Indiana Plumbing Supply Co. v. Bank of America Nat. Trust & Sav. Ass'n

• Citation: 63 Cal.Rptr. 658,255 Cal.App.2d 910
• Court: California Court of Appeals Court of Appeals
• Decision Date: 15 November 1967
• Parties: INDIANA PLUMBING SUPPLY COMPANY, a California Corporation, Plaintiff and Respondent, v. BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, Defendant and Appellant. Civ. 31403.

Page 658

63 Cal.Rptr. 658

255 Cal.App.2d 910

INDIANA PLUMBING SUPPLY COMPANY, a California Corporation, Plaintiff and Respondent, v. BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, Defendant and Appellant.

Civ. 31403.

Court of Appeal, Second District, Division 1, California.

Nov. 15, 1967.

Rehearing Denied Dec. 11, 1967.

Hearing Denied Jan. 11, 1968.

Robert H. Fabian and James L. Williams, Jr., Los Angeles, for appellant.

Malter & Hersh, and Louis R. Hersh, Los Angeles, for respondent.

LILLIE, Associate Justice.

Plaintiff, Indiana Plumbing Supply Company, sued Bank of America for $6,060, alleging that for a valuable consideration three checks drawn on two other banks for $3,300, $1,380 and $1,380, respectively, to the order of plaintiff and J & J Plumbing, were delivered by the drawers to Joe Pinedo (J & J Plumbing) and presented by him to defendant Bank of America which paid the proceeds thereof to Pinedo upon the forged endorsements of plaintiff; and that defendant Bank of America collected the amounts of said checks from drawee banks and refused to pay the same to plaintiff. Thereafter defendant bank filed its answer denying on information and belief all allegations of the complaint. On July 12, 1966, plaintiff filed notice of motion for summary judgment attaching thereto declaration of Leon Kasoff, president of plaintiff Indiana Plumbing Supply Company, to which he attached photostatic copies of front and reverse sides of the three checks in question. Defendant Bank of America filed no opposing declaration. On July 26, 1966, motion for summary judgment was granted; judgment was entered accordingly.

Thereafter defendant bank filed notice of motion to vacate judgment and for rehearing on plaintiff's motion for summary judgment; it filed no declaration either in support of its motion to vacate or in opposition to plaintiff's motion for summary judgment. Opposing defendant's motion plaintiff filed declaration of Louis R. Hersh, its attorney, who alleged, among other things, that Mr. Williams, attorney for defendant Bank of America, told him on July 22, 1966, that he knew of no defense that the bank had and did not intend to file a counter affidavit, and, in fact, filed none. Supplemental declaration of Kasoff was filed in support of motion for summary judgment. On August 11, 1966, the trial judge in effect granted defendant's motion to vacate by hearing argument on the merits of plaintiff's motion, determined that there is no triable issue and granted motion for summary judgment. Judgment for plaintiff was entered August 19, 1966, from which defendant Bank of America appeals.

'A summary judgment is proper only if (1) the affidavits in support of the moving party are sufficient, strictly construed, to sustain a judgment in his favor and (2) the affidavits filed by the opponent, liberally construed, do not show facts deemed by the judge hearing the motion sufficient to present a triable issue. (Code Civ.Proc., § 437c; Stationers Corp. v. Dun & Bradstreet, Inc., 62 Cal.2d 412, 417--418(1--7), 42 Cal.Rptr. 449, 398 P.2d 785.)

'As pointed out in Stationers Corp. v. Dun & Bradstreet, Inc., supra, 62 Cal.2d 412, 417(3), 42 Cal.Rptr. 449, 398 P.2d 785, 'The aim of the procedure is to discover, through the media of affidavits, whether the parties possess evidence requiring the weighing procedures of a trial. " (Towne Development Co. v. Lee, 63 Cal.2d 147, 148, 45 Cal.Rptr. 316, 317, 403 P.2d 724, 725; see also, Wilson v. Bittick, 63 Cal.2d 30, 34--35, 45 Cal.Rptr. 31, 403 P.2d 159.)

While it is true, as urged by respondent, that on a motion for summary judgment the trial court must determine if defendant has presented any facts by counter declaration which give rise to a triable issue or defense and defendant herein chose to put none of the facts set up in the supporting declarations in issue, summary judgment for plaintiff cannot be ordered, even though declaration for defendant bank be absent, unless the supporting declarations comply with section 437c, Code of Civil Procedure, and cover all elements necessary to sustain a judgment in plaintiff's favor. (Family Service Agency of Santa Barbara v. Ames, 166 Cal.App.2d 344, 351, 333 P.2d 142.) Thus, our inquiry is to the sufficiency of the supporting declarations.

The exhibits (photostatic copies of front and reverse sides of the three checks in question) attached to Kasoff's original declaration establish without question that the checks, drawn on two different banks (First State Bank and United California Bank) made to the order of 'J & J Plumbing Co. and Indiana Pipe (plaintiff herein)' as joint payees, bear the endorsement of J & J Plumbing and the purported endorsement of plaintiff and Kasoff; that they were presented by J & J Plumbing to defendant Bank of America; and that on the endorsements defendant Bank of America paid out the proceeds of said checks to J & J Plumbing, thereafter collecting the money from drawee banks. Kasoff's declarations show that he is president of plaintiff, and affirmatively state 'That if sworn as a witness (he) could competently testify' to the facts thereinafter alleged. They demonstrate that declarant of his own knowledge could testify, as alleged, that the endorsements of plaintiff and Kasoff on the reverse of each check are forged, not genuine and not made by him or anyone else with his or plaintiff's authorization or consent; that no person or firm or Joe Pinedo (J & J Plumbing) had authority to endorse the name of plaintiff or Kasoff; that defendant Bank of America paid out the proceeds of all three checks to J & J Plumbing on endorsements effected by J & J Plumbing by endorsing its name and forging the name of plaintiff, the joint payee; that All of the money represented by the three checks was due and owing plaintiff by J & J Plumbing as the result of plumbing materials and supplies furnished by plaintiff to and purchased by Joe Pinedo, owner of J & J Plumbing; and that plaintiff has received none of the money represented by the three checks from any source.

There is no merit to appellant's attack on the sufficiency of the supporting declarations. Moreover, none of the facts set out therein has been controverted or put in issue by defendant bank, and at neither hearing before the trial court did defendant Bank of America present any kind of defense; in fact, through its counsel defendant bank advised plaintiff's counsel that it intended to file no counter declaration because it knew of no defense. Further, defense counsel told the trial judge that he did not wish to file a response, which prompted the judge to remark, 'If the defendant has any other facts, it has deliberately chosen not to produce them.' Thus, the undisputed facts are that defendant Bank of America collected from drawee banks (First State Bank and United California Bank) on three checks received by it from one joint payee, J & J Plumbing, to which the same were delivered by the makers, upon which it paid out the proceeds to J & J Plumbing on endorsements effected by J & J Plumbing endorsing its own name and forging the endorsements of plaintiff, the other joint payee. The question then is one of law--is a collecting bank which has paid a check made payable to joint payees bearing an endorsement effected by one joint payee signing his own name and forging that of his joint payee liable to the joint payee whose endorsement was forged?

Authorities support recovery by a payee against a collecting bank where a single payee's endorsement has been forged--on the theory of conversion or quasi contractual liability. 'It has long been the rule in this state that a collecting bank, which has collected from the drawee on a check upon which the payee's endorsement was forged, is liable to the payee. (George v. Security Trust & Savings Bank, 91 Cal.App. 708, 267 P. 560; Walsh v. American Trust Co., 7 Cal.App.2d 654, 47 P.2d 323; Jones v. Bank of America, supra, 49 Cal.App.2d 115, 121--122, 121 P.2d 94.) The same rule has been adopted in a majority of the states of the Union. (See Notes, 31 A.L.R. 1068; 67 A.L.R. 1535.)' (Morgan v. Morgan, 220 Cal.App.2d 665, 677, 34 Cal.Rptr. 82, 88.)

This court in a recent decision has extended the above rule to a joint payee in a case almost identical on its facts to the instant one. (White Lumber Co. v. Crocker-Citizens National Bank, 253 Cal.App.2d ---) ^a, 61 Cal.Rptr. 381. The appeal was by plaintiff from a judgment of dismissal entered on order sustaining defendant's demurrer. The following was alleged in the first amended complaint. Plaintiff, a lumber materialman, sold lumber products to Timberline, a roofing company, for use on a construction project owned and constructed by Air-Tare. To insure that the subcontractor Timberline would pay plaintiff for the materials furnished by plaintiff to Timberline, Air-Tare drew four checks on the First West Bank and Trust Company, each made payable to the order of Timberline and plaintiff, and delivered said checks to the joint payee Timberline. Timberline endorsed its name and then forged plaintiff's endorsement on each check and presented them to and received payment thereon from defendant Crocker-Citizens National Bank, the collecting bank. In the instant case the checks were dated July 14 and August 20, 1965, and made payable to both payees (plaintiff And J & J Plumbing); in White Lumber Co. one of the checks was issued after ...