Franklin Sav. Bank v. International Trust Co.

• Decision Date: 17 June 1913
• Citation: 102 N.E. 363,215 Mass. 231
• Parties: FRANKLIN SAVINGS BANK v. INTERNATIONAL TRUST CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

215 Mass. 231

102 N.E. 363

FRANKLIN SAVINGS BANK v. INTERNATIONAL TRUST CO.

Supreme Judicial Court of Massachusetts, Suffolk.

June 17, 1913

COUNSEL

Moorfield Storey and R. G. Dodge, both of Boston, for plaintiff.

Robt. M. Morse and W. M. Richardson, both of Boston, for defendant.

OPINION

HAMMOND J.

In view of the decisions of this court as to the powers conferred by law upon a town treasurer, this seems a simple case. The check was made payable to the town of Framingham and could be put into circulation only by the indorsement of the town acting by its agent duly authorized for that purpose. The only indorsement in the name of the town was made by Lombard the treasurer, in these words: 'Town of Framingham, by John B. Lombard, Treasurer.' But he as treasurer had no power to indorse the check for circulation. His only power was to indorse it for deposit for collection to the account of the town. The check was not received for deposit on account of the town, but on account of the American Banking Company, one of the defendant's depositors, to which on the same day the defendant gave a certified check for an amount which included very nearly the whole amount of the check in question.

The infirmity in the title of the American Banking Company to the check was thus apparent upon the check itself with the indorsement, when interpreted under the law, and the defendant must be held to have had knowledge of it. Having taken the check with such knowledge it is answerable to the plaintiff for the proceeds. The case is clearly distinquishable from Fillebrown v. Hayward, 190 Mass. 472, 77 N.E. 45, upon which the defendant places much reliance. The treasurer in that case was treasurer of a private corporation, not of a town. The distinction between the general powers of these two officers as to commercial paper has been frequently stated by this court, For cases illustrative of the law applicable to the present case, see Smith v. Cheshire, 13 Gray, 318; Lowell Five Cents Savings Bank v. Winchester, 8 Allen, 109; Abbott v. North Andover, 145 Mass. 484, 14 N.E. 754 and cases cited; Newburyport v. Fidelity Ins. Co., 197 Mass. 596, 84 N.E. 111. Seel, also, Holden v Phelps, 135 Mass. 61.

The principle also invoked by the defendant that where one of two innocent parties must suffer, the loss must rest where it falls, is for manifest reasons not applicable.

There was no prejudicial error in the admission of...