National Reserve Bank v. Corn Exchange Bank

Scott, J.: The action is for money paid under a mistake of fact. On May 13, 1913, the firm of Charles A. Stoneham & Co., which [196] was a depositor in plaintiff bank, drew its check on said bank to the order of Frederick Mullhunded for the sum of $8.12. Mullhunded, by methods known to forgers, altered the check so that it appeared to be for the sum of $1,800.12, and in that condition presented it to plaintiff bank for certification. Plaintiff stamped upon the face of the check its acceptance payable at another bank, this constituting a certification. Mullhunded then opened an account in defendant bank, depositing the raised check, for which he received credit. ^He subsequently drew,-Q.utq the whole amount. The check wasr6tíírned to plaintiff bank, whiclr^paid"lhe amount thereof to defendant. Upon discovery of the forgery plaintiff demanded repayment, and this having been refused, the present action ensued. It is not questioned that, unless there be something in the present case to take it out of the general rule, the plaintiff is entitled to recover. As was said in a somewhat similar case: “ The right of a bank, certifying a check erroneously, to bring an action to recover back moneys paid upon the certified check, as moneys paid by mistake, as a general proposition, is not questioned. If there was nothing more of the case than that fact, the plaintiff’s right of recovery would be undoubted.” (Continental Nat. Bank v. Tradesmen’s Bank, 173 N. Y. 272, 278.) Nor is it claimed that the certification of the check by plaintiff involved, as matter of law, an affirmation or representation that it was in all respects genuine. It is settled by statute as well as by authority that a bank in certifying a check in the usual form does no more than to affirm the genuineness of the signature of the drawer, and that he has funds on deposit to meet it, and that the funds will not be permitted to be withdrawn to the prejudice of the holder of the check.. But a bank by its certification does not warrant the genuineness of the body of the check. (Neg. Inst. Law [Consol. Laws, chap. 38; Laws of 1909, chap. 43], § 323; Continental Nat. Bank v. Tradesmen’s Bank, supra.) The defendant, not questioning the rules of law above stated insists that plaintiff was guilty of negligence in not having detected the fact that the check had been raised when it was presented for certification, and that by reason of such negligence it, the defendant, was misled into accepting the check at [197] its face value. As to this it is sufficient to say that the opportunity for discovering the forgery was as open to the defendant as to the plaintiff, and that, inasmuch as plaintiff’s certification did not in law amount to a warranty of the genuineness of the body of the check, the defendant had no right to rely upon it as such a warranty. The cases upon which defendant relies are so clearly distinguishable from the case at bar that it is unnecessary to discuss them. Plaintiff calls our attention to several errors in the charge which undoubtedly contributed to the result of the trial and which would in any case call for a reversal. We do not dwell upon these, however, because we are of opinion that upon the undisputed facts the plaintiff was entitled to the direction of a verdict in its favor. The judgment and order appealed from are, therefore, reversed and judgment directed in favor of the plaintiff for the amount claimed, with costs in this court and the court below. The finding of the jury that the plaintiff was guilty of negligence to the detriment of defendant is reversed. Glared, P. J., Dowling, Smith and Page, JJ., concurred. Judgment and order reversed, with costs, and judgment ordered for plaintiff, with costs.