Pratt v. Union National Bank

• Citation: 79 N.J.L. 117,75 A. 313
• Decision Date: 23 December 1909
• Court: New Jersey Supreme Court
• Parties: JOHN PRATT, PLAINTIFF AND APPELLEE, v. UNION NATIONAL BANK, DEFENDANT AND APPELLANT

75 A. 313

79 N.J.L. 117

PRATT

v. UNION NAT. BANK.

Supreme Court of New Jersey.

Dec. 21, 1909.

Appeal from District Court of Atlantic City-Action by John Pratt against the Union.

National Bank.Judgment for plaintiff, and defendant appealed.Affirmed.

Argued June term, 1909, before SWAYZE,

TRENCHARD, and MINTURN, JJ.

T. W. Schimpf, for appellant.

Eli H. Chandler, for appellee.

TRENCHARD, J. John Pratt, the plaintiff below, was a depositor in the Union National Bank of Atlantic City.On August 9, 1906, he issued a check on that bank for $120.77 to the order of George W. Nock, and mailed it to Nock in Philadelphia in part payment of an open account.The check was received at Nock's place of business, and his indorsement forged thereon by some person in his office.It was negotiated through several hands, and was finally presented to the Union National Bank and paid by it September 11, 1906.On November 7, 1906, the bank returned the canceled check to Pratt with his balanced passbook.It appears by the testimony that "early in the spring of 1908, it might have been later," Nock notified Pratt by letter of the forgery, and afterwards, on May 23, 1908, he obtained the check from Pratt, giving him a receipt for it, and presented it to the bank, demanding payment, which was refused, the bank disclaiming any liability.On October 24, 1908, this suit was brought in the Atlantic City District Court, and the judge, sitting without a jury, rendered a judgment for the plaintiff.The defendant appeals.At the outset, we remark that it may well be that the record before us presents no legal questions.There seems to have been no request to find and no objection to the actual finding.But, considering the questions argued, we think the judgment is right.

First, it is said that there can be no recovery, because no notice was given to the bank of the forgery within one year after the return to the depositor of the voucher.It is true that the act of April 13, 1908(P. L.p. 428), provides that "no bank shall be liable to a depositor for the payment by it of a forged or raised check, unless within one year after the return to the depositor of the voucher of such payment such depositor shall notify the bank that the check so paid was forged or raised."It is also true that the act provides that it shall take effect immediately.The important question is whether the act has any application to the case at bar.That depends upon whether it is intended to be retrospective, or prospective only.We think it is prospective only.It is a rule of construction that all statutes are to be considered prospective, unless the language is express to the contrary, or there is a necessary implication to that effect.Harvey v. Tyler, 2 Wall. 347, 17 L. Ed. 871;U. S. v. Heth, 3 branch, 413, 2 L. Ed. 479;Washung v. Hunt, 47 N. J. Law, 256, affirmedHunt v. Washung, 48 N. J. Law, 613, 9 Atl. 199.The statute in question contains no express language indicating that it is to have a retroactive effect, nor is there any such necessary implication.The action in question accrued before the statute was enacted.To give it effect in this case would deprive the plaintiff of his existing remedy, for he did not discover the forgery until after the time limited by the statute had elapsed.It will be presumed that such was not the intent of the Legislature.To avoid such a result we should give the statute a prospective operation.We are of the opinion, therefore, that it does not affect this suit.

Secondly, it is contended that the judgment should be reversed "because the evidence shows that no demand was ever made by the plaintiff or any one in his behalf upon the defendant for the payment of the check."But it is to be observed that the subject-matter of the action is not the forged check, but the money of the plaintiff deposited in the bank.A deposit being a loan payable on demand, the depositor may not as a general rule maintain an action to recover his deposit until he has first made a demand for its payment.But where, as in this case, he has drawn upon the account by check which has been paid to some one other than the payee, by reason of the forgery of the latter's indorsement, a demand for the payment of the canceled forged check is not a condition precedent to the depositor's suit for his deposit.

The question which the defendant probably intended to raise, and has argued, was whether the action for the deposit could be maintained in the absence of a demand for its payment.We have pointed out that as a general rule demand must be made.The reason for the rule is that, when banks are ready and willing to pay on demand, they shall not be annoyed by suit.The implied contract is that the banks shall keep a deposit until called for, and until the bank refuses to pay on demand, they are not in default.Titus & Scudder v. Mechanics' Nat. Bank, 35 N. J. Law, 588.But where the bank has disclaimed liability, or where for any other reason the demand would manifestly be futile, none need be made.Titus & Scudder v. Mechanics' Nat. Bank, 35 N. J. Law, 588; Sutcliffe v. McDowell, 2 Nott & McC.(S. C.) 251; Lilley v. Miller, 2 Nott & McC.(S. C.) 257; Farmers', etc., Bank v. Planters' Bank, 10 Gill & J.(Md.) 422;Miller v. Western National Bank, 172 Pa. 107, 33 Atl. 684;State Bank v. Benoist, 10 Mo. 520.In the present case the bank repeatedly denied its obligation with respect to the moneys represented by the returned check.To make another demand by check or otherwise would have been an absurd and useless form.

Thirdly, it is urged that the plaintiff is precluded from recovery by an account stated between the parties.The argument is that the plaintiff was put in possession of his balanced passbook and vouchers by the bank on November 7, 1906, and his silence with respect to the forged indorsement on the check converted it into an account stated, by reason of the plaintiff...