Second National Bank v. Guarantee Trust & Safe Deposit Co.

Citations

• 206 Pa. 616
• 56 A. 72
• 1903 Pa. LEXIS 772

Syllabus

<p>Banks and banking — Checks—Forgery—Indorsement.</p> <p>One who has paid a check to one holding under a forged indorsement may recover back the amount if he proceeds with due diligence.</p> <p>A beneficial association drew a check on a bank payable to the order of a brother of a beneficiary. The brother’s name was forged upon the back of the check. The forged indorsement was followed by another indorsement, and the last indorsement, that of a trust company, expressly guaranteed the previous indorsements. The check was drawn upon a bank which was the depository of the beneficial association. The check was paid. Subsequently on discovery of the forgery, the bank demanded the money back from the trust company, and upon the latter’s refusal to pay, brought suit. The trust company filed an affidavit of defense alleging that the check had been drawn by the beneficial association without proper precaution, inasmuch as the beneficiary was still alive. It then imputed this negligence to the bank as depository of the association. Meld, that the affidavit of defense was insufficient to prevent judgment.</p>