
    Weisser’s Administrators against Denison, President of the North River Bank.
    Bankers are presumed to know the signatures of their customers, and they pay checks purporting to he drawn hy them at their peril.
    A depositor owes the bank no duty which requires him to examine his passbook or vouchers, with a view to the detection of forgeries of his name.
    
      ji A principal is bound by the acts of his agent only so far as the agent is acting xV“ in the course of his employment.
    Where checks forged by the confidential clerk of the depositor were paid by the bank, charged to the depositor in his pass-book, the book balanced, and, with the forged vouchers, among others, returned to the clerk, who examined the account at the request of the principal, and reported it correct, and the principal did not discover the forgeries until several months after-wards, -when he immediately made them known to the bank; it was Held, in an action to recover the balance of the deposit, that the bank could not retain the amount of the forged checks.
    A new trial was ordered by the court below, unless the plaintiff should consent to the reduction of the judgment rendered at special term to a specified sum; the plaintiff consented, and perfected judgment for the reduced amount, and the defendant appealed from such judgment. The record not showing what items the general term rejected, was erroneous, by reason of the uncertainty; but it appearing that the original judgment was correct and its reduction an error, it was Held that the reduced judgment could not be reversed, nor the error corrected on the defendant’s appeal.
    T-his action was brought in the superior court of the city of New-York to recover an alleged balance of account arising from deposits made by the intestate in the North River Bank, a banking association in the city of New-York. The plaintiffs claimed a balance of $1739.70 ; and the defendant admitted that there was in the bank to the credit of the intestate, at the time of his death, the sum of $1150.50. The intestate, in his lifetime, kept an account with the defendant, and, between January, 1838, and his death in August, 1849, had deposited different sums of money, amounting in the aggregate to $296,601.86 ; and the bank had paid out, upon checks pui-porting to have been drawn by him, $295,451.36. Of the sum thus paid, $589.20 had been paid upon checks forged by one Harlin, a clerk of the intestate, at different times, from February, 1848, to August, 1849. During this time, the bank-book of the intestate had been written up and balanced by the bank several times, and the amounts paid upon forged checks debited thereon, and the book with the vouchers returned to him. Harlin, the forger, was a confidential clerk of the intestate, transacting much of his business with the bank, and receiving from the bank in every instance, with a single exception, the bank-book when balanced, and the canceled vouchers, and on his return comparing the checks returned with the check-book of the intestate, and reporting to his principal that all was right. He abstracted the forged checks from the vouchers returned, and after the discovery of his offence and his flight, the checks which were in controversy in this action were found in his trunk with the bank mark upon them.
    Upon the trial before Mr. Justice Dube, in February, 1851, after proof of the foregoing facts, the jury was charged that if they found that the signatures of the fifty-one checks alleged to have been forged were not in the handwriting of the intestate nor originally drawn by his authority, they should find for the plaintiffs, as well the amount of the forged checks as of the balance admitted to be due. The defendant’s counsel excepted to this charge, and the jury rendered a verdict for the whole sum claimed, amounting, with interest, to $1896.99. For this sum, with costs, judgment was perfected against the defendant. The court, at general term, modified this judgment by reducing the amount of the recovery to the amount admitted to be due, together with the amount paid upon the forged' checks, twenty-one in number, prior to the time when the bank-book was first balanced and returned with the amount paid upon forged checks debited thereon. A new trial was ordered, unless the plaintiffs should consent to this modification. The plaintiffs assented to the reduction required, and perfected judgment for the reduced amount. From this judgment the defendant appealed to this court.
    
      N. Hill, Jr., for the appellant.
    I. The court below held that the judgment entered at the special term was erroneous, and yet refused to grant a new trial. This was wrong, the judgment being entire as to the damages, and the question arising on bill of exceptions. 1. It is only where a judgment is for distinct or different things, e. g., damages and costs, that a court has power to sever it on error or bill of exceptions. ( Sheldon v. Qtiinlen, 5 Hill, 441; Dixon v. Pierce, 1 Root, 138 ; Welles v. Fowler, Kirby, 236; Richards v. Walton, 12 John., 434; Bradshaw v. Callighan, 8 John., 558, 565, 6; Frederick v. Lookup, 4 Burr., 2018 ; Davis v. Campbell, 1 Ired., 482.) 2. The Code has not changed the former rule on this subject, so far as the right to sever entire damages on appeal is concerned. (Code of 1849, §§ 12, 330; Voorhies1 Code, %% 12, 330, ed. Í853; Sheldon v. Quinlen, supra.) 3. Even if a severance of entire damages was allowable, the record furnished no means of distinguishing between the different items, and, as there was conceded error, the judgment should have been reversed in toto. (Cases cited supra.)
    
    H. The plaintiffs are not entitled to recover the amount of the twenty-one checks, nor interest thereon, by reason of Weisser’s neglecting to examine them and to return them to the bank after they had been charged to him on account in his bank pass-book, and sent to him therewith from the bank, and opportunity had by examination and comparison to detect the forgeries. Weisser had knowledge, or the means of acquiring knowledge, whether any of such checks so charged and returned were forgeries. He adopted them as his own by neglecting either to return them to the bank or to notify the bank that they were forgeries. A payment made on general account to a party in mercantile paper (notes or checks), purporting to be drawn by such party, which paper is received by him as cash, though afterwards discovered to be forged, is a good payment. (U. S. Bank v. Bank of Georgia, 10 Wheat., 333, and cases cited; Gloucester Bank v. Salem Bank, 17 Mass., 33.)
    IH. Even if Weisser was ignorant of Harlin’s fraud, he is liable for it, and should bear the loss occasioned by it, because it arose from Weisser’s entrusting Harlin with his business at the bank, and employing Harlin to act there for him and in Ms stead. Employment in such cases is not only the evidence of the authority, but the authority itself; and if one of two innocent parties must suffer by the fraud of a third, he who enables that third person to commit the fraud should be the sufferer. (Smith’s Mercantile Law, 111, 133 ; Barber v. Gingell, 3 Esp. Cas., 60; Raughton v. Ewbank, 4 Camp., 88; Watkins v. Vince, 2 Stark., 368; Dunlap’s Paley’s Agency, 172.)
    IV. The balancing and returning the bank pass-book with the checks, by the bank, and their being kept without objection by Weisser, was a settlement or stating of accounts between them, which cannot be opened on the ground of mistake, because made through Weisser’s negligence; and he cannot set up Ms own negligence to the injury of another to excuse a mistake so as to open an account. (Skyring v. Greenwood, 4 Barn. § Cress., 281; Philips v. Belden, 2 Edw. Ch. R., 1.)
    V. An authority may be presumed from employment, and adoption may be by mere acquiescence or silence. (Lawrence v. Taylor, 5 Hill, 114; Ward v. Ewans, 2 Salk., 442; S. C., 2 Raym., 928 ; Williams v. Mitchell, 17 Mass., 98 ; Story on Agency, §§ 234-260.)
    
      Edward Sandford for the respondents.
    I. The plaintiffs were not precluded from recovering the amount of money deposited by Weisser with the defendant, for which the defendant delivered to Harlin nineteen forged checks on the 19th of May, 1848. 1. It was not proved on the trial by whom these nineteen checks were forged. The only issue of fact which the defendant made respecting them was, whether they were not severally signed by Weisser. 2. If the evidence justified the assumption that these forgeries were committed by Harlin, the book-keeper and bank clerk of Weisser, they were crimes committed by him for which Weisser was not responsible. ( Vanderbilt v. Richmond 
      
      Turnpike Company, 2 Comet., 479; Paley on Agency [Dunlap], 303, 306 ; Schmidt v. Blood, 9 Wend., 268, 271.) 3. Harlin, if the forger, had no more authority from Weisser to ratify his crimes than he had to commit them. The concealment of the evidences of his forgeries, by abstracting his forged checks, and reporting to Weisser that the balance was correct, was but a part of and in further execution of his criminal designs. He was not, in any part of this business, doing any act which Weisser had either expressly or impliedly directed him to perform. ( Vanderbilt v. The Richmond Turnpike Company, 2 Comet., 479 ; Manhattan Company v. Lydig, 4 John., 377, 384, 388; McManus v. Crickett, 1 East, 106; Wilson v. Peverly, 2 N. Hamp., 548, 550; Foster v. The Essex Bank, 17 Mass., 479, 498, 508, 510, 11.) 4. The ratification of an act, previously unauthorized, must be, in order to bind the principal, wifch a full knowledge of all the material facts. If they be either suppressed or unknown, the ratification is invalid, because it is founded on mistake or fraud. (Paley on Agency [Dunlap], 172, note 9; Owings v. Hull, 9 Peters, 607; Davidson v. Stanley, 2 Man. fy Gr., 721.)
    II. Weisser was not chargeable by the bank with the nineteen checks forged by Harlin and paid by the bank, on the ground that the bank had afterwards charged the forged checks in his pass-book, and returned them to Harlin with Weisser’s checks, and that he therefore had an opportunity to ascertain their genuineness. 1. If he had been shown each of the checks, and had by mistake admitted at the time that they were genuine, such an admission would be no more than prima facie evidence, and would not have estopped Weisser from afterwards showing them to be forgeries. (Hall v. Huse, 10 Mass., 40 ; Salem Bank v. Gloucester Bank, 17 id., 1,26,27,29; Canal Bank v. Bank of Albany, 1 Hill, 287,289 ; Barber v. Gingell, 3 Esp., 60, 61; Dczell v. Odell, 3 Hill, 215; Pickard v. Sears, 6 Adol. Sp Ell., 469; Leach v. Buchanan, 4 Esp., 226.) 2. Each of the nineteen forged checks was paid by the bank, without any authority from or any fault on the part of Weisser, and the bank was liable to him for the money he had deposited and had not withdrawn. It is the duty of the banker to be acquainted with his customers’ handwriting, and if he pays upon an order which is not genuine he must suffer. (Hall v. Fuller, 5 Barn. & Cress., 750.) 3. The bank had no claim against any person, other than the forger, for the money paid by them on either of the nineteen checks. There were no other parties to either of them. There is no evidence by whom they were presented or to whom they were paid. If paid to any persons other than the forger, the bank had no valid claim to recover back the money so paid from such other persons. (Price v. Neale, 3 Burr., 1354; Smith v. Mercer, 6 Taunt., 76, 78; U. S. Bank v. The Bank of Georgia, 10 Wheat., 333, 353, 55; Canal Bank v. Bank of Albany, 1 Hill, 287, 89, 90; Goddard V. Merchants’ Bank, 4 Comst., 147, 149, 152; Bank of Commerce v. Union Bank, 3 Comst., 230, 35.) 4. The bank was guilty of negligence in paying the forged checks. It was incumbent upon them to ascertain that they were genuine before they paid them. They thereby sustained a loss. Weisser had done no act to mislead them. The bank had given an appearance of authenticity to the checks, by then’ payment, calculated to mislead him, and there is no reason to throw off the loss from one innocent man to another innocent man. (Price v. Neale, supra; Smith v. Mercer, 6 Taunt., 76, 84, 87; Chitty on Bills, 463, 4, ed. of 1839.) 5. The greater negligence being chargeable to the bank, who paid the checks to the perpetrator of the forgery, they cannot retain the money which Weisser deposited with them on the ground of delay in detecting the forgery and giving notice of it, notice having been given as soon as the forgeries were discovered. (Bank of Commerce v. Union Bank, 3 Comst., 230, 236.) 6. This is not an action to recover back money paid by mistake. It is an action to recover moneys received by defendant, which have never been paid at all. The stated account was mere evidence of payment open to explanation, like a receipt or any other admission, which had not changed the position of the parties. (Manhattan Company v. Lydig, 4 John., 377, 389 ; Bruce v. Bruce, 5 Taunt., 495; Philips v. Belden, 2 Edw. Ch. R., 1, 14, 18 ; Brownell v. Brownell, 2 Bro. Ch. C., 62 ; Kinsman v. Barker, 14 Vesey, 579 ; Bullock v. Boyd, 2 Edw. Ch. R., 293, 295; Barrow v. Rhinelander, 1 Jo/tra. C/¿.- 12., 550-557; Perkins v. llarí, 11 Wheat., 237, 256; 1 Story Eq. Jur., % 523, 528, 9.)
   Allen, J.

But there was no settlement with the bank except such as resulted from the acquiescence of the plaintiffs’ intestate in the account by his silence. The examination of the account by Harlin was not a transaction with the bank, or in which they had any interest or of which they had any knowledge. It was a matter between Weisser and his clerk for the information of the former, and whether faithfully or honestly done is not material to the defendant. Weisser did not obtain the desired information, but is in no worse situation, and the defendant is in no better, than if no examination had been attempted, and in such case it would not have been claimed that he would have been concluded by the account and his omission to examine it. The business was, in truth, transacted in the usual and ordinary way, and no negligence can attach to Weisser in the premises. In The Manhattan Company v. Lydig (4 John., 377), a book-keeper in the bank, having charge of the ledger and whose business it was to copy entries from the teller’s cash-book, received money from a customer to deposit, entered the account in the ledger and afterwards in the dealer’s cash-book,' but embezzled the money. The bank-book of the dealer was balanced and settled three times, twice by the dishonest book-keeper and once by another clerk, after the credits had been entered .therein and before the fraud was discovered, although a critical examination of the books of the bank would have disclosed the fraud at any time. It was held that the bank was not liable, but that the depositor must suffer the loss, and that there was no want of diligence on the part of the bank. If a settlement with the defendant can be predicated upon the act of Harlin in examining the bank-book of Weisser, then the bank, in the case cited, should have been concluded by the acts of its clerks in stating the account with its customers. Mere lapse of time in the abstract, however long, will not bar the right of the party to allege the forgery, provided he does it within a reasonable time after it is discovered. (Canal Bank v. Bank of Albany, 1 Hill, 287.) Lapse of time between the payment of the checks and the discovery of the forgeries is all there is upon which the defendant can rely in this action, and that cannot avail him as a defence to the action. I see no reason why the judgment of the supreme court at the trial term, for the full amount of the verdict, should not have been affirmed; and as the relinquishment of a part of the verdict by the plaintiffs, the whole of which they were entitled to retain, whether done upon their own motion or otherwise, cannot prejudice the defendant, the judgment below should -be affirmed.

Johnson, J.

The plaintiffs had a verdict on the trial for $1896.99. Upon the defendant’s appeal to the general term of the superior court, in which the suit was pending, a new trial was ordered unless the plaintiffs would consent that the damages should be reduced to $1885.50; upon such consent, a new trial was to be denied without costs of the appeal. The plaintiffs consented to the deduction, and a new trial was accordingly denied. The defendant has appealed to this court, and now insists that, as the general term decided that an error had been committed upon the trial, and the case was there upon a bill of exceptions, and the damages were assessed generally, the court were bound to grant a new trial absolutely. The record affords no means by which we could determine what grounds or what data were adopted by the court below in fixing the amount of the deduction to which the plaintiffs were required to consent to avoid a new trial; and we should probably feel compelled on this ground alone to order a new trial, had not the plaintiffs furnished a complete answer to the objection, by maintaining, as we think they have successfully maintained, that the ruling of the court below, at the trial, was correct. Weisser, the plaintiffs’ intestate, had for a long period kept a bank account with the defendant. Between the 28th of January, 1838, and the time of his death, the 28th of August, 1849, he had deposited with the bank, to his own credit, and received credit for $296,601.86. During the same period, the bank had paid out, upon checks purporting to be signed by him, $295,451.36. Of these checks, which were several hundred in number, fifty-one, amounting in all to $589.20, were not signed by Weisser or by his procuration, but were forgeries of his name. If the case stopped here, the plaintiffs would clearly be entitled to recover the whole amount claimed. (Hall v. Fuller, 5 Barn. & Cress., 750.) It, however, further appears that, during the period above mentioned, Weisser’s bank-book was several times written up and balanced by the bank; that on each of those occasions all the checks which the bank had paid, as drawn by Weisser, were charged to him in his bank-book, and that all such checks, as well the forged chécks as the genuine, were returned with the balanced bank-book. All Weisser’s bank business was transacted by his clerk, one Harlin, who, on each of the occasions referred to, received the balanced bank-book and the returned checks from the bank. It likewise appeared that Weisser did not examine the returned checks and the statement of the accounts, as shown in the balanced bankbook, but directed Harlin to make such examination, and that attending to that part of Weisser’s business was in the course of Harlin’s regular employment. It appeared that twelve of the forged checks were paid to other banks, by which they were presented, and it did not appear to whom any of the other forged checks were paid. The forgeries were committed by Harlin, in whom Weisser reposed entire confidence. As soon as Weisser discovered that there was something wrong about his bank account, he communicated it to the bank, as he did also the fact that forgeries had been committed, as soon as he discovered them. Upon the discovery of the forgeries,' Harlin absconded, and the fifty-one forged checks were found in his trunk at his rooms. None of them were entered in Weisser’s check-book, Upon this state of facts, the defendant insisted at the trial that Weisser, by neglecting to examine the checks and bank account upon the return of the bank-book, written up and balanced by the bank, had adopted the checks as his own, and that by reason of his negligence in that respect the plaintiffs could not recover from the bank the amount of the forged checks.

The plaintiffs’ case may be considered: First, as to those checks which were paid prior to the first balancing of the bank-book and return of checks; and, Secondly, as to the checks afterwards presented and paid. As to the first class of checks, the plaintiffs have shown the money of their intestate in the defendant’s hands; and the defendant, in discharge of that liability, wholly fails to show any order or authority of Weisser to make payment upon the checks in question. They were not instruments upon which, even if genuine, the bank could ever have maintained any action against Weisser. They did not, upon their face, import any obligation from Weisser to the bank. When they were returned to him they were not presented to him for payment, for they did not import any promise by him to pay, but as vouchers for payments already made and charged to Weisser in the bank-book. The entry of debits for payments made in a bank-book and striking a balance is undoubtedly a statement of the account, and the delivery of it to the dealer and his retention of it without objection, as in other cases of accounts rendered, gives to this statement of accounts the character of a stated account. But a stated account is liable to be opened by evidence of fraud or of mistake; and when the payments represented by the checks in question were sworn by Weisser’s representatives not to have been made to him or by his order or authority, the proof of payment afforded by the stated account was overthrown and Weisser’s right to the money remained unaffected. The second class of checks are subject to precisely the same observations; and as to the amount claimed by the defendant on account of the payment of them, the defendant cannot retain it unless a right has accrued to the defendant from Weisser’s not having detected the forged checks returned upon the earlier balancings of his bankbook under the circumstances before stated. That these do not amount to a ratification of Harlin’s forging his name is plain, for there can, ordinarily, be no ratification of that of which a party is ignorant.' Ratification implies at least a knowledge that there is or may be something to ratify. The circumstances must then have effect, if they have any effect, upon the ground of negligence in a duty which he owed to the bank, whereby they have been misled and induced to pay the checks in question. The most which can reasonably be said is, that if Weisser had detected the forgeries and communicated the fact to the bank upon the return of the checks upon the first balance of his bankbook, the bank would have been stimulated to increased vigilance in the discharge of a duty which they owed, not to Weisser but to themselves, for it was not Weisser’s money which they-paid" out but their own. They were indebted to Weisser generally for money in their hands, and they could only discharge that indebtedness by payment to him or by his authority. The duty and the risk of ascertaining, when they were about to pay out money, that it was being paid upon competent authority, was upon them, just as in all other cases it is upon a debtor to see to it that he pays his creditor and not some one else without the creditor’s authority. Upon the mere ground of the forgery there was no more propriety in charging the money paid to Weisser than if anybody else’s name had been forged, or than if payments on some one else’s genuine checks had been charged to him.

The defendant’s proposition, when closely examined, is not that Weisser has done anything which facilitated or contributed to a fraud upon the bank, but that he has omitted to do that which, if he had done it, would have enabled him to put them on their guard against frauds with which the connection of his name was only an accidental circumstance, to which no act of his had in any degree contributed, and against which he was under no peculiar obligation to guard them. Whatever loss the bank has sustained it has suffered from its own negligence or want of skill in a matter as to which, in the first instance, it and it only was bound to exercise skill and diligence. To this loss no act of Weisser has contributed. He was guilty of no bad faith. He has violated no duty which he owed to the bank and is in no way responsible. (Manhattan Company v. Lydig, 4 John., 377; Smith v. Mercer, 6 Taunt., 76; Young v. Grote, 4 Bing., 253; Johnson v. Windle, 3 Bing. N. C., 225; Bank of Commerce v. Union Bank, 3 Comst., 230; Canal Bank v. Bank of Albany, 1 Hill, 287.) He had a right to assume that the bank had discharged its own duty to itself (if indeed he was bound to make any assumption upon the subject), and was not bound to conceive it possible that the bank had charged him with money which had not been paid upon his order. He was under no contract with the bank to examine with diligence his returned checks and bankbook. In contemplation of law the book was balanced and the checks returned for his protection, not for theirs, and when he failed to examine it the whole consequence was that the burthen of proof was shifted. He became bound to show that the account was wrongly -stated. This right he preserved so long as his claim was not barred by the statute of limitations. The case completely negatives any imputation of participation by Weisser in the fraud perpetrated upon the bank. That would have introduced a new element into the case and would have led to a different result.

All the judges concurred.

Judgment affirmed.  