Indiana Bank & Trust Co. v. Lincoln Nat. Bank & Trust Co. of Fort Wayne

Decision Date11 May 1965
Docket NumberNo. 19973,No. 1,19973,1
Citation137 Ind.App. 546,206 N.E.2d 879
CourtIndiana Appellate Court

[137 INDAPP 547]

Shoaff, Keegan & Baird, Howard L. Chapman, Fort Wayne, for appellant.

Barrett, Barrett & McNagny, J. A. Bruggeman, Fort Wayne, for appellee.

MARTIN, Judge.

The appellant brought this action against appellee to recover amounts paid to appellee upon certain checks bearing the forged endorsement of the respective payees.

The trial court found that appellant should take nothing on its amended complaint and entered judgment in favor of the appellee. The appellant's motion for a new trial assigned that the decision was contrary to law. Said motion for a new trial was overruled by the trial court. The appellant's assignment of error was that the court erred in overruling appellant's motion for a new trial. The appellee in this case has raised certain questions in its answer brief attacking appellant's brief on technical grounds.

The appellee applied for and received an extension of time for filing its brief. Rule 2-16 of the Supreme Court requires the petition to 'state facts showing that the Court in which the cause is pending has jurisdiction and that the brief will be on the merits.' An objection that the evidence is not in the [137 INDAPP 548] record does not go to the merits of the appeal, and by the appellee's petition for extension of time the alleged error was waived. Gamble v. Lewis (1949) 227 Ind. 455, 459, 85 N.E.2d 629; Indiana Dept. of State Rev. v. Mertz (1949) 119 Ind.App. 601, 88 N.E.2d 917; Brodt v. Duthie (1933) 97 Ind.App. 692, 186 N.E. 893.

The numerous questions presented by the appellee's answer brief pertaining to defects in the appellant's brief have been waived and hence cannot be considered, due to the appellee's filing of a petition for an extension of time to file its brief. Indiana Dept. of State Rev. v. Mertz, supra, page 604 of 119 Ind.App., 88 N.E.2d 917.

We are able to determine from the briefs the questions which the appellant seeks to present.

The following facts are hereby stipulated by agreement between the parties in the above matter as follows:

'1. That at all times relevant herein the Plaintiff has been a domestic banking corporation pursuant to the laws of the State of Indiana.

'2. At all times relevant herein Defendant has been a national banking corporation pursuant to the laws of the United States of America and doing business in Fort Wayne, Indiana.

'3. That at all times relevant herein W. A. Sheets & Sons, Inc., maintained a checking account with the Plaintiff.

'4. That at various times beginning with March 25, 1958, and ending with March 15, 1960, the said W. A. Sheets & Sons, Inc., prepared and executed certain checks on its account with Plaintiff, a list of such checks showing the named payee, the check number, the date of each check, the date cashed, and the amount of each check, being attached hereto as 'Schedule A' and incorporated herein by reference. That all of said checks were executed on behalf of W. A. Sheets & Sons, Inc., by Ralph H. Sheets, with the exception of check number [137 INDAPP 549] 3238, which was executed by Gale H. Foulk, and that the persons who executed said checks would testify they were not aware, at the date of said execution, of any intended fraud in connection with said checks. That Luke F. Gallimore obtained possession of each of said checks and endorsed the name of the payee on the back thereof, but without the consent, knowledge, or authority of the named payee, if any actually existed. That said Luke F. Gallimore thereafter took said checks on various dates to the Defendant-Bank and cashed the same and appropriated all of the funds received to his own use and benefit. Witnesses would testify that the said actions of Luke F. Gallimore were fraudulent and unknown to W. A. Sheets & Sons, Inc. at the time thereof. That said checks are herewith offered into evidence by Plaintiff collectively as Plaintiff's Exhibit 'I', and without objection of Defendant.

'5. That Defendant endorsed the above described checks with the following words: 'Prior endorsements guaranteed.' That Defendant then presented each check to Plaintiff for payment through normal banking channels and that Plaintiff paid Defendant the full face amount of each such check. Witnesses from Plaintiff would testify that at the time of payment the Plaintiff had no notice or knowledge of any defect or irregularity in connection with said checks.

'6. That as each check was presented to Plaintiff by Defendant, Plaintiff paid such checks and charged the face amount thereof against the depositor, W. A. Sheets & Sons, Inc. That subsequently, and after the last of said checks had been presented to Plaintiff and paid, Plaintiff learned of those matters set out in numbered paragraph 4 hereof. That thereafter W. A. Sheets & Sons, Inc. demanded that Plaintiff credit the account of W. A. Sheets & Sons, Inc. with the amounts of such checks and that Plaintiff did so credit the account of said W. A. Sheets & Sons, Inc.

'7. That Plaintiff has made demand on Defendant for payment of such checks but that Defendant has refused and continues to refuse to pay same.

'8. Defendant offers into evidence its Exhibit A [137 INDAPP 550] being a letter to Indiana Bank dated 6/1/60. Plaintiff offers into evidence its Exhibit B being a letter to Indiana Bank dated 11/24/61. Both letters accepted into evidence.

'9. Defendant offers Exhibit B being a list of checks (photostatic) cashed by Luke Gallimore, including checks other than those on which Plaintiff sues herein. Plaintiff objects to admission on ground of immateriality as to those checks not sued on in this case. If overruled, checks may be admitted.

'10. The order of submission of checks after cashing is as follows:

'(a) Checks cashed at Lincoln

'(b) Lincoln forwards to Indiana

'(c) Indiana charges Sheets account

'(d) Sheets advised Indiana

'(e) Indiana credits Sheets account

'(f) Indiana made demand on Lincoln.

'Dated this 30th day of January, 1962.


Attorneys for Plaintiff

By S/ Howard L. Chapman


Attorneys for Defendant

By S/ Wm. F. McNAGY.'

The evidence shows there were twenty-eight (28) forged checks in the total sum of $2996.70. The first forged check was dated April 8, 1958 and cashed on April 14, 1958. The rest of the clecks were passed between that date and the date of the last check, which was dated February 23, 1960 and cashed February 26, 1960. Thus, all of said forged checks were passed within a period of one year and ten months.

Also stipulated into evidence were copies of two (2) letters as follows:

[137 INDAPP 551] 'June 1, 1960

'Indiana Bank and Trust Company of Fort Wayne

131 East Wayne Street

Fort Wayne, Indiana

'Attention: Mr. Richard T. Doermer

'In re: Embezzlement Loss of W. A. Sheets & Sons, Inc.

'Dear Mr. Doermer:

'I have prepared an Affidavit which has been signed by Ralph H. Sheets and concerns the checks which were signed by him to various payees, and which bear forged endorsements. I am enclosing herewith the original of this Affidavit which has been signed and notarized, and have attached copies of all such checks to it. I am sending a copy of the Affidavit, together with a copy of this letter, to Tom Logan for his file.

'We request that the account of W. A. Sheets & Sons, Inc., be credited with the amount of such checks, $4051.65, and assume that your bank will be able to recover over against the cashing banks for each of the various checks on the basis of the guarantee of endorsement on each of them. It is our understanding that the credit to the account of the Company will be conditional upon recovery by you from the other banks, except, of course, as to the checks which were cashed at your bank. In the event that you are unable to obtain a credit from these other banks in the amounts of checks cashed by them within a reasonable time you may cancel the credit to the account of the Company; provided, however, that in this event any right which the Company may have shall not be prejudiced. Neither your bank nor the Company shall be presumed to have made any admission concerning liability in this matter. You agree to notify us as soon as the credit becomes permanent.

'If this procedure meets with your approval may I please hear from you in the near future. Thank you very much for your cooperation thus far.

'Yours truly,


'Howard L. Chapman

[137 INDAPP 552] 'HIC:SC


CC Mr. Thos. D. Logan

17th Floor Lincoln Bank Tower

Fort Wayne, Indiana

'Mr. Ralph H. Sheets

W. A. Sheets & Sons, Inc.

1052 Osage

Fort Wayne, Indiana'


'November 24, 1961

'Mr. Richard T. Doermer, President

Indiana Bank and Trust Company

Indiana Bank Building

Fort Wayne, Indiana

'In re: Indiana Bank v. Lincoln Bank (W. A. Sheets Check Problem)

'Dear Dick:

'You will recall our conversations concerning this case and the fact that we had originally thought it might be wise to have the Indiana Bank make its credit to W. A. Sheets conditional on the success of the above lawsuit. It is my understanding, however, that this agreement was never reached, and that, instead, the credit was given by your Bank to W. A. Sheets & Sons, Inc., without any strings, which is the current status. This being the case, of course, the Lincoln Bank Will [will] be unable to succeed in its claim that W. A. Sheets & Sons is the real party in interest in this case, and the law clearly gives the Indiana Bank the right to recover in its own name for the forged checks on which it paid the Lincoln Bank.

'This case goes to trial February 2, 1962, and the purpose of this letter is that I have not had anything concrete in my file to show this understanding, and accordingly, would like you to sign the copy of...

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