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Central Law Journal.
case from the jury on the question of fact
as the evidence set out by the Court was ST. LOUIS, MO., APRIL 30, 1920. conflicting. On the second point respecting
plaintiff's negligence in failing to examine LIABILITY OF BANK FOR FAILING TO DE
its cancelled checks, the position of the TECT FORGERIES WHEN DEPOSITOR Court of Appeals, in sustaining the trial DOES NOT VERIFY BANK STATEMENT. court's action, raises an interesting ques
tion. The Court said: Does the fact that a depositor fails to
"When the plaintiff sent its passbook to verify his bank statement each month and
defendant to be balanced, it in effect deexamine his cancelled checks release a bank
manded to be informed as to the condition from liability for forgeries committed by
of its account, and, when the balanced passan employe? The U. S. Circuit Court of book and the vouchers were returned, the Appeals (2nd Cir.) recently held that it silence of the plaintiff respecting the redoes. Hammerschlag Mfg. Co. v. Im
turned vouchers and the entries in the pass
book amounted to an admission on its part porters and Traders Nat'l Bank, 262 Fed.
as to their correctness. The rigid responsiRep. 266. In this case it appeared that de.
bility imposed on banks must be maintained. fendant permitted its bookkeeper to make It is equally important, however, that deout all checks which were then signed by positors who make negligent examinations the vice president. Some of these checks of the accounts rendered to them by their
banks should themselves sustain the losses were payable to bearer and intended to compensate the bookkeeper for petty cash
which result from their own and not the
bank's carelessness, and which would have items. These checks, after signing, were been prevented if they themselves had exerraised by the bookkeeper to larger figures cised reasonable care. The plaintiff seeks and cashed at the bank. This practice con in this case to hold the bank responsible tinued for more than a year before it was
for the payment of checks raised by its own
employe, who was authorized by it to prefinally discovered, upon which the plaintiff
pare the checks and to obtain the money on company sought to hold the bank liable for
them, and over whose conduct no reasonpaying the checks which had been so raised. able supervision was exercised.” The bank claimed that since plaintiff cor
There are several decisions to the effect poration had made no complaint of the im
that the depositor is bound personally or proper payment of checks on receipt of its
by an authorized agent, and with due dilimonthly statements and cancelled checks,
gence, to examine the passbook and vouchdefendant was relieved of liability for
ers, and to report to the bank without unchecks paid more than a year previous to
reasonable delay any errors that may be displaintiff's demand. The trial court took the
covered ; and if he fails to do so, and the case away from the jury, first, on the ques
bank is misled to its prejudice, he cannot tion of fact, whether the alteration was dis
afterwards dispute the correctness of the coverable by reasonable care on the part balance shown by the passbook. It is also of the bank; and second, on the question of held that, if the duty of examination is law, whether plaintiff was not guilty of delegated by the depositor to the clerk guilty laches in failing to complain to the bank of the forgeries, he does not so discharge within 30 days after receipt of cancelled his duty to the bank as to relieve himself checks in accordance with the rule of the from loss. Critten v. National Bank, 171 bank. The Court of Appeals, in affirming N. Y. 219, 63 N. E. 969, 57 L. R. A. 529 ; the trial court's clecision, decided both these Leather Mnfrs. Bank v. Morgan, 117 U. questions in favor of the bank.
| S. 96, 6 Sup. Ct. 657; Meyers v. SouthIt is difficult to understand on what western Nt'l Bk., 193 Pa. i, 44 Atl. 280, ground the trial court felt bound to take the 1 74 Am. St. Rep. 672 ; Morgan v. Trust Co.,
208 N. Y. 218, 101 N. E. 871, L. R. A., that his negligence did not contribute to the 1915 D, 741; First Nat'l Bank v. Allen, 100 forgery, it is easy to understand that the Ala. 476, 14 So. Rep. 335, 27 L. R. A. Court might take the case away from the 426, 46 Am. St. Rep. 80.
jury but with the burden resting on the de
fendant this can hardly be justified. In the The Court, however, goes further in its
case of Leather Manufacturers Bank v. decision and holds that there can be no
Morgan, the Supreme Court remarked, recovery even upon checks forged prior to
that “the question of the depositor's negthe first balancing of the bank book after
ligence in examining his returned passbook the forgery. The rule in New York and
and vouchers was a question for the jury." many states makes a bank liable for forged checks paid before the balancing of the pass Moreover, as we understand the law on book although as to subsequent forgeries
such cases the bank must prove not only of the same character, they are not liable. that the negligence of plaintiff contributed The only limitation on this rule is that the
to the forgery but that the forgery itself bank shall not have lost any opportunity was of such a character as not to be easily to obtain, restitution. Critton v. National detected. For, if the bank's officers, before Bank, supra.
paying the altered checks, could, by proper Our objection to the decision of the Court
care and skill, have detected the forgeries, in the principal case is not to its statement
then it cannot receive a credit for the of the law, but because it saw fit to take
amount of those checks, even if the deposthe case from the jury. The failure of the
itor omitted all examination of his account. plaintiff to examine his checks did not, of
Leather Manufacturers' Bank v. Morgan, itself, release the bank from liability for
117 U. S. 96, 6 Sup. Ct. 657, 29 L. Ed. 811. its own negligence. The question in such
The mistake of the Court in this case is cases is a question of fact, to-wit, whether
in deciding a question of fact as a question plaintiff's failure to examine his checks was
of law. The question whether the forgery a contributing cause of the forgery. Thus
was discoverable or not by the exercise of in Leather Manufacturers Bank v. Morgan,
reasonable care and the question of the efsupra, the Supreme Court of the United
fect of plaintiff's negligence were questions States distinctly declared, that "if the de- |
which must go to the jury after plaintiff fendant's officers, before paying the altered
has made out a prima facie case by proving checks, could by proper care and skill have
that the paper paid by the bank was not its detected the forgeries, then it cannot re
paper and therefore not properly charged ceive a credit for the amount of those
to its account. checks, even if the depositor omitted all examination of his account."
In other words the question is always one for the jury, for the reason that when |
NOTES OF IMPORTANT DECISIONS. the plaintiff makes out a prima facie case of forgery (as he did in this case) the bur'en of proof is on the defendant to establish
LIABILITY OF ELECTRIC RAILWAY FOR his defense that plaintiff's negligence in fail- | INJURY TO BOY COMING IN CONTACT ing to examine his passbook contributed to | WITH LIVE TROLLEY WIRE.-Electric railthe forgery. Under such circumstances,
ways are not insurers; nor can they be re
quired to do the impossible. So long as the there is no conceivable reason why the Court
state grants permission to a street railway to should take the case from the jury and give
use overhead trolley wires for power there is judgment for defendant as a matter of law. certain to be a risk to the public against which If the burden were on the plaintiff to show | no foresight can provide. In the first place, such a wire cannot be insulated as in the case to build a home for indigent Roman Catholics. of electric light wires. In the second place, the The testatrix further declared that “my sole expense would be so great that no possible aim and desire in making the foregoing request guards could be provided that would prevent is to assist in an humble way in the founding someone somewhere along the line touching of an institution for the aged and indigent." the wire with an iron pole or throwing a wire This devise was received by the defendant in over it. That under such circumstances no lia 1898. In 1916 the plantiffs, heirs of the tesbility attaches to the railway company is the tatrix, complained that the devise had not been effect of the decision in the recent case of carried out, but were told that the devise was Adams v. Bullock, 125 N. E. 93.
not sufficient for the purpose of erecting a home
and that other money would have to be raised. In this case the plaintiff, a boy, 12 years old, The plaintiffs then brought suit alleging that was given a verdict against the defendant, re- the devise was an estate on condition subseceiver of an electric railway, because of an quent and that since the condition of the deinjury which resulted from a wire thrown over vise had not been performed, the property the railing of a bridge crossing the electric should revert to the heirs. The lower court road, coming in contact with a trolley wire. sustained a demurrer to the petition, but the In reversing the judgment of the lower court, Supreme Court reversed the decision and sent the Supreme Court called attention to the fact the .case back for trial. The Court said: that the use of an overhead trolley system was itself not so inherently dangerous as to amount
"In the present case it appears that the tes.
tatrix did not provide for a completed trust. to negligence; otherwise its franchise would be
She did not establish a trust, but rather mado defective as authorizing that which was not
a contribution toward the establishment of a lawful. Dumphy v. Montreal, etc., Co., 1907 A.
charitable trust. C. 454.
“The devise consisted of a lot with several
old houses on it. $1,000 in money was 110. Of course the highest degree of care is re vided by item 6 of the will “to assist in the quired of those who make use of such a dan. maintenance for the first year" of the home gerous agency as that of electricity. But it
projected. It was furthermore provided in the would be difficult, as the New York Count said,
will that the home be established or erected
on said lot, but no fund was provided for the to so guard a trolley wire as to prevent the
support of the home beyond the first year, possibility of an accident of the kind coming
and indeed no means were provided for the before the Court in the principal caso.
building of any home, unless it was contem
plated by the testatrix that part of the lot The great weight of authority sustains the would be sold and the proceeds of the sale used Court in its decision in this case. See Vanatta fex that purpose. We have no way of estimatV. Lancaster Co., 164 Wis. 344, 159 N. W. 940; ing the value of the lot from the record before Parker v. Charlotte R. R. Co., 169 N. C. 68, 85
us. S. E. 33; Kempf y. So. Ry. Co., 82 Wash. 263, "It is therefore apparent that she did not 144 Pac. 77, L. R. A. 1915 C, 405.
regard the devise as of sufficient value to complete her project, but that she only intended 'to assist in an humble way' in founding the institution. The testatrix undoubtedly ex
pected the trustee to procure additional funds RIGHT OF HEIRS TO LAND DEVISED FOR from other sources for this enterprise, and her PARTICULAR CHARITABLE PURPOSES,
idea obviously was to make a contribution
only. NOT CARRIED OUT BY TRUSTEE.-Is a .devise of real property to a trustee for a particular charitable purpose an estate on condition so
"Nevertheless it is manifest from the record
that the testatrix did not intend that this dethat if the trustee fails to carry out the trust
vise should be used either by Bishop Byrne or in a reasonable time, the estate will revert to
by the Catholic Church for any purpose other the heirs? It is so held by the Supreme Court
than founding the home for the aged which is of Tennessee in the recent case of Nolfe v. described. The testatrix says that the founding Byrne, 219 S. W. Rep. 1.
of this home is ‘my sole aim and desire,' and that the gift is made for the sole and only
purpose of founding a home as hereinabove In this case the testatrix devised to Rt. Rev.
stated.' Thomas S. Byrne, Bishop of Nashville, and to his successors in office a tract of about five "We are therefore of opinion that Bishop acres near the City of Memphis, upon which | Byrne took title to this property upon condi
tion subsequent. The substance of the condi- | THE WELTER OF REPORTS AND tion was that the home described be erected
COURT OPINIONS. and maintained on the lot devised, and, ac. cording to our present lights, it seems that the raising and the appropriation of additional funds for this project were necessarily contem
In 1826 Chancellor Kent estimated the plated by the maker of the will."
number of English reports, excluding those It is the general rule that conditions subse.
pertaining to admiralty, elections, settlequent are not favored in the law because of ment cases and Irish reports, at 364; and the forfeiture that results from the failure to American reports, textbooks and digests comply with the condition. In such cases the over 200. Story complained of the numcourts will, as Mr. Tiffany states, (Real Prop. ber of reports in 1831. What would he erty, p. 163), "construe language not as creat say now? In 1832, one year after Justice ing a condition, but rather as creating a trust."
Story complained of the multiplication of In Sugden on Powers (8th Ed.), page 106, the
reports, the American reports were estiauthor says that "what by the old law was
mated at 536. In 1845 it was estimated that deemed a devise upon condition would now, per
there were 1,608 American and English rehaps, in almost every case, be construed a de
ports.” On April 1, 1882, there were vise in fee upon trust, and by this construction,
2,944 American State and Federal reports instead of the heir taking advantage of the
and 1,433 English (excluding 3 series of condition broken, the cestui que trust can com
duplications), making a total of 4,377. By pel an observance of the trust by suit in
including the Irish, Scottish and British equity."
Colonial reports, the number was estimated In the Nolfe case, the trust is not for the at 5,232.3 In 1916 the number in England, benefit of an individual and there is therefore Ireland, Scotland and all the British Colno cestui que trust to enforce the trust. In
onial countries was 6,836; and in America Charitable Trusts it is usually the duty of the
9, 621; a total of 16,457. Counting the West Attorney General to enforce the trust, but in
system of reports of 1,015 volumes of that the Nolte case the Court held that the Attorney
datė, and the 914 volumes of selected cases, General would have no right to seek to enforce
there was in America alone 11,650 volumes. a trust which is not seif-executing, but which
From 1885 to 1916, a period of thirty years, to enforce would require an order on the
over 6,000 reports were published, about trustee to raise the necessary funds to carry
1,600 more volumes than had been pubout the trust. If this is the law then any de. vise toward a fund to be created is an estate
lished in America down to 1882. upon condition, and the failure to raise the
In 1914 there were published in America fund is a breach of the condition entitling the
over 150,000 printed pages of opinions. No heirs to re-enter and take the property so de
lawyer can read that many in a year; not vised.
even a law professor in a university who But how long may a trustee delay in carry.
devotes his whole time to teaching students ing out a trust. The defendant in the Nolfe
the law. No lawyer can give shelf room for case contended that he had his whole lifetime
them; and if he attempted to he and his in which to carry out the trust. That is indeed the general rule. Washburn on Real Property,
stenographer would probably be compelled $948. But the Supreme Court of Tennessee
to keep their desks out in the hall. From holds that this rule is not applicable where the
1909 to 1914, inclusive, there were printed devise is to a Bishop and his successors in 65,376 opinions in America, filling 630 office, such a devise being to a "succession in volumes. Well did a committee of the perpetuity.” In such cases the Court holds the trust must be performed in a reasonable time. (1) 16 Am. L. Rev. 320; 1 Kent Com. 474, note: See also Upington v. Archbishop Corrigan, 151 N. Y. 143, 45 N. E. 359, 37 L. R. A. 794.
(2) 16 Am. L. Rev. 430.
20 Yale L. Jr. 377.
American Bar Association say, in 1914, | tice of England, has thus stated the rule that **That the increasing volume of the reported l should control in the selection of cases for cases is a burden for which some relief | publication in that country, and it is 'applimust be found.”
cable to this country as well as to that. Reports are a necessity and cannot be
"The subject reported,” says he, "should dispensed with. The editor of Law Book
include all cases which introduce, or appear News has well said:
to introduce, a new principle or new rule, "So long as the publication of the courts or which materially modify an existing are a part of the law of the commonwealth, principle or rule, or which settle a questhey must be made accessible to the ad
tion of law on which the law is doubtful, ministrators of the law. To suppress them
or which for any other reason are pecudoes not do away with their force. It simply removes them from the light, where
liarly instructive. If these principles are they can be studied, mastered and used, to not attended to, the reports will be unmeasto the shadowy realm of uncertainties, urably bulky, and time and labor will be where they become dangerous in propor
wasted. Practically the great difficulty is tion as they have become unknown. The
to «lecide what ought to be done with cases time has passed when men can believe that safety lies in ignorance. Safety lies in
turning on the construction of written knowledge, and with every advance of the documents, and with what are called pracrace the demand is made that knowledge tice cases. As regards cases on the conshall become accurate and be used more struction of documents, they should be excomprehensively. Neither accurate nor
cluded, unless there is some good reason for comprehensive knowledge of the law would be possible without law reports. This fact
including them. Cases turning on obscure is clearly comprehended and tersely ex sentences in wills, contracts or letters, which pressed by Lord Bacon in his Advancement sorely puzzle those who have to put a meanof Learning (book 863): ‘Above all, let
ing on them, are absolutely valueless for the judgment of the supreme and the prin
future guidance, and should not be reported cipal courts be diligently and faithfully recorded; * * * for judgments are an
at all. At one time there was a tendency, chors of the law, as laws are the anchors of
especially in the Chancery Courts, to try the state.' ”4
and construe one will by means of decisions What is the relief ? Several suggestions
on other wills more or less like it; but the have been made, none of which has met tendency has been checked of late years, with universal approval. One is that only
and there is not now any excuse for reportselected opinions be published, when no
ing decisions on wills simply because they constitutional or statutory provision is in
are difficult to construe. Similar observathe way of the pursuit of that course. Such
tions apply to other documents.”5 is the course in England where a committee But there are difficulties in the way of of lawyers appointed for that purpose make the selection of cases. If the Court makes the selection. Another is that the Court the selection then there will be a trading of itself direct what shall be published. And opinions in all likelihood, just like it is still another that the official reporters make sometimes rumored that one judge proposes the selection. Publishing only selected to another “If you will vote the way I want cases would greatly reduce the number of
to decide the case I have in hand, I will reports.
vote for the way you want to decide the What rule should be pursued in making case you have in hand.” No judge will the selection of cases to be published ? Lord vote to suppress his fellow judge's opinion Justice Lindley, of the High Court of Jus- when the latter wants it published because
(4) 1 Law Book News 162.
Lord Justice Lindley, 19 Irish L. T. 217.