First National Bank v. Fidelity Title & Trust Co.

Citations

• 251 Pa. 529
• 97 A. 75
• 1916 Pa. LEXIS 499

Syllabus

<p>Negotiable instruments — Promissory notes — Defenses—Insanity of endorser — Court and fury.</p> <p>1. The endorsement of a promissory note by an insane person renders bis estate liable therefor to the extent of the benefits received by him, and it is not material whether the endorsements were made for his individual indebtedness or as an accommodation.</p> <p>2. A depositor in a national bank gave a member of a brokerage firm, another member of which was the president of the bank, a general power of attorney for the transaction of his business. Thereafter he made promissory notes to his own order to the amount of $25,000.00 which he also endorsed which were presented for discount to the bank by the president and the proceeds were placed to the credit of the endorser. Subsequently the attorney in fact for the endorser cheeked out the funds and loaned them to the brokerage firm. In an action on the notes by the bank against the estate of the endorser, the defense was that he was mentally deficient at the time when he endorsed the notes and that the knowledge of the president of the bank as to the intended use of the funds was imputable to the bank and barred its recovery. The lower court submitted the case to the jury, which found a verdict for plaintiff, upon which judgment was entered. Held, (1) that the knowledge of the president was not imputable to the bank, (2) that if the defendant’s decedent was Sane when he endorsed the notes, defendant was liable thereon, though the notes were given for the accommodation of the brokerage firm, and if he was insane at the time when he executed the notes, defendant was liable in view of the uncontradicted evidence that the entire proceeds of the notes were credited to his account.</p>