Court Opinion

ID: 5445599
Source: CourtListenerOpinion
Date Created: 2022-01-08 18:10:10.786864+00
Date Added: 2024-06-11T08:30:58.770437
License: Public Domain

Paterson, J., dissenting.
I concur in the views of Mr. Justice De Haven on the main questions of law discussed in the opinion, but think that the question whether the defendant sustained any loss by reason of „the plaintiff's failure to notify the defendant earlier of the discovery of the forgery should have been left to the jury. The evidence shows that the plaintiff had notice of the forgery several months prior to the time when he informed the officers of the bank of the fact, and when asked why he had not before spoken of the matter, he replied that he had been working up the case himself. It seems to me that, whatever may be said of the duty of a depositor to examine his checks promptly, it must be conceded that when he has discovered the fact that his signature has been forged, or is informed of circumstances which would put him upon inquiry as to the fact, it is his duty to report the matter immediately to the officers of the bank. If he has willfully withheld from the bank any information he may have had, he ought to be estopped from claiming that the bank could not have protected itself. Under the decision of the majority, it seems to me a dishonest depositor will be enabled, without peril to himself, to perpetrate a fraud upon the bank. If he discover that he has been negli*29gent in examining his checks, he will, nevertheless, be entitled to recover, unless the bank can show that it was prejudiced by his negligence. Now, he will know that the longer he withholds notice of the forgery from the bank, the more difficult it will be for the bank to prove that it could have detected and arrested the forger, and therefore the easier it will be for him to recover. This, it seems to me, is putting a premium upon laches, and encouraging a dishonest depositor even to assist the forger in covering up his tracks.
There is no doubt in my mind that Mr. Janin acted in the utmost good faith, but it is a question of fact which should be left to the jury, whether his long delay in giving the bank notice of the forgery did or did not prejudice the bank. The latter was entitled to immediate notice of plaintiff’s discovery, and it does not follow that because plaintiff failed to detect the forger, the officers of the bank also would have failed to do so. The arrest and detention of a forger is often a strong and effectual means for the restoration of the money, and although it may be a difficult question to determine in certain cases whether the injured party has been deprived of or delayed in the exercise of this coercive power by the negligence of the depositor, it is for the jury, reasoning to practical results from all the circumstances, to say whether it is fairly probable that the defendant could and would have taken effective measures to protect itself. (C. N. Bank v. N. Bank, 50 N. Y. 575; Voorhis v. Olmstead, 66 N. Y. 113.) In Leather Manufacturers’ Bank v. Morgan, 117 U. S. 115, the court said: “If the depositor was guilty of negligence in not discovering and giving notice of the fraud of his clerk, then the bank was thereby prejudiced, because it was prevented from taking steps, by the arrest of the criminal, or by an attachment of his property, or other form of proceeding, to compel restitution. It is not necessary that it should be made to appear, by evidence, that benefit would certainly have accrued to the bank from an attempt to secure payment from the criminal. *30Whether the depositor is to be held as having ratified what his clerk did, or to have adopted the checks paid by the bank and charged to him, cannot be made, in this action, to depend upon a calculation whether the criminal had, at the time the forgeries were committed or subsequently, property sufficient to meet the demands of the bank. An inquiry as to the damages in money, actually sustained by the bank by reason of the neglect of the depositor to give notice of the forgeries, might be proper, if this were an action by it to recover damages for a violation of his duty. But it is a suit by the depositor, in effect to falsify a stated account, to the injury of the bank, whose defense is, that the depositor has, by his conduct, ratified or adopted the payment of the altered checks, and thereby induced it to forbear taking steps for its protection against the person committing the forgeries. As the right to seek and compel restoration and payment from the person committing the forgeries was in itself a valuable one, it is sufficient if it appears that the bank, by reason of the negligence of the depositor, was prevented from promptly, and it may be effectively, exercising it.....It seems to us that if the case had been submitted to the jury, and they had found such negligence upon the part of the depositor as precluded him from disputing the correctness of the account rendered by the bank, the verdict could not have been set aside as wholly unsupported by the evidence. In their relations with depositors, banks are held, as they ought to be, to rigid responsibility. But the principles governing those relations ought not to be so extended as to invite or encourage such negligence by depositors, in the examination of their bank accounts, as is inconsistent with the relations of the parties or with those established rules and usages sanctioned by business men of ordinary prudence and sagacity, which are or ought to be known to depositors.” (See also Hardy v. Chesapeake Bank, 51 Md. 562; 34 Am. Rep. 325; Casco Bank v. Keene, 53 Me. 103.)
It is true that was the case of an altered check, arid *31this is a case of forged signature, but the principles announced by Mr. Justice Harlan are as applicable on the question before us to one case as to the other. A banker is not bound to know the handwriting of the body of the check, but is bound to know the depositor’s signature. .He is not bound to detect a skillful alteration, which can only be known to the drawer of the check, and the latter is, therefore, bound to detect the alteration at the earliest opportunity, and inform the bank thereof. In these and many other respects the principles applicable to the two cases are different; but when it appears that the plaintiff’s negligence contributed to the injury, the question whether the bank was prejudiced by the failure of the plaintiff to exercise ordinary care is as material in one case as in the other, and must be determined by the same roles.
I do not claim, as intimated in the opinion above quoted, that the law would presume the bank was prejudiced by the long delay and negligence of the depositor in failing to detect and report the forgery. That is a question, I think, which should be left to the jury. (Dana v. National Bank, 132 Mass. 156.) It is claimed by respondent that there is no evidence tending to show that the bank was prevented from tracing and discovering the forger, or from exercising its right to recover the money, through reliance on plaintiff’s implied admission of the correctness of the account rendered. On the other hand, it is claimed by appellant to be clearly shown by the evidence that the bank was misled to its prejudice through such negligence. The fact that the bank did not require the signature of the stranger to whom the money was paid, that it took no evidence as to his identity, and made no effort to detect the forgery at any time, but constantly insisted that' the check was genuine, although possessed of evidence tending to show that Hooper was the forger, are matters for the consideration of the jury. So, also, the fact that the plaintiff allowed long periods of time to elapse between the occasions when he presented his bank-book to be balanced, and that he frequently asked *32the teller of the bank for his balance instead of consulting his bank-book, that he neglected to examine the book with the return checks for several months after September 4,1878, that he had expressed surprise at the smallness of the balance as shown by the books of the bank, and his failure to notify the bank until February, 1879, eight months after he began to doubt the genuineness of the check, are all matters to be considered by the jury in determining the questions at issue. The court cannot say, it seems to me, that as a matter of law under such circumstances the plaintiff is entitled to recover. I am unable to see any force in the suggestion that the officers of the bank took no steps at the time the check was paid to identify the person who presented it. Unless the paying teller has a suspicion as to the genuineness of the signature of a check payable to bearer, he is not called upon to make and preserve evidence as to such identity, and if such precautions had been taken in this case, that fact would have been conclusive evidence that the bank had notice of facts which put it upon inquiry. In such a case, of course the bank would have no defense, even if the depositor was guilty of negligence.
It is said that there is no evidence from which it can be reasonably inferred that the plaintiff’s delay prejudiced the defendant. But the inability of the defendant to produce such evidence may have been caused by the lapse of time between the time when plaintiff, acting as a prudent man, ought to have discovered and given notice of the forgery, and the time when such notice was in fact given. This is peculiarly a question for the jury, under proper instructions from the court.