
    The Provident Savings Bank & Trust Co. v. The Fifth-Third Union Trust Co.
    (Decided May 31, 1932.)
    
      
      Messrs. Clark S Robinson, for plaintiff in error.
    
      Messrs. Maxwell & Ramsey, for defendant in error.
   Ross, P. J.

This case is presented on error from the court of common pleas of Hamilton county, wherein judgment was rendered in favor of the plaintiff in error in that court, the Fifth-Third Union Trust Company, reversing a judgment of the municipal court of Cincinnati in favor of the Provident Savings Bank & Trust Company, defendant in said municipal court, which now becomes plaintiff in error in this court.

The suit was originally brought by the Fifth-Third Union Trust Company against the Provident Savings Bank & Trust Company to recover the amount of a check paid by the Fifth-Third, and charged to its depositor, the basis of the recovery being predicated upon the allegation that the name of one of the payees upon such check was forged by the other payee, as an indorsement, and that the Fifth-Third Bank has therefore been compelled to reimburse its depositor.

The amended answer contains a general denial, and, as a second defense, declares that the Fifth-Third Bank gratuitously reimbursed its depositor, in that more than one year had elapsed after it returned to its depositor the canceled check, and within such year said depositor had not notified the Fifth-Third Bank that the indorsement was forged.

The case was tried to a jury and a verdict instructed for the defendant, the Provident Savings Bank & Trust Company, at the close of plaintiff’s evidence.

The evidence shows that the Ritz American Ice Cream Company drew a check upon the Fifth-Third Union Trust Company for $800, payable to James and Susie Eatrides, which it sent to James Eatrides. The check was paid by the Provident Savings Bank & Trust Company, stamped with, its name as an indorsement, and transmitted through the clearing house to the Fifth-Third Union Trust Company, which bank paid it and charged it to the account of the Ritz American Ice Cream Company.

This check was sent to James Eatrides as the consideration for a note and chattel mortgage which the ice cream company took from James Eatrides. The note and mortgage bore the signatures of James and Susie Eatrides, and the check, when presented to the Provident Savings Bank & Trust Company, bore their signatures as indorsers.

Some two years after the payment of the check by the Fifth-Third Union Trust Company, the note being unpaid, suit was brought to collect thereon against both James and Susie Eatrides. In her answer, Susie Eatrides alleged that her signature on the note and mortgage was a forgery, and that she had not indorsed the check. In a deposition she iterated this claim. The Fifth-Third Union Trust Company, being notified of these facts, immediately credited the account of the ice cream company with the amount of the check, demanded reimbursement, from the Provident Savings Bank under the guaranty of its indorsement, and, upon refusal of the Provident Savings Bank to pay, brought suit to collect.

The trial court based its judgment for the Provident Saving’s Bank, defendant in that court, upon the limitation of action contained in Section 11225-1, General Code. This section does not apply to the duty of depositors as to indorsements.

The duty of a depositor to know its own signature is entirely different from the duty of such depositor as to an indorsement. The depositor has a right to rely upon the implied guaranty of the bank that it has paid to the payee, just as the drawee bank has a right to rely upon the guaranty of the paying* bank, unless in any case the acts of the parties amount to an estoppel to rely upon such guaranties. But in any event the bank is only obligated to pay the loss to the depositor in one case and to the drawee bank in the other. If there has been no loss, there is no obligation to pay, either by the drawee bank or the paying bank.

What loss has the drawee bank, the Fifth-Third Union Trust Company, suffered in the instant case? It claims to have credited its depositor with the amount of the check. It can only assert such payment as a loss if it was legally forced to make good a loss to the depositor.

What loss then did the Ritz American Ice Cream Company, the depositor, suffer by reason of the forged indorsement upon the check? None. Its loss is due to the forgery upon a note and mortgage, .which prevents it from collecting from the party whose name it is claimed was forged. The loss on the note and mortgage would have been the same as it would have been had the check not been indorsed by forgery.

It is claimed that the Ice Cream Company would not have suffered loss on the note and mortgage if the paying bank had used proper care.

This is not a suit of the Ice Cream Company versus the Provident Bank for negligence. It is a suit of the Fifth-Third Bank to recover its loss by reason of the forged indorsement upon the check. We are not concerned with the loss of the Ice Cream Company through its own negligence in accepting a forged note and mortgage; or that it cannot now collect upon such note and mortgage against the responsible maker whose name was forged. What we are concerned with is the loss to the Ice Cream Company by reason of the forged indorsement upon the check, and, exclusive of the note and mortgage, putting them out of consideration, we cannot see where the Ice Cream Company has suffered any loss whatever by reason of the forged indorsement upon the check.

As far as the record shows, the position of the Ice Cream Company would be the same were the check indorsed by Susie Eatrides. The only loss evident from the record is to Susie Eatrides, who states she never received any portion of the proceeds of the check. She is not making any claim, and can make no claim, upon a check in which she had no interest and which she states she never knew existed.

The judgment of the municipal court of Cincinnati was therefore free from prejudicial error, though predicated upon a wrong premise. The court of common pleas erred in reversing the judgment of the municipal court. Its judgment will be reversed, and that of the municipal court of Cincinnati will be affirmed.

Judgment reversed.

Hamilton and Cushing, JJ., concur.  