United States National Bank v. Union National Bank

Citations

• 268 Pa. 147
• 110 A. 792
• 1920 Pa. LEXIS 643

Syllabus

<p>Banks and hanking — Forged check — A cceptance of check — Negligence — Notice—Esioppel^-Acts of April 6, 181$, P. L. and May 16,1901, P. L. 191,.</p> <p>1. The mere acceptance or payment of forged paper is not of itself a bar to the recovery of the money by the party paying, nor is such party absolutely bound as at common law to discover and give notice of the forgery on the very day of payment, but notice must be given promptly according to tbe circumstances and the usage of the business, and, unless the position of the party receiving the money has been altered for the worse in the meantime, the date of notice is not material.</p> <p>2. If the proceeds o£ a forged check are in the hands of a collecting bank as agent of the bank in which the check was deposited, or in the hands of the latter bank as principal, when notice is given of the forgery, there is no damage to either, and the paying bank’s right to recoupment is complete, regardless of negligence.</p> <p>3. No one may be allowed to retain the consideration received by him on a forged instrument, however innocent he may be, unless he can invoke the aid of the doctrine of estoppel.</p> <p>Banks and banking — Forged check — Principal and agent — Suit against agent — Defenses—Disclosed principal — Estoppel—Bes -adjudicata — Act of April 5, 18J/S, P. L.</p> <p>4. An agent should not be sued when there is a disclosed principal known as such at the inception of the transaction.</p> <p>5. Where a statute gives a right of action against the holder of % forged check, whether agent or principal, a collecting bank is liable in a suit against'it by the paying or drawee bank, and in such suit the collecting agent bank may set up every defense which its principal might have arising out. of the transaction in question; and when the principal knows of the action, the right and duty of such defense rests on both alike.</p> <p>6. The collecting bank may show in defense, by way of estoppel, that the drawee bank had not used