Indemnity Ins. Co. v. FIRST NAT. BANK AT WINTER PARK, FLA.

• Citation: 351 F.2d 519
• Decision Date: 21 September 1965
• Docket Number: No. 21171.,21171.
• Parties: INDEMNITY INSURANCE COMPANY OF NORTH AMERICA, Appellant, v. The FIRST NATIONAL BANK AT WINTER PARK, FLORIDA et al., Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

351 F.2d 519 (1965)

INDEMNITY INSURANCE COMPANY OF NORTH AMERICA, Appellant, v. The FIRST NATIONAL BANK AT WINTER PARK, FLORIDA et al., Appellees.

No. 21171.

United States Court of Appeals Fifth Circuit.

September 21, 1965.

Monroe E. McDonald, Orlando, Fla., Sanders, McEwan, Schwarz & Mims, Orlando, Fla., for appellant.

J. R. Wells, Donald T. Senterfitt, of Akerman, Senterfitt, Eidson, Mesmer & Robinson, Robert Dyer, Orlando, Fla., for appellees.

Before JONES and GEWIN, Circuit Judges, and ESTES, District Judge.

JONES, Circuit Judge.

A man who introduced himself as R. L. Mitchell opened a checking account with The First National Bank at Winter Park, Florida, in January 1962, with an initial deposit of $500 in currency.

On February 6, 1962, there came into The Sanford Atlantic National Bank, of Sanford, Florida, a messenger whose identity was then undisclosed but who was later ascertained to be Aaron Sipes, with an envelope directed to the exchange teller of the bank. In the envelope was a check drawn on the bank bearing the purported signature of H. E. Tooke, Jr., a customer of the bank, in the amount of $25,000. The envelope also contained a letter requesting that the check be exchanged for five cashier's checks, to be delivered "to bearer," and payable as follows:

                  John A. Eick
                    Sanford, Florida         $6,132.44
                  Albert N. Fitts
                    Sanford, Florida          6,132.44
                  Robert Mitchell
                    Winter Park, Florida      3,867.56
                  Lewis Mitchell
                    Winter Park, Florida      3,867.56
                  R. T. Overstreet
                    Orlando, Florida          5,000.00
                

There were persons named John A. Eick, Albert N. Fitts and R. T. Overstreet who were, and were known by the officers of the bank to be persons of substance and prominence in the places designated as their residences. The messenger, in response to a question from the teller, said he had been sent to the bank, not by Mr. Tooke but by "Dr. Wilkins, down at the hospital."

The exchange teller of Sanford Atlantic took the check to the cashier, R. W. Dean, and he in turn conferred with the executive vice president. No comparison was made of the purported signature on the check with the Tooke signature card or with any other known signature of his. Although the final "e" of the Tooke name was omitted from the check signature, the two officers agreed that the Tooke signature was genuine. However, the cashier apparently had some suspicion and thought he had better telephone Tooke. He called Tooke's home and was informed that Tooke was away until late in the afternoon. The cashier's checks were issued, taken by the messenger, and delivered to the person who had represented himself to be Dr. Wilkins. The check which had been signed in the name of Tooke was charged to his account. A week passed before Sanford Atlantic learned that it had paid a forgery. Dean assumed that the cashier's checks with Eick, Fitts and Overstreet as the named payees were intended for the persons of those names who were known to him but he readily admitted that he would have issued these checks in names without significance to him as was done in the case of the two checks issued in the Mitchell names.

A few days after opening his account in the Winter Park Bank, Mitchell, so called, who may or may not have been the same person as the "Dr. Wilkins at the hospital," presented the cashier's checks made in the names of Eick, Fitts, Overstreet and Lewis Mitchell, all bearing purported endorsements of the payees as named, at the Winter Park bank. An endorsement in the name of R. L. Mitchell was also on each of the checks.

The Winter Park bank gave Mitchell cash and its cashier's checks for the Sanford Atlantic cashier's checks. Winter Park's cashier's checks were subsequently cleared through other banks and were paid by it. The Sanford Atlantic cashier's check made payable to Robert Mitchell was cashed at the Daytona Beach Atlantic National Bank and honored by Sanford Atlantic. This check is not a part of the subject matter of this controversy. When the other four cashier's checks were presented to Sanford Atlantic it refused payment upon the ground of "First Indorsement Forged."

The Indemnity Insurance Company, a Pennsylvania Corporation, the appellant here and the plaintiff in the district court, brought an action against the Winter Park and Sanford Atlantic banks, both having their principal places of business in Florida, under the Federal Declaratory Judgments Act,¹ and Rule 57, Fed.Rules Civ.Proc., 28 U.S.C.A. Jurisdiction was based on diversity of citizenship. The complaint alleged that Indemnity had issued to the Winter Park bank a bankers blanket bond with a clause² providing insurance against losses by forgery. In its complaint, where the facts as herein recited were pleaded, Indemnity alleged that the Winter Park bank had made an informal claim for indemnity as to the four cashier's checks which it had cashed. It was said in the complaint that Indemnity took the position that its insured had not sustained "a loss compensable under the policy as yet because Sanford could not lawfully refuse to honor its own cashier's checks held in due course by" the Winter Park bank, there being no "forgery," and if there were forgeries, Sanford Atlantic was precluded by its negligence "from asserting such defense." It was then stated that the Winter Park bank took the position that it had sustained a loss,...