Tradesmen's Bank v. Third National Bank
| Decision Date | 03 January 1871 |
| Parties | Tradesmen's National Bank <I>versus</I> The Third National Bank. |
| Court | Pennsylvania Supreme Court |
Before THOMPSON, C. J., READ, AGNEW, SHARSWOOD and WILLIAMS, JJ.
Error to the Court of Common Pleas of Allegheny county: No. 196, to October and November Term 1870.
Kerr & Patterson, for plaintiffs in error.—The paper was a check, payable on demand: Act of May 21st 1857, § 1, Pamph. L. 629; Purd. 111, pl. 7; Byles on Bills, by Sharswood, 84 note. The entry of a forged check to the credit of the holder, in his bank-book, imposes the loss on the bank: Levy v. Bank of U. S., 4 Dallas 234; S. C., 1 Binn. 27; Price v. Neal, 3 Burrows 1354; Byles on Bills, 491. The Act of April 5th 1849, § 10, Pamph. L. 426, Purd. 111, pl. 5, does not change the law as to diligence: Rick v. Kelly, 6 Casey 527; Ellis v. O. S. Ins. & Trust Co., 4 Ohio St. R. 628.
J. M. Kennedy and M. W. Acheson, for defendants in error, referred to Act of 1849; Rick v. Kelly, supra; 1 Bouvier's Law Dict. 588; 2 Parsons on Notes and Bills 436; Story on Agency § 800.
The opinion of the court was delivered, January 3d 1871, by READ, J.
The drawee of a bill is held bound to know the handwriting of his correspondent, the drawer; and if he accepts or pays a bill in the hands of a bonâ fide holder, for value, he is concluded by the act, although the bill turns out to be a forgery. If he has accepted, he must pay; and if he has paid, he cannot recover the money back. This was the law of Pennsylvania as settled by the case of Levy v. The Bank of the United States, 1 Binn. 27. This rule was altered by the 10th section of the Act of the 5th April 1849, Pamph. L. 426, which enacts: "That wherever any value or amount shall be received as a consideration, in the sale, assignment, transfer or negotiation, or in payment of any bill of exchange, draft, check, order, promissory note or other instrument negotiable within this Commonwealth by the holder thereof from the endorsee or endorsees, or payer or payers of the same, and the signature or signatures of any person or persons represented to be parties thereto, whether as drawer, acceptor or endorser, shall have been forged thereon, and such value or amount by reason thereof erroneously given or paid, such endorsee or endorsees, as well as such payer or payers respectively, shall be legally entitled to recover back from the person or persons previously holding or negotiating the same the value or amount, so as aforesaid given or paid by such endorsee or endorsees, or payer or payers respectively, to such person or persons, together with lawful interest thereon from the time that demand shall have been made for repayment of the same."
This act, it will be seen, directly reverses in effect the case of Levy v. The Bank, and the drawee may recover back money paid on a forged name of the drawer.
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