Corn Exchange National Bank v. National Bank of the Republic , 78 Pa. 233 ( 1875 )

Mr. Justice Paxson

delivered the opinion of the court, May 10th 1875.

An effort has been made to distinguish this case from that of the Tradesmen’s Bank v. Third National Bank, 16 P. F. Smith 435, but we think without success. The remark of the late Chief Justice Read in the concluding paragraph of his opinion in that case has no application to the present one. There, it was alleged that the defendants were not liable because they were merely agents for another bank. The court said if the fact were so it made no difference, as the money had not been paid over by the bank to its principal. There is no allegation here that the defendants are the agents of another bank. They became the owners of the forged check; passed it upon the plaintiffs, and received value therefor. Whether the defendants gave cash or a credit for the check when they received it, does not concern the plaintiffs. Their right to recover back the money they paid does not depend upon the right or the ability of the defendants to recover from the person who forged the check, and passed it upon them. The Act of 1849 was not merely declaratory of the law as it then stood. It gives a clear right to the holder of forged paper to recover the money paid by him to a previous holder. Upon this right the act imposes no qualification.

It was contended, however, upon the trial in the court below, that the plaintiffs were not protected by the Act of 1849, because they had been guilty of negligence. It is not necessary for us to express an opinion as to how far negligence is a defence under this act, for the reason that there was not sufficient evidence upon this point to justify the learned judge of the District Court in submitting it to the jury. There must be something more than a scintilla of evidence to entitle it to go to the jury. Howard Express Company v. Wile, 14 P. F. Smith 201. In this case the forged check was received by the plaintiffs through the Clearing House on Monday, the 3d day of June, and the next day the defendants were notified of the forgery. It is said the plaintiffs should have discovered the forgery earlier; in fact should have detected it when the check was first received through their exchanges; that it was of a different color from the checks usually drawn by the firm, and the signature was not a close imitation. If Levy v. U. S. Bank, 1 Binn. 27, were still the law, there would have been more force in the latter suggestion. In that case it was held that the bank was bound to know the signature of its depositors, and having received a forged check on deposit and entered it as cash in the holder’s bank book was not entitled to recover it back. A case could hardly arise of the payment of money upon a forged check in which a plausible charge of negligence could not be made. To hold that a failure to detect the forgery when such a check was presented for payment, amounts to such negligence as would prevent a recovery under the Act of 1849, would he to fritter away the act, and render it practically useless. The fact that the check was of a different color from those usually drawn by the firm, and was not perforated, .if evidence at all of negligence, was so unimportant as not to jnstify the submission of the question to the jury.

There was also error in admitting the rules of the Clearing House in evidence. They did not apply to forged checks, and may have misled the jury.

Judgment reversed and a venire facias de novo awarded.