Case Name: Sigemund Wachmann et al., Resp'ts, v. Columbia Bank of the City of New York, App'lt
Court: New York City Court
Jurisdiction: New York
Decision Date: 1893-12-08
Citations: 56 N.Y. St. Rep. 601
Docket Number: 
Parties: Sigemund Wachmann et al., Resp’ts, v. Columbia Bank of the City of New York, App’lt.
Judges: 
Reporter: New York State Reporter
Volume: 56
Pages: 601–603

Head Matter:
Sigemund Wachmann et al., Resp’ts, v. Columbia Bank of the City of New York, App’lt.
(New York City Court, General Term,
Filed December 8, 1893.)
í Bills and notes—Forgeby.
A depositor has a right to assume that the bank, before paying his checks, will ascertain the genuineness of the indorsements.
2. Principal and agent—Notice.
The rule that notice to an agent is notice to his principal, is only applicable to cases where the agent is acting in the course of his employment.
3. Account stated—Impeachment.
An account stated may he impeached by evidence .of fraud or mistake,
4. Appeal—Charge.
It is the duty of the appellant, if he desires a question to be submitted to the jury, to request it in clear and specific language.
Appeal from a judgment in favor of the plaintiffs.
David Leventritt, for resp’ts ; Adolph L. Sanger, for app’lt.

Opinion:
McCarthy, J.
Two questions arise on this appeal from the facts in this case, one of estoppel and the other of negligence.
It seems to us from an examination of the authorities and their application to the facts, this case must be held adversely to the appellant. Weisser v. Denison, 10 N. Y., page 68, which has been approved in all the cases, seems to us to meet all the objections presented by the appellant.
Allen, J., in this case, at page 70, says:
" The jury, by their verdict, pronounced the checks upon which the money in dispute was paid to be forgeries, and it was not claimed that the intestate, Weisser, after he had personal knowledge of the facts, did any act by which he made them his own.
" After the forgeries were discovered by him, he did not in any manner recognize Harlin, the forger, as his agent for drawing the checks.
" The original payment of the checks by the bank was in their own wrong, and if paid to an innocent holder the money could not bo recovered back. Price v. Noel, 3 Burr, 1354; Goddard v. Merchant Bank, 4 Comst., 147; Bank of Commerce v. Union Bank, 3 id., 230.
" The defense in the action is based upon the alleged negligence of Weisser in omitting to examine his bank-book after it had been settled and balanced by the bank and returned with the can-celled vouchers, and to compare them with his book, by which the forgeries might have been earlier detected."
A depositor owes no duty to a bank requiring him to examine his pass-book or returned checks with a view to the detection of forgeries; he has a right to assume that the bank, before paying his checks, will ascertain the genuineness of the indorsements. The rule that notice to an agent is notice to his principal is only applicable to cases where the agent is acting in the course of his employment. An account stated may be impeached by evidence of fraud or mistake. See Welsh v. German American Bank, 73 N. Y., 424, 426-429, and this is fully sustained in Shipman v. The Bank of the State of New York, 126 N. Y., 318-329; 37 St. Rep., 376. There is no evidence that the bookkeeper employed was not a competent person or that the plaintiff did not act in good faith.
The case of the Leather Manufacturers' Bank v. Morgan, 117 U. S., pp. 96 to 122, is not in point and does not disapprove of Weisser v. Denison, for Justice Harlan, after commenting on the authorities says: "We must not be understood as holding that the examination by the depositor of his account must be so close and thorough as to exclude the possibility of any error whatever being overlooked by him.
" Nor do we mean to hold that the depositor is wanting in proper care when he imposes upon some competent person the duty of making that examination and giving timely notice to the bank of objections to the account.
"If the examination is made by such an agent or clerk in good faith and with ordinary diligence, and due notice given of any error in the account, the depositor discharged his duty to the bank.
" But when, as in this case, the agent commits the forgeries which misled the bank and injured the depositor, and, therefore, has an interest in concealing the facts, the principal occupies no better position than he would have done had no one been designated by him to make the required examination, and without at least showing that he exercised reasonable diligence in supervising the conduct of the agent while the latter was discharging the trust committed to his care.
" In the absence of such supervision, the mere designation of an agent to discharge a duty resting primarily upon the principal, cannot be deemed the equivalent of performance of the letter.
" While no rule can be laid down that will cover every transaction between a bank and its depositor, it is sufficient to say that' the latter's duty is discharged when he exercises such diligence as is required by the circumstances of the particular case, including the relations of the parties, and the established or known usages of banking business."
The appeal can only be determined upon the evidence and case presented. The trial justice, it seems to us, was correct in his refusal to charge as requested by the appellant's counsel.
The first request was clearly erroneous and the second was asking the court to determine a question of fact, which it had no right to do. This request was decidedly too sweeping. If the appellant desired the question of negligence to be presented, it was his duty to request the same in clear and specific charges, but this he did not do, and must, therefore, suffer the consequences. But we think following the authorities cited, there was no real evidence of any negligence on the part of the plaintiff. Moody v. Osgood, 54 N. Y., 488.
Judgment should be affirmed, with costs.
Newbubgeb, J., concurs.