States v. First National Bank

Opinion by William W. Portee, J., Jacob States, Sr., died making his son, Jacob States, Jr., the executor of his will, and bequeathing $1,000 to his married daughter, Rebecca Vincent, whose residence was in Montgomery, Alabama. After his father’s death Jacob States, Jr., the plain [259] tiff, sent several letters to his sister through the mail and received replies purporting to come from and to be signed by her. The result of the correspondence was an agreement to pay $900 in discharge of the legacy aforesaid. In order to remit this amount, the plaintiff bought a draft of the defendant bank, drawn upon the Chase National Bank of New York and to the order of Rebecca Vincent. The draft was delivered to the plaintiff and forwarded by him to his sister, Rebecca Vincent. He received what purported to be her receipt. The draft was indorsed with the name of Rebecca Vincent, presented to a firm of bankers, through whom it passed eventually to the Chase National Bank of New York, and was paid. It subsequently transpired that Rebecca Vincent was dead at the time of the death of her father. The correspondence with the plaintiff was conducted by her husband who impersonated his deceased wife. The draft was sent to him pursuant to this correspondence, drawn to the name of the wife, whose death was unknown to the plaintiff. The indorsement of the name of Rebecca Vincent was forged by her husband. Subsequently, the children of Rebecca Vincent compelled the payment to them of the legacy given by their grandfather’s will to their mother. Thus, the plaintiff was compelled to pay the legacy twice. He now sues to hold the defendant bank liable because of the payment of the draft upon the forged indorsement of the name of Rebecca Vincent. When the judgment in this case was entered the reports in Pennsylvania were barren of precedent bearing upon the controversy. Subsequently the case of Land Title and Trust Co. v. Northwestern Nat. Bank, 196 Pa. 230, was decided. While the two cases are not identical in their facts, yet the doctrine asserted and applied by Mr. Ju'sti'ce Fell, substantially rules this case adversely to the plaintiff. It was held, in the case cited, that a bank is not liable for the payment of a check on a forged indorsement where the person who committed the forgery and received the money was in fact the person to whom the drawer delivered the check and whom he believed to be the payee named. It is to be observed that the case before us is not that of a lost check or draft upon which payment has been secured on a forged indorsement. The draft in this case was forwarded by the plaintiff to one who was impersonating the plaintiff’s [260] dead sister. It was an imposition' perpetrated by correspondence. The plaintiff, in fact, dealt with the husband of the deceased Rebecca Vincent, believing his correspondent to be the true Rebecca Vincent. ■ To the husband the draft was sent by the plaintiff. By the impersonator or by his direction, the draft was indorsed with the name of Rebecca Vincent. The payment was thus made to the identical person to whom the draft was sent by the plaintiff. The loss to the plaintiff in this case is the result of the deception practiced upon him. To allow him now to recover from the bank would be to shift the responsibility for failing to discover the deception, from the plaintiff to the ’bank from whom he bought the draft; to throw “ upon the bank the risk of an antecedent fraud practiced upon ” the purchaser of the draft of which the bank “ had neither knowledge or means of knowledge.” To continue the- quotation from Mr. Justice Fell’s opinion: “ In such a case the intention with which the drawer issued the check has been carried out; the person has been paid to whom he intended payment should be made; there has been no mistake of fact except the mistake which he made when he issued the check, and the loss is due not to the bank’s error in failing to carry out his intention, but primarily to his own error into which he was led by the deception previously practiced upon him.” If the defendant bank had cashed a check with indorsement forged by an impersonator accredited by the drawer, there could be no recovery by the drawer against the bank. The purchaser of a draft who assumes the duty of forwarding it to the payee stands in no better position. The deception is the same and the responsibility falls upon the purchaser of the draft upon whom the deception was primarily and successfully practiced. See also United States v. National Exchange Bank, 45 Fed. Repr. 163; Crippen et al. v. American National Bank, 51 Mo. App. 508. The fact that the fraud was accomplished by correspondence to which the plaintiff gave credence, does not remove the case from the application of this principle. In Maloney v. Clark, 6 Kan. 82, (cited with approval in Trust Company v. The Bank, supra), the facts were practically identical with those in the case before us. See also Emporia National Bank v. Shot-well, 35 Kan. 360. The judgment is reversed and judgment is now entered for the defendant on the point reserved.