Snyder v. Corn Exchange National Bank

Citations

• 221 Pa. 599
• 70 A. 876
• 1908 Pa. LEXIS 537

Syllabus

<p>Banks and banking — Checks—Forgery—“Fictitious person” — Act of May 16,1901, P. L. 194.</p> <p>Where a business firm gives to a clerk a power of attorney to draw checks against its account, and there is nothing in the power of attorney to limit the purpose for which the checks may be drawn,1 or to prohibit the checks from being drawn to bearer, and the clerk draws a check to a person having no business relations whatever with the firm, and forges the name of such person as indorser, and the bank pays the checks, the depositing firm cannot recover the amount of the checks from the bank. The payee of the check is a fictitious person within the meaning of the Act of May 16,1901, P. L. 194. It is, therefore, a check made payable to bearer, and the forgery of the payee's name has no bearing in the transaction as affecting the bank's liability.</p> <p>In such a case the fact that the clerk delivered the checks to the proprietors of a “bucket shop” in connection with a gambling transaction, is immaterial; and it is also immaterial that a trust companv in which the checks had been deposited for collection guaranteed the signatures of their depositors, inasmuch as the checks when delivered to the brokers were in contemplation of law cheeks to bearer, and the guaranty was limited only to the indorsement of the brokers.</p> <p>The rule that a bank is liable to its depositor for paying a check on a forged indorsement, applies where a check has been lost or stolen and the payee’s name has afterwards been forged; but it does not protect a depositor who is in fault, as in intrusting a check to one who he has reason to suppose will make a fraudulent use of it, or in so carelessly filling up a check that it may readily be altered, or in issuing a check to a fictitious person. It is confined to cases in which the depositor has done nothing to increase the risk of the bank.</p>