Grand Lodge of the Ancient Order of United Workmen v. State Bank

Citations

• 92 Kan. 876
• 142 P. 974
• 1914 Kan. LEXIS 336

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Banks and Banking — Payment of Checks Payable to Order. The general rule is that in order to charge the account of a depositor a bank must pay a check only to the payee to whose order it is drawn, and payment made otherwise is at its peril unless it can claim protection upon some principle of estoppel or negligence chargeable to the depositor.</p> <p>2. Same — Forgery of Name of Payee by Agent of Depositor— Notice to Depositor. Where the claim of negligence of the depositor is based upon previous forgeries of his agent, who forged the endorsement of the payee upon which the check in question is paid, knowledge of the depositor or notice to him of the former misconduct or other fraudulent acts of the agent must be shown in order to charge the depositor with negligence in intrusting the check to the agent for delivery- to the payee.</p> <p>3. Same — False Reports and Forgeries by Financier of Local Lodge of A. O. U. W. The financier of a subordinate lodge of a beneficiary association at different times sent in to the grand lodge false reports of the death of members, and forged proofs of death, and by these means obtained possession of checks or orders on the depository of the grand lodge, drawn to the order of the beneficiary, and thereupon, by forging the indorsements of the payees, received and appropriated the proceeds. He continued, however,'to enter upon a ledger of his lodge the regular payment of dues and assessments by the members so reported dead. Afterwards by like forgeries he obtained payment of another cheek or order which had been sent to him by the grand lodge for delivery to the payee named in' it. In this action of the grand lodge against the depository to recover the amount so paid on the forged indorsement of the payee it is held that the grand lodge is not chargeable with notice of the former forgeries by the entries so made in the financier’s ledger, which were never reported to, and never came to the knowledge