Wachsmann v. Columbia Bank

McCarthy, J. Two questions arise on this appeal from' the facts in this case — one of estoppel and the other of negligence. It seems to us, from an examination of the authorities and their application to the facts in this case, that these must be held adversely to the appellant. Weisser v. Denison, 10 N. Y. 68, which has been approved in all the cases, seems to us to meet all the objections presented by the appellant. Allen, J., in this case, at page 10, says: “ The jury, by their verdict, pronounced the checks upon which the money in dispute was paid to be forgeries; and it is not claimed that the intestate Weisser, after he had personal knowledge of the facts, did any act by which he made them his own. After the forgeries were discovered by him he did not in any manner recognize Harlin, the forger, as his agent for drawing the checks. The original payment of the checks by the bank was in their own wrong, and if paid to an innocent holder the money could not be recovered back. Price v. Neal, 3 Burr, 1354; Godard v. Merchant Bank, 4 N. Y. 147; Bank of Commerce v. Union Bamk, 3 id. 230. The defense in the action is based upon the alleged negligence of Weisser in omitting to examine his bank book after it had been settled and balanced by the hank,- and returned with the canceled [63] vouchers, and to compare them with his check book, by which the forgeries might have been earlier detected. "x" * * ” A depositor owes no duty to a bank requiring him to examine his pass book or returned chocks, with a view to the • ■detection of forgeries; he has a right to assume that the bank, before paying his checks, will ascertain the genuineness of the indorsements. The rule that notice to an agent is notice to his principal is only applicable to cases where the agent is acting in the course of his employment. An account stated may be impeached by evidence of fraud or mistake (see Welsh v. German-American Bank, 73 N. Y. 424, 426, 427, 428, 429), and this is fully sustained in Shipman v. Bank of the State of New York, 126 N. Y. 318-329. There is no evidence that the bookkeeper employed was not a competent person or that the plaintiff did not act in good faith. The case of Leather Manufacturers' Bank v. Morgan, 117 U. S. 96-116, is not in point and does not disapprove of . Weisser v. Denison, for Justice Hablan, after commenting on the authorities, says: “We must not be understood as holding that the examination by the depositor of his account must be so close and thorough as to exclude the possibility of any error whatever being overlooked by him. Nor do we mean to hold that the depositor is wanting in proper care when he imposes upon some competent person the duty of making that examination and of giving timely notice to the bank of objections to the account. If the examination is made by such an .agent or clerk in good faith and with ordinary diligence, and due notice given of any error in the account, the depositor dis■charges his duty to the bank. But when, as in this case, the agent commits the forgeries which misled the bank and injured the depositor, and, therefore, has an interest in. concealing the facts, the principal occupies no better position than he would have done had no one been designated by him to make the required examination, -without, at least, showing that he ■exercised reasonable diligence in supervising the conduct of [64] the agent while the latter was discharging the trust committed to him. In the absence of such supervision, the mere-designation of an agent to discharge a duty resting primarily upon the principal, cannot be deemed the equivalent of performance by the latter. While no rule can be laid down that will cover every transaction between a bank and its depositor, it is sufficient to say that the latter’s duty is discharged when he exercises such diligence as is required by the circumstances of the particular case, including the relations of the parties and the established or known usages of banking business.”. The appeal can only be determined upon the evidence and case presented. The trial justice, it seems to us, was correct in his refusal to charge as requested by the appellant’s counsel. The first request was clearly erroneous and the second was asking the court to determine a question of fact, which it had no right to do. This request was decidedly too sweeping. If the appellant desired the questions of negligence to be-presented, it was his duty to request the same in clear and specific charges, but this he did not do, and must, therefore, suffer the consequences. But we think, following the authorities cited, there was no real evidence of any negligence on the part of the plaintiff.. Moody v. Osgood, 54 N. Y. 488. The judgment should be affirmed, with costs. Uewbubgeb, J., concurs. Judgment affirmed, with costs.