Terry v. Puget Sound Nat. Bank, No. 42064

CourtUnited States State Supreme Court of Washington
Writing for the CourtPER CURIAM
Citation80 Wn.2d 157,492 P.2d 534
Parties, 10 UCC Rep.Serv. 173 Larry TERRY and Sam Daniels, Appellants, v. PUGET SOUND NATIONAL BANK, a national banking corporation, Respondent.
Docket NumberNo. 42064
Decision Date06 January 1972

Page 157

80 Wn.2d 157
492 P.2d 534, 10 UCC Rep.Serv. 173
Larry TERRY and Sam Daniels, Appellants,
v.
PUGET SOUND NATIONAL BANK, a national banking corporation, Respondent.
No. 42064.
Supreme Court of Washington, En Banc.
Jan. 6, 1972.

Page 158

Tanner & Burgess, Jack E. Tanner, Tacoma, for appellants.

Eisenhower, Carlson, Newlands, Reha, Elliott & Henriot, Ronald A. Roberts, Tacoma, for respondent.

PER CURIAM.

Plaintiffs, partners in a Tacoma barber shop, have maintained a partnership checking account with the defendant, Puget Sound National Bank, since October, 1964. The signatures of both partners were required for withdrawal from the account. Mr. Nash, a long time employee of plaintiffs, was occasionally left alone and in charge of the barber shop. He had no formal managerial responsibilities and no authority to write partnership checks. Between September 16, 1968, and January 3, 1969, Mr. Nash forged plaintiffs' signatures on numerous checks. Defendant bank honored these checks. In early January of 1969, plaintiffs discovered the forgeries. [492 P.2d 535] This action was then commenced to recover the monies paid.

The bank asserted plaintiffs' negligence as an affirmative defense under § 3--406 and § 4--406, Uniform Commercial Code, being RCW 62A.3--406 and RCW 62A.4--406. 1 On appeal from a jury verdict and judgment for defendant,

Page 159

plaintiffs contend that the affirmative defense should not have been submitted and that the bank should have been held liable as a matter of law.

The record shows that the check blanks were left in an unlocked drawer on the barbershop premises, easily accessible to Mr. Nash. Plaintiffs never inquired of one another about missing check blanks. For about 4 years, on a regular monthly basis, defendant sent statements and cancelled checks to plaintiffs' place of business. See RCW 62A.1--201(38). Plaintiffs regularly examined the cancelled checks and bank statements upon receipt. The monthly statements sent in October, November and December of 1968 were intercepted by Mr. Nash, and not received by plaintiffs. Plaintiffs did not inquire of the bank nor discuss between themselves this unusual absence of statements and cancelled checks. It was only when they received notice in late December that the account was overdrawn that they went to the bank and then discovered the forgeries.

These facts constitute substantial evidence of negligence

Page 160

on the part of the plaintiffs. Plaintiffs suggest that...

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17 practice notes
  • Fidelity & Cas. Co. of New York v. Constitution Nat. Bank
    • United States
    • Supreme Court of Connecticut
    • January 21, 1975
    ...Construction, Inc. v. First National Bank of Md., 271 Md. 154, 315 A.2d 69; Terry v. Puget Sound National Bank, 80 Wash.2d 157, 160, 492 P.2d 534; Exchange Bank & Trust Co. v. Kidwell Construction Co., 463 S.W.2d 465, 469 (Tex.Civ.App.). By 'reasonable care' in cases involving a question of......
  • Continental Cas. Co. v. Fifth/Third Bank, No. 3:03CV7217.
    • United States
    • U.S. District Court — Northern District of Ohio
    • March 3, 2006
    ...West Penn. Admin., Inc. v. Union Nat. Bank, 233 Pa.Super. 311, 335 A.2d 725, 738 (1975); Terry v. Puget Sound Nat'l Bank, 80 Wash.2d 157, 492 P.2d 534, 535-36 Additionally, the Supreme Court of Oregon stated that the § 3-406 defense can apply "to cases where the party had notice that forger......
  • Al Sarena Mines, Inc. v. SouthTrust Bank of Mobile
    • United States
    • Supreme Court of Alabama
    • June 16, 1989
    ...Equip. Corp. v. First Alabama Bank of Montgomery, N.A., 636 F.2d 1051 (5th Cir.1981); Terry v. Puget Sound National Bank, 80 Wash.2d 157, 492 P.2d 534 (1972); Transamerica Ins. Co. v. United States Nat'l Bank of Oregon, 276 Or. 945, 558 P.2d 328 (1976); Parsons Travel, Inc. v. Hoag, 18 Wash......
  • Brighton, Inc. v. Colonial First Nat. Bank
    • United States
    • New Jersey Superior Court – Appellate Division
    • October 15, 1980
    ...Nat'l Bank v. Kesterson, 257 Ark. 813, 520 S.W.2d 253, 16 U.C.C.Rep. 805 (Sup.Ct.1975); Terry v. Puget Sound Nat'l Bank, 80 Wash.2d 157, 492 P.2d 534, 535 (Sup.Ct.1972); Stauffer v. Oakwood Deposit Bank, 19 Ohio App.2d 68, 249 N.E.2d 848, 852 (Ct.App.1969); Gennone v. Peoples Nat'l Bank & T......
  • Request a trial to view additional results
17 cases
  • Fidelity & Cas. Co. of New York v. Constitution Nat. Bank
    • United States
    • Supreme Court of Connecticut
    • January 21, 1975
    ...Construction, Inc. v. First National Bank of Md., 271 Md. 154, 315 A.2d 69; Terry v. Puget Sound National Bank, 80 Wash.2d 157, 160, 492 P.2d 534; Exchange Bank & Trust Co. v. Kidwell Construction Co., 463 S.W.2d 465, 469 (Tex.Civ.App.). By 'reasonable care' in cases involving a question of......
  • Continental Cas. Co. v. Fifth/Third Bank, No. 3:03CV7217.
    • United States
    • U.S. District Court — Northern District of Ohio
    • March 3, 2006
    ...West Penn. Admin., Inc. v. Union Nat. Bank, 233 Pa.Super. 311, 335 A.2d 725, 738 (1975); Terry v. Puget Sound Nat'l Bank, 80 Wash.2d 157, 492 P.2d 534, 535-36 Additionally, the Supreme Court of Oregon stated that the § 3-406 defense can apply "to cases where the party had notice that forger......
  • Al Sarena Mines, Inc. v. SouthTrust Bank of Mobile
    • United States
    • Supreme Court of Alabama
    • June 16, 1989
    ...Equip. Corp. v. First Alabama Bank of Montgomery, N.A., 636 F.2d 1051 (5th Cir.1981); Terry v. Puget Sound National Bank, 80 Wash.2d 157, 492 P.2d 534 (1972); Transamerica Ins. Co. v. United States Nat'l Bank of Oregon, 276 Or. 945, 558 P.2d 328 (1976); Parsons Travel, Inc. v. Hoag, 18 Wash......
  • Brighton, Inc. v. Colonial First Nat. Bank
    • United States
    • New Jersey Superior Court – Appellate Division
    • October 15, 1980
    ...Nat'l Bank v. Kesterson, 257 Ark. 813, 520 S.W.2d 253, 16 U.C.C.Rep. 805 (Sup.Ct.1975); Terry v. Puget Sound Nat'l Bank, 80 Wash.2d 157, 492 P.2d 534, 535 (Sup.Ct.1972); Stauffer v. Oakwood Deposit Bank, 19 Ohio App.2d 68, 249 N.E.2d 848, 852 (Ct.App.1969); Gennone v. Peoples Nat'l Bank & T......
  • Request a trial to view additional results

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