Opinion
December 10, 1937.
January 3, 1938.
Negotiable instruments — Check — Delivery to impostor — Rights of drawer and drawee.
The drawer of a check, who delivers it to an impostor, supposing him to be the person whose name he has assumed, must, as against the drawee or a bona fide holder, bear the loss where the impostor obtains payment or negotiates the same.
Argued December 10, 1937.
Before SCHAFFER, MAXEY, DREW, LINN, STERN and BARNES, JJ.
Appeal, No. 111, Jan. T., 1937, from judgment of C. P. No. 4, Phila. Co., Sept. T., 1933, No. 318, in case of North Philadelphia Trust Company v. Kensington National Bank. Judgment affirmed.
Assumpsit.
Verdict directed for defendant and judgment entered thereon.
The facts are stated in the opinion of the lower court, FINLETTER, P. J., as follows:
One Margaret O'Hara was the owner of premises 1115 Marlborough Street. What purported to be a mortgage by her on these premises was to be taken by a building association. Title insurance was to be furnished by the plaintiff trust company. A meeting for settlement was held, as a result of which the mortgage presented in the name of Margaret O'Hara, as mortgagor, was accepted by the building association. The latter had already deposited the amount needed in the transaction with the plaintiff.
The plaintiff issued a policy of insurance on the mortgage and paid the proceeds of it to a person whom the plaintiff supposed to be Margaret O'Hara, but who was in fact an impostor, and later the latter presented the plaintiff's check to the defendant, with whom she had a checking account, which deposited the proceeds to her credit. These were subsequently drawn out by the impostor.
The plaintiff now wishes to recover the proceeds of the check, on the theory that it was a forgery.
It will be profitable to cite the facts somewhat in detail:
(1) Margaret O'Hara was the owner of premises 1115 Marlborough Street.
(2) A woman who we will refer to as "A" took the title papers to responsible conveyancers, Edward T. Flood Son, for the purpose of having them apply for a loan of $4,500 to be secured by a mortgage on the property. It is true that there is no direct evidence that "A" took the title papers to the Messrs. Flood, but it is clear that she was a client of theirs, and that they believed her to be the owner of the property, Margaret O'Hara.
(3) The conveyancers believing "A" to be Margaret O'Hara, negotiated a loan with the Suburban Building and Loan Association.
(4) The latter desiring title insurance by the plaintiff deposited with it the amount of the loan, so that it might be paid to the mortgagor when a valid mortgage was executed.
(5) When the matter was ready for settlement "A," who on that date called herself "Miss O'Hara," went with an employee of the conveyancers to the office of the title company and was there presented to the settlement clerk as Margaret O'Hara.
(6) "A" signed the mortgage as Margaret O'Hara, acknowledged it, and received from the title company through the conveyancer the company's check drawn on itself to the order of Margaret O'Hara.
(7) The check then bearing the endorsement of Margaret O'Hara and "A. O'Hara" was deposited to the credit of Anna O'Hara's checking account with the defendant company, was collected by the latter from the trust company in the usual course of business, and was subsequently paid out by the defendant to the order of Anna O'Hara. Anna O'Hara was undoubtedly the impostor "A." All of the parties to the transaction except "A" acted in good faith and accepted Anna O'Hara as Margaret O'Hara.
(8) The conveyancers, Flood Son, believed Anna O'Hara to be Margaret O'Hara, introduced her to the title insurance company's employee as Margaret O'Hara, and the check was delivered by the title company to the conveyancers believing them to be the agents of Margaret O'Hara.
The instant case is identical in its facts with that of the Land Title and Trust Company v. Northwestern National Bank, 211 Pa. 211, and in our opinion the instant case is ruled by the case referred to.
The principle involved is stated in the annotation to the Land Title case, in 50 L.R.A. 75, as follows: "It is apparent from the foregoing cases that the drawer of a check, draft or bill of exchange, who delivers it to an impostor, supposing him to be the person whose name he has assumed, must, as against the drawee or a bona fide holder, bear the loss where the impostor obtains payment of or negotiates the same."
The principle of the Land Title Company case was approved by Market Street Title and Trust Company v. Chelten Trust Company, 296 Pa. 230, and also in the case of Commonwealth of Pennsylvania v. Globe Indemnity Company, 323 Pa. 261.
The Real Estate Land Title and Trust Company v. United Security Trust Company, 303 Pa. 273, is distinguished from the cases I have referred to on the ground "That the characteristic feature of these cases was, in the language of the Supreme Court, that the money was in fact paid to the person to whom plaintiff by its actions showed it intended the money should be paid. In these two cases the plaintiff caused a specific person to receive the check, expecting he would use it. In this case (that is the Real Estate Land Title and Trust Company v. United Security Trust Company, 303 Pa. 273), Gross was not the person to whom the plaintiff by its actions intended the money to be paid. He was not the person designated to receive the check with the expectation that he would use it."
We think therefore that the plaintiff's motion for judgment n. o. v. should be refused.
Plaintiff appealed.
Errors assigned were refusal to grant plaintiff's motion for judgment n. o. v. and entry of judgment for defendant.
Samuel Knox White, of Peck White, with him John Kline Young, for appellant.
Frederick H. Spotts and Pepper, Bodine, Stokes Schoch, for appellee, were not heard.
The judgment is affirmed on the opinion of the able President Judge of the court below, Judge FINLETTER.