State Ex Rel. Keel v. Wynne

Clarkson, J. The sole question presented on this appeal: Is the defendant liable to the plaintiff on check which was drawn payable to Harold Johnson, which was delivered by defendant to Lee Johnson, who impersonated Harold Johnson, Lee Johnson having forged the endorsement of Harold Johnson on check in the presence of plaintiff, and the plaintiff having endorsed said check by writing on same “O.K., J. W. Keel,” and the check bearing on its face the language, “Court order received from M. L. Bunting to Branch Banking & Trust Company, Williamston, North Carolina”? We think not. *429 In R. R. v. Kitchin, 91 N. C., 39 (44), the following principle is laid down in this jurisdiction: “Where one of two persons must suffer loss by the fraud or misconduct of a third person, he who first reposes the confidence, or by his negligent conduct made it possible for the loss to occur, must bear the loss.” Bank v. Liles, 197 N. C., 413. The plaintiff invokes the above rule in this action, but we do not think it applicable to the facts agreed upon in this case. Lee Johnson was a brother of Harold Johnson, but impersonated his brother to obtain the check. The check was not made payable to Lee Johnson, but to Harold Johnson, and on the check was “Court order received from M. L. Bunting.” To obtain the money on the check it was necessary that Harold Johnson endorse same. This he did not do. Lee Johnson represented himself to J. W. Keel, the plaintiff, to be Harold Johnson, and forged the name of Harold Johnson to the cheek in his presence — “Mr. Harold Johnson.” J. W. Keel endorsed said check on the back, “O.K., J. W. Keel.” The endorsement by J. W. Keel “O.K.” identified the imposter and no doubt induced the bank to cash the check. Keel made no investigation, required no identification, asked no questions. On the check was “Court order received from M. L. Bunting.” Keel made no inquiry as to this, but endorsed “O.K.” on the back of the check. Webster’s New International Dictionary (2d Ed.) defines “O.K.”: “Correct; all right; endorsed or put on documents, bills, etc., to indicate approval; colloquial exc. as us.e of the approval of documents, etc.” The plaintiff Keel endorsed the check “O.K.,” viz.: “Correct, all right,” without inquiry. We think that a reasonably prudent man, under the circumstances, should not have done so, and he must bear the loss. Under the facts and circumstances of this case, if plaintiff ever had any rights against defendant Wynne, the clerk, he is estopped to complain by his own negligence. Tolman v. Am. Nat. Bk., 22 R. I., 462. N. C. Code of 1935 (Michie), sec. 3003. The judgment below is Affirmed.