Court Opinion

ID: 6256823
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:44:51.073441+00
Date Added: 2024-06-11T08:59:34.429310
License: Public Domain

Dissenting Opinion by
Mr. Justice Horace Stern :
Judgment for defendant n. o. v. was entered in the Court of Common Pleas of Beaver County by the trial judge, F. Cortez Bell, and Judges Robert E. Mc-Creary and Morgan H. Sohn, sitting en banc. Believing, as I do, that the conclusion reached by that court was correct, I must dissent from our present action in reversing it.
It seems to me that both facts and law are stated in the majority opinion very inadequately.
First as to the facts, — and in that connection I shall rely only upon the testimony of plaintiffs themselves.
The forger, William Jackson, was the son of plaintiff Fannie L. Johnson and the step-son of plaintiff A. A. (Alexander) Johnson, and he made his home with them. The checks for the bank’s payment of which they obtained a verdict were forged by Jackson in the period *468from July 23 to September 18, 1948. Plaintiffs had gone south on a vacation trip on July 23 and Johnson testified that when they left on that day there was a balance in their joint checking account of $3,723; after their return they made deposits in August aggregating $135, so' that when, on September 20, Johnson visited the bank to get a statement of their account he knew that the balance to their credit should have been $3,858. The clerk told him, however, that the balance was then only $1,188 (Johnson so testified; the correct amount was actually $1,088). Thus faced with what must have been to him a staggering revelation, Johnson contented himself by merely remarking to the clerk: “I know I had more money than that”; he also claims to have said: “I say the money is misappropriated”. He apparently had immediate (but. unexpressed) suspicions as to the reason for the shortage because he then and there transferred $738 from the checking account into a savings account in his own name, — obviously to prevent future shrinkages, — :and immediately upon reaching home and examining the cancelled checks which he had received from the bank he sent for Jackson and opened conversation with him by the accusatory question: “What did you mean by doing a thing of that kind?” Jackson at once confessed to the forgeries and asked for three days time in which to see if he could restore the money and afterwards for additional time in order to consult relatives in Chicago to see if they could help him out. His efforts in that direction failing, Johnson and Jackson entered into a written agreement on September 28 in which Jackson agreed to pay $2,700, the then approximate amount of the forgeries, in instalments of $75 every two weeks. All that he was able to pay under this agreement, however, was $40, and finally, on November 16, Johnson had him arrested.; he was bound over by the Alderman for court; he pleaded guilty and was sentenced on Decern*469ber 8 to a term in the penitentiary. Meanwhile Johnson visited the bank some time around the middle of October. Inquiring as to the balance then in the account he was told that there was no balance; (the $350 remaining on September 20 had been drawn out the first week of October on two additional forged checks). He thereupon went to the cashier and said to him: “Mr. Luce, there’s $3120 of my money gone, for what reason I don’t know.” This was a palpable falsehood, for, as already stated, Jackson had confessed the forgeries to him on September 20; he did not tell the cashier the truth, namely, that, as he knew, the money had been, obtained by his step-son on forged checks, that he had been trying to have him make restitution, and that he had actually entered into a written agreement with him for that purpose. Johnson’s final visit to the bank was in company with his wife and his attorney sometime after Jackson had been sentenced on December 8, when they made demand on the bank preparatory to beginning the present suit.
So much for the facts. As far as the law is concerned, there can be no question but that; by an overwhelming number of decisions both in this Court and the Superior Court, three principles have been firmly established. The first is that, when a depositor has knowledge that a bank has improperly paid out moneys in his account on forged checks, it is his duty — and the sine qua non of his right of recovery against the bank — to give the bank prompt notice of the forgeries. The majority opinion undertakes to say that the word “‘timely’ rather than ‘prompt’ more correctly defines the character of notice which a depositor is required to give.Ms bank of a forged check charged to his account”. Apart from the fact that the word. “timely” is wholly too--vague in connotation :.to be capable of legal, ap-. plication, the fact is that in-no single-adjudicated casé has thé;réqüiféd-'-nótiéé;béén held :to -bé one-t'hat-is mere*470ly “timely”; on the contrary, all the cases explicitly hold that prompt notice must be given.1 The second established principle is that, on fixed or conceded facts, the question as to whether notice of the forgeries measures up to the required standard of promptness is one for the determination, not of the jury, but of the court as a matter of law.2 The third principle is *471that it is not necessary for the bank to show that if the notice of the forgeries had been given promptly it might'have been, better able to protect itself by obtaining reimbursement from the forger or his relatives or friends; on the contrary, the failure of the depositor to give prompt notice absolves the bank of all liability irrespective of whether or not it has thereby suffered any disadvantage or loss.3
Although I have thus attempted to marshal the authorities in order to show that the law here applicable is firmly fixed and not in the doubtful or vulnerable state lvhich the discussion in the majority opinion would seem to attribute to it, the question as to when notice of the forgeries should have been given in the present case is really academic, because, under plain*472tiffs’ own testimony, they never gave to the bank any notice other than their attorney’s demand in December made as a basis for legal action. As previously stated, when Johnson learned of the balance in the checking account on September 20 he “told the lady” that “he knew he had more money than that”, — testimony which he afterwards amplified by adding that he said also: “the money is misappropriated.” Can it be seriously argued that these statements constituted a notice to the bank of the forgery of checks? Indeed what the law requires by way of notification is not. only that money has been paid out by the bank on forged checks but a specific pointing out to the bank of the check or checks as to which forgery is claimed, because the sole object of the notice is to enable the bank to take measures against the forger of such a check or checks in order to secure, if possible, the restoration of the funds. The law goes even further, for it requires that not only must such specific notice be given, but that the depositor, at the time of notifying the bank of the forgery, must, on demand, return the particular check or checks in question to the bank: Roth v. Crissy, 30 Pa. 145; Rick v. Kelly, 30 Pa. 527;. Showers v. Merchants National Bank, 293 Pa. 241, 243, 142 A. 275, 276; Interstate Hosiery Mills, Inc. v. First National Bank of Lansdale, 139 Pa. Superior Ct. 181, 190, 191, 11 A. 2d 537, 542. “Misappropriation” of money can take place in very many ways other than by honoring forged checks, and a general statement that “money is misappropriated” is a far cry from informing the bank that it has paid out money on certain checks having forged signatures or endorsements. I venture to say that there is not a single .case in the books — at least I have not been able to find any— which holds: that the requirement that..notice of for-. gery.be. given to 'the-bank'is satisfied-by any thing- shorf of a notice that specified or designated checks, re-*473turned by tbe bank to tbe depositor as paid, were forged, thereby enabling the bank to proceed against the forger to whom the improper payment or payments had been made. The fact is, therefore, that, although Johnson admits that on September 20 Jackson confessed the forgeries, never from that time until demand and notice of suit nearly three months later did plaintiffs give the slightest intimation to the bank that any forgeries had been committed. On the contrary, Johnson, in October, told the bank that $3,120 of his money was gone, for what reason he did not lenow. Thus, instead of notifying the bank of the forgeries which his step-son had confessed to him on September 20 and of his efforts since then to recover reimbursement, he carefully concealed those facts from the bank, even to the extent of deliberate falsification. The reason for this conduct on his part is so obvious that he that runs may read. Jackson was plaintiffs’ wayward son, and they naturally did not want to expose him to prosecution by the bank if the matter could otherwise be adjusted,- — a result that they tried in vain to accomplish. While their tenderness toward him may be understood and even viewed with sympathy, certainly, having adopted that course, they cannot months afterwards come for redress upon the bank whose hands they had meanwhile kept tied, partly by means of concealment and partly by actual misrepresentation.
The majority opinion suggests that no notice to the bank was required because the jury may have found that the bank had knowledge of its own of the forgeries.4 This proposition rests upon two alleged incidents. The one is, as Johnson testified, that when the cancelled checks were returned to him by the bank on *474September 20 they were handed to him in two envelopes, one containing 5 checks drawn by plaintiffs themselves prior to July 23, and the other containing the 15 checks subsequent to that date which Jackson had forged. Assuming this testimony to be true, in spite of its inherent improbability, the inference is attempted to be drawn therefrom that the bank thereby showed that it knew that the 15 checks were forged. In the first place, it may be asked how the bank could possibly have possessed such knOAvledge on September 20, when there is not the slightest suggestion in the record of anything which could have given it such knowledge, especially in vieAV of the fact that it had honored one of the forged checks only two days before. In the second place, it may also be asked what reason could there be for such action on the part of the bank? What purpose of its own, intelligent or otherwise, could it have served? And if, for some non-understandable reason, it Avished to call Johnson’s attention to the 15 checks as distinguished from the other 5 as having been forged, why should it have resorted to such pantomimic a method as handing him the checks in two envelopes instead of informing him directly of the fact? In the third place, — and this certainly should be conclusive, — if the bank knew on September 20 of the forgeries, would it have honored the two checks presented by Jackson two weeks later, — the one on October 1 and the other on October 4? Indeed the jury itself must have found that the bank had neither knowledge nor notice of the forgeries prior to its honoring the October checks for it did not allow plaintiffs a recovery for the bank’s payment of those checks.5
*475The other incident referred to in the majority opinion is that, by the bank’s paying to Jackson the amount of the October 4 check of $180, plaintiffs’ account became overdrawn to the extent of $33, and that amount was refunded to the bank by Jackson. The majority opinion states that it was such an unusual transaction for Jackson to make good the overdraft instead of the bank calling on plaintiffs to do so, that this ought to have caused the bank to question the regularity of the transaction. The fact is, however, which the majority opinion neglects to state, that, after Jackson cashed the check of October 4, he came back to the bank that very same day and presented an additional check, whereupon the clerk, finding that the account had just been overdrawn, called Jackson’s attention to that fact, whereupon Jackson promptly paid the $33, and, of course, the additional check was not honored. Since it is plain, therefore, that the bank was immediately reimbursed and never had an opportunity, or any occasion, to notify plaintiffs of the overpayment, the incident loses all significance as one from which an inference could be drawn of any suspicious irregularity, much less that the bank knew, or should have known, that any of the checks had been forged.
By way of summary I conclude by saying that while, of course, the bank was bound, by implied contract, to pay out funds on plaintiffs’ account only on their genuine checks, the law imposed a correlative duty on the plaintiffs as depositors, after discovering any forgeries, to notify the bank thereof — whether “promptly” or “timely” in this case makes no difference because, not only was no such notice ever given, but, on the con*476trary, it was deliberately withheld. Furthermore, there is not a scintilla of evidence from which the jury could have been allowed to find that the bank had independent knowledge of the forgeries which excused the plaintiffs from giving it the notice otherwise required by law. To my mind the opinion filed by the court below accurately stated the law and correctly applied it to the facts, and I believe that our present decision unjustly imposes a liability upon the defendant bank contrary to the principles set forth in all of our adjudicated cases. I would therefore affirm the order of the court below directing the entry of judgment in defendant’s favor.
Mr. Justice Bell and Mr. Justice Chidsey concur in this dissenting opinion.

 States v. First National Bank of Montrose, 203 Pa. 69, 74, 52 A. 13, 15; McNeely Co. v. Bank of North America, 221 Pa. 588, 592, 594, 70 A. 891, 892; Connors v. Old Forge Discount and Deposit Bank, 245 Pa. 97, 99, 91 A. 210, 211; Marks v. Anchor Savings Bank, 252 Pa. 304, 309, 97 A. 399, 400; Showers v. Merchants National Bank, 293 Pa. 241, 243, 142 A. 275; Reimel v. Northwestern Trust Co., 298 Pa. 503, 508, 148 A. 706, 707; Commonwealth v. Globe Indemnity Co., 323 Pa. 261, 267, 268, 185 A. 796, 799; Peoples City Bank v. John Hancock Mutual Life Insurance Co., 353 Pa. 123, 131, 44 A. 2d 514, 518; Murray v. Real Estate Title Insurance & Trust Co., 39 Pa. Superior Ct. 438, 440, 441, 443; Knights of Joseph Building & Loan Association v. Guarantee Trust & Safe Deposit Co., 69 Pa. Superior Ct. 89, 92, 93; Almar Building & Loan Association v. Broad Street Trust Co., 111 Pa. Superior Ct. 49, 51, 54, 169 A. 262, 263; Boosel v. Agricultural Insurance Co., 118 Pa. Superior Ct. 400, 404, 180 A. 21, 23; Interstate Hosiery Mills, Inc. v. First National Bank of Lansdale, 139 Pa. Superior Ct. 181, 186, 189, 190, 191, 11 A. 2d 537, 540, 541, 542.
The majority opinion says that “What was said- in the Mc-Neely case with respect to a depositor’s duty to give his bank prompt notice that it had paid and charged to his account a forged check was, in reality, superfluous to the decision in that case.” This attack on the MeNeely case as authority for the proposition that prompt notice of the forgery must be given loses sight of the fact that that case has been cited with approval and followed in the many decisions enumerated in this footnote.

 Marks v. Anchor Savings Bank, 252 Pa. 304, 310, 97 A. 399, 401; Reimel v. Northwestern Trust Co., 298 Pa. 503, 508, 148 A. 706, 707; Murray v. Real Estate Title Insurance & Trust Co., 39 Pa. Superior Ct. 438, 444; Knights of Joseph Building & Loan Association v. Guarantee Trust & Safe Deposit Co., 69 Pa. Superior Ct. 89, 93; Interstate Hosiery Mills, Inc. v. First National Bank Of Lansdale, 139 Pa. Superior Ct. 181, 188, 11 A. 2d 537, 541.

 United Security Life Insurance & Trust Co. of Pennsylvania v. Central National Bank of Philadelphia, 185 Pa. 586, 596, 40 A. 97; McNeely v. Bank of North America, 221 Pa. 588, 594, 595, 70 A. 891, 892, 893; Lesley v. Ewing, 248 Pa. 135, 139, 93 A. 875, 876; Union National Bank v. Franklin National Bank, 249 Pa. 375, 389, 94 A. 1085, 1089; Marks v. Anchor Savings Bank, 252 Pa. 304, 307, 308, 97 A. 399, 400; Murray v. Real Estate Title Insurance & Trust Co., 39 Pa. Superior Ct. 438, 441, 442; Knights of Joseph Building & Loan Association v. Guarantee Trust & Safe Deposit Co., 69 Pa. Superior Ct. 89, 93; Interstate Hosiery Mills, Inc. v. First National Bank of Lansdale, 139 Pa. Superior Ct. 181, 187, 11 A. 2d 537, 540.
The majority opinion says that the United Security Life Insurance & Trust Go. case was decided three years before Pennsylvania’s adoption of the Negotiable Instruments Law, the intimation being that in some way or for some reason the Negotiable Instruments Law outmoded it. This attack on that case as authority for the proposition that it does not ¿vail the depositor, to show that even if notice had been given promptly the bank would not have been better off, ignores the fact that the United Security Life Insurance & Trust Go. case has been followed in the many decisions enumerated in this footnote, all of w;hieh have been subsequent in time to the adoption of the Negotiable Instruments Law, ' . ; ...

 It is significant that no . request was made. by plaintiffs’ counsel to submit such -a question, nor was it submitted, to the jury. • ■: ■- - .....

 It may parenthetically be noted that the verdict of the jury shows a complete misunderstanding ■ on their- part of the judge’s charge in regard to the necessity of notice, for obviously if-plain? tiffs were not entitled to recover on the October checks because *475of not having given proper notice of the forgeries they were not entitled, a fortiori, to recover on- the' earlier cheeks. From every possible viewpoint, therefore, the. .verdict of the jury was indefensible. .; .