Ladd v. Androscoggin County Savings Bank

Savings Bank Deposit. Lost Book. Notice. Negligence. Forged Order. By-Laws. Contracts. The contract between a savings bank and its depositors, in the absence of any by-law or regulation limiting the bank’s liability, is the ordinary one of debtor and creditor. Where payments are made by the officers of a savings bank on orders purporting to be signed by a depositor, but in fact forgeries, accompanied by the deposit book, of the loss of which the bank has not been notified, no question of negligence, either of the depositor or the bank, is involved in a suit by the depositor to recover his money, in the absence of any regulation requiring notice of the loss of the book.

On report. Assumpsit to recover a savings bank deposit, the amount of which had been previously paid by the officers of the defendant bank to the American Express Co., acting innocently for a forger who had fraudulently obtained possession of plaintiff's deposit book. Tlie only provisions of the bank’s by-laws having any bearing upon the case were as follows:— “WITHDRAWAL OK KUNDS. Money deposited may be withdrawn, in whole or in part, by the depositor, or by any other person duly authorized, at any time without notice, when there are funds on hand unappropriated. As a rule, however, no payment above five hundred dollars will be made in the months of May or November, without previous legal notice from the depositor; and the Treasurer may, if the interests of the Bank demand it, at any time require depositors to give the notice provided by the law of the State and the By-Laws of the Bank. When depositors cannot appear at the Bank in person, to withdraw their deposits, they will be paid on their written order, properly witnessed, a form of which is given in this book. The order must always be accompanied by the Deposit Book. DEPOSIT BOOKS. All deposits are entered in the Books of the corporation, and a Bank-Book given to each depositor, in which every deposit made and every sum withdrawn will be entered. This book will be the voucher and the evidence of the depositor’s property in the institution, and of the same validity as a note of hand. Applications for withdrawal of funds, whether in person or by order, must always be accompanied by the Deposit Book.” When the plaintiff’s deposit was made he employed a messenger for • that purpose, to whom the bank officers delivered the deposit book containing the regulations. While it is true that ordinarily the drawee of an order must satisfy himself of the genuineness of the signature of the drawer, we have in this case the element of the production of the book which is made the evidence of the property. Its production warrants the bank in assuming that the possessor is the depositor and the possession by the drawee of an oi'der gives currency to the order, there being no suspicious circumstances connected with the transaction. The book was carried back to the plaintiff containing the regulations printed therein, which he says he read, and he allowed his money to stay there. He was bound by these regulations as a part of his contract. Gifford v. Rutland Savings Bank, 63 Vt. 108, 11 L. R. A. 794; Heath v. Portsmouth Savings Bank, 46 N. H. 78, 88 Am. Dec. 194; Wall v. Provident Savings Inst., 3 Allen, 96, 6 Allen, 320; Reinstein v. Watts, 84 Maine, 139. These regulations specified that the book should be the evidence of his property in the bank, and they also require the production of the book for any payment to the depositor or on his order. The plaintiff’s own carelessness, or stupidity made possible the state of facts which actually exist. He kept these books in a trunk, locked, it is true, but with the key in easy access of any one familiar with his habits and surroundings. The inmates of the house knew he had these books. For years there was probably no hour of the day when a person who had this knowledge and could gain access to the house, could not have taken the key from Ladd’s room, or from his clothing in the closet, .opened the trunk and taken the books. As a matter of fact it would appear that a brother of the mistress of the house did do it, not once but several times and probably, from his connection with the family, was able to get the check cashed by Mr. Benjamin, the cashier of the village bank, whom Ladd says he had known for years. The first order was presented on December 2, 1895, but Ladd did not discover the loss of the book until August 4, 1901. It may be said that the book was probably replaced and was actually in the trunk until August, 1900, when it was removed a second time. This may be true, but Ladd doesn’t know whether it is or not. Had he taken the trouble to look at his book for once during all the years which elapsed between December 2, 1895, and September 1, 1900, he would have discovered either the loss of the book or the payment of the first order, and thereby have prevented the thief from obtaining the second payment. Had he sent the book to the bank, for the addition of dividends and comparison of the deposit at any time during these years, as common prudence dictated that he should, the same result would have been reached. It would be difficult to find a case where the rale, that when one of two innocent parties must bear a loss it shall be the one by whose carelessness it was made possible, could be more equitably applied. “ Where a loss which must be borne by one of two parties alike innocent of the forgery, can be traced to the neglect or fault of either, it is reasonable that it should be borne by him, even if innocent of any intentional fraud, through whose means it lias succeeded.” Gloucester Bank v. Salem Bank, 17 Mass. 33; Danvers Bank v. Salem Bank, 151 Mass. 280, 21 Am. St. Rep. 450; First National Bank of Crawfordsville v. First National Bank of Lafayette, 4 Ind. App. 355, 51 Am. St. Rep. 221.