Court Opinion

ID: 9833768
Source: CourtListenerOpinion
Date Created: 2023-09-01 23:00:22.138243+00
Date Added: 2024-06-11T07:44:06.564197
License: Public Domain

On Appellee’s Motion for Rehearing.
We did not pass on the question' of a bank’s liability as a collection agency in our original opinion, and it was not in appellee’s capacity as a collecting agent that it was adjudged liable. The mere delivery of the cashier’s check to Pattee caused no loss. The loss was caused by the notation which was placed thereon by one of appellee’s vice-presidents. Until that notation was made on the check, Pat-tee and Wick would have found it impossible to get the money on it because the primary banking rule which governs the paying out of monqy on a check is that it shall be paid only to him who is known to the' paying teller as the payee (or en-dorsee) in the check, or who is identified as such. And, of course, anyone who assumes the responsibility of identifying the payee of a check is answerable to the bank if the bank pays ,out such money to such person, so identified as being the payee named in the check, if he happens not to be such a one as he was mistakenly identified to be. Appellant had the right to trust to this primary banking rule being observed. And had it been observed in this instance, no loss would have occurred, because Pattee could never have been identified as being “Marvin G. Ellis”, under the standard which banks must follow, which is quoted in our original opinion. The fact that appellee happened to be connected with the transaction as a collection agent cannot absolve it from liability for the action of its vice-president in having violated such rule.
Had the notation not been placed on the check, no paying teller would have paid it out unless or until such proof was forthcoming as would have exposed the fact that there was no such person as “Marvin G. Ellis”, and then would have been no loss. Certainly this would be true if paying tellers observed this primary banking rule, and we believe we are authorized to take judicial knowledge that they do. And if some paying teller had violated such rule, and paid out the money on the check to Pattee or Wick on the assumption that he was “Marvin G. Ellis”, without requiring proper assurance (which requirement would have exposed the fraud), then such negligence on the part of such paying teller would have rendered his bank liable for the resulting loss as a matter of law under the Lively case. Under the circumstances of this case, and so far as appellee’s tellers were concerned, the notation made the check, in effect, payable to bearer.
Appellee’s motion for rehearing is overruled.