsed, ‘American Investment Company, by J. P. Lynch,’ and deposited to the personal credit of J. P. Lynch, who subsequently withdrew the money from the plaintiff bank. Plaintiff was compelled to refund the $1,000 to the American State Bank, drawee, and defendants refusing to pay, this suit was instituted to recover the $1,000. There was judgment for defendants, and plaintiff brings error. The sole question in the case is whether this indorsement was a forgery or a false and fraudulent assumption of authority.

In Regina v. White, 2 Carrington & Kirwan's Rep. 404, the prisoner was indicted for forging an indorsement on a bill of exchange with intent to defraud. It was signed, ‘Per procuration, Thomas Tomlinson, Emanuel White.’ Defendant was convicted. The case was afterwards considered by the 15 judges who held the conviction wrong. Indorsing a bill of exchange under a false assumption of authority to indorse it ‘Per procuration’ is not forgery, there being no false making.

In the case of Charles Windsor, 6 Best & S. 522, Windsor was charged with forgery. He was the paying teller of the Mercantile Bank of London, and made false and fraudulent entries upon his books to conceal his crimes, and embezzled upwards of $200,000. Chief Justice Cockburn said:

‘No doubt this was a false entry, and made for fraudulent purposes; but it is clear that the offense did not amount to forgery. We must take the term ‘forgery’ in the extradition act to mean that which by universal acceptation it is understood to mean, namely, the making or altering a writing so as to make the writing or alteration purport to be the act of some other person, which it is not.'

In Rex v. Arscott, VI Carrington & Payne's Rep. 408, the defendant was indicted for forging and uttering, knowing it to be forged, an indorsement on a bill of exchange. He indorsed, ‘Received for R. Aickman, G. Arscott.’ It is said:

‘The words are-‘Received for R. Aickman, G. Arscott.’ I take it, that, to forge a receipt for money, is writing the name of the person for whom it is received. But, in this case, the acts done by the prisoner were, receiving for another person, and signing his own name. Under these circumstances the prisoner must be acquitted upon this indictment.'

In Re Tully (C. C.) 20 F. 812, the only question presented was whether the offense with which the defendant was charged constituted forgery. He was a submanager of the Preston Banking Company, Limited, and had general authority from the bank to draw checks, and he was charged with drawing a check for £>>>1,000 signed per pro. the Preston Bank Company, G. T. Tully, submanager. He received the money in person, and rendered to the accountant's bureau of the bank the slip signed ‘P,’ converted the money to his own use, and absconded. It is said:

‘If a check delivered in payment of goods purchased be drawn fraudulently against a bank where the drawer has no funds, and has no reason to expect payment, such a check is not forgery, since it binds nobody but the drawer, and is precisely such as he made it and intended it to be; but if the holder fraudulently increase the amount payable after the check has been signed, that is forgery on his part, because the check is evidence and apparent authority for drawing an amount of money which the maker never authorized. In all these cases the distinction seems to me to turn upon the question whether the instrument has, or can be made to have, any legal force or effect, in itself considered, against any other person than him who makes the false statement or alteration. If it has, and is designed and calculated to deceive, it is forgery; otherwise not.’

In Minnesota v. Willson, 28 Minn. 52, 9 N. W. 28, defendant was convicted of uttering a false deed knowing the same to be false. The deed purported to be a deed of land by one James D. Hoitt to Joseph F. Miller, signed by H. H. Willson, per procuration of said Hoitt; the form of the signature being, ‘James D. Hoitt, by H. H. Willson, his attorney in fact.’ Defendant signed the deed, claiming the authority to do so under the power of attorney. It is said:

‘The real question, therefore, is whether an instrument, which appears on its face to have been executed by an agent authorized, while in truth he was not so, is a false instrument; or, to state the proposition in another form, when an instrument is really, in all its parts, written or signed by the individual by whom it purports to be written and signed, and the falsity consists, not in the simulation or counterfeiting of the act of another, but in the false assertion which the instrument contains that he, the writer and signer thereof, is authorized so to make and sign it in behalf of another, as it purports to be, is it a false instrument, within the meaning of the statute, and, upon negotiation of such instrument by the person who has so prepared it, is that person guilty of uttering a false instrument?

‘* * * The instrument, on its face, purports to be defendant's own act, but one which he was authorized to do for and in the name of Hoitt. The reader of the deed could not misunderstand it. By its terms, the defendant declares that he made the writing, but that he so made it for Hoitt and by authority from Hoitt. The falsity, if any, consists in the claim of authority from Hoitt. The law, as we have seen, is well settled that if a person sign an instrument with his own name per procuration of the party whom he intends or pretends to represent, it is no forgery, it is no false making of the instrument, but merely a false assumption of authority.’

In Barron v. State, 12 Ga. App. 342, 77 S. E. 214, defendant was indicted for forgery. He signed a draft, ‘W. R. Amason, W. H. B.’ The question was whether or not in signing Amason's name he was guilty of forgery. It is said:

‘In our view of the case the defendant may be guilty of cheating and swindling, or of obtaining money under false pretenses, but under the evidence in the record he can not be convicted of the offense of forgery. There is some conflict in the authorities upon this subject, but the sounder view seems to be that forgery can not be predicated of a writing which is not in itself false,-is not intended to be a semblance of something other than what it purports to be; and the mere fact that a paper is issued with fraudulent intent is not of itself sufficient to constitute the crime of forgery, if the paper purports to be executed by an agent, although, in truth and in fact, there may have been no agency at all. The reason is plain; for, in the latter case, the fraud, if perpetrated at all, is effected by inducing confidence in the validity of the agency alleged to exist, whereas in the case of real forgery the fraud is committed by inducing the belief that the paper was executed or signed by him who purported to have signed it, when in truth and in fact such was not the case. In forgery the false instrument must carry on its face the semblance of that for which it is counterfeited, although it is not necessary that the semblance be exact. * * * In our judgment, the true rule is stated in 5 Encyclopedia of Evidence, 860: ‘Evidence showing that the defendant did the acts for another, though the authority was falsely and fraudulently assumed, will not sustain a prosecution for forgery.’'

In Mann v. People (N. Y.) 15 Hun, 155, the prisoner was indicted for making a note for $10,000. It was signed by Henry A. Mann, treasurer. It purported to be drawn in pursuance of a resolution of the board of supervisors of Saratoga county. The court said its legal character was the same as if it had been signed, ‘County of Saratoga, by Henry A. Mann, Treasurer.’ It is said:

‘Assuming this to be correct, we first have to inquire whether the making of such an instrument would have been forgery at common law, or without...