Kenneth Inv. Co. v. National Bank

• Decision Date: 15 December 1903
• Citation: 77 S.W. 1002,103 Mo. App. 613
• Parties: KENNETH INV. CO. v. NATIONAL BANK OF THE REPUBLIC OF ST. LOUIS.
• Court: Missouri Court of Appeals

77 S.W. 1002

103 Mo. App. 613

KENNETH INV. CO. v. NATIONAL BANK OF THE REPUBLIC OF ST. LOUIS.

Court of Appeals at St. Louis, Missouri.

December 15, 1903.

BANKS — FORGED CHECKS — PAYMENT — NEGLIGENCE — EVIDENCE — EXAMINATION OF PASSBOOK — FORGERIES BY BOOKKEEPER.

1. To prove negligence in paying checks purporting to be drawn by plaintiff against his account with defendant bank, it is competent to show that a check merely stamped with plaintiff's name, but not signed by any one, was paid, though the money drawn by it was not converted by the forger, but used by plaintiff.

2. Ten days cannot be arbitrarily fixed as sufficient time, under all circumstances, for a bank depositor to examine his passbook, after it has been balanced and returned to him with canceled vouchers.

3. A bank depositor is not bound by the examination of its passbook, nor to be treated as though it had made none, where its clerk to whom it intrusts such duty had forged checks, which had been paid, if ordinary care was used in selecting the clerk.

Appeal from St. Louis Circuit Court; Daniel G. Taylor, Judge.

Action by the Kenneth Investment Company against the National Bank of the Republic of St. Louis. Judgment for plaintiff. Defendant appeals. Affirmed.

Alfred T. Hebard, for appellant. Edward T. Parish, for respondent.

BLAND, P. J.

This is the second appeal of this case. The opinion on the former appeal will be found in 96 Mo. App. 125, 70 S. W. 173, to which we refer for a statement of the controlling facts in the case. The issues on the retrial were submitted to the court without the intervention of a jury. The finding and judgment of the court were for the plaintiff. Defendant appealed. On the second trial the date and other particulars of all the checks forged by Chatard and paid by the defendant bank were brought out, and additional evidence was heard as to the character of the forgeries, and the degree of diligence exercised by defendant's paying teller to detect the forgeries at the time the checks were paid by him.

The plaintiff, for the purpose of proving negligence on the part of the teller, offered and read in evidence, over the objection of the defendant, a check for $50 that was stamped with plaintiff's name with a rubber stamp, but was not signed by Davis or any other person. It is admitted that the money drawn by this check was not converted by Chatard, the forger, but was used by plaintiff in its business. For the reason that the money drawn on this check was properly applied, it is contended by defendant that it was inadmissible to show negligence in the payment of the forged checks. We do not think the check was competent to show negligence generally on the part of the paying teller, but was competent as tending to prove negligence in paying checks purporting to be drawn by the plaintiff against its account with the defendant bank.

The court declared the law to be that what is a reasonable time in which a depositor in a bank should examine his passbook, after it had been balanced and returned to him with the canceled vouchers, is a question of law, but refused to declare, as a matter of law, that 10 days was a reasonable time in which to make such examination. We do not think 10 days should be arbitrarily fixed as the time for making the examination in every case, but that it is a reasonable time in which to make the examination when the depositor and bank reside in the same town or city, and so held when the case was here before, and also in the case of McKeen v. Bank, 74 Mo. App. 281.

The defendant moved the court to declare the law to be, in effect, that while the plaintiff was not bound by any of the examinations of the passbook made by Chatard, if at the time of such examinations it contained any of his forged checks, yet it was in no better position than if it had made no examination whatever, and for that reason could not recover, but the court refused to so declare. In Wachsman v. Columbia Bank, 8 Misc. Rep. 280, 28 N. Y. Supp. 711, it is held that the depositor exercised ordinary care by intrusting the duty of examining the passbook and vouchers to the usual agent (the bookkeeper) in the ordinary course of business, although he (the bookkeeper) was a forger, and that the depositor was not estopped to assert the forgeries by mere delay in discovering them; that the delay did not make the account a stated or conclusive one, and only cast upon him the burden of impeaching it for mistake, and proving the checks were forged. In Weisser's Adm'rs v. Denison, 10 N. Y. 68, 61 Am. Dec. 731, checks forged by the confidential clerk of the depositor were paid by the bank, and charged to the depositor in his passbook, with the forged checks and others, and returned to the depositor; and the clerk, at the request of the principal, examined the book and reported it correct, and the principal did not discover the forgeries until several months afterwards, when he immediately notified the bank. In an action to recover the balance, it was held the bank could not retain the amount of the forged checks; that to deny a recovery would be, by a legal fiction, to charge the depositor with the tortious and even criminal acts of the servant. In Frank v....