
    Ernestine Noah, Respondent, v. Bank for Savings in the City of New York, Appellant.
    First Department,
    February 11, 1916.
    Banks — payment by savings bank on forged drafts—rule as to liability to depositor — erroneous charge.
    The liability of a savings bank for payments made upon forged drafts differs from that of ordinary banks of deposit which are absolutely liable for payment on forged checks no matter how skillful the forgery may be. A savings bank is not liable for payments made upon a forged draft unless negligence can be imputed to it, that is to say, unless the discrepancy between the signatures is so marked and plain that an ordinarily competent clerk exercising reasonable care should detect the forgery.
    
      Hence, in an action against a savings bank brought to recover moneys paid out by it on drafts forged by the plaintiff’s son, who had stolen her pass book, it is error to refuse to charge that if the discrepancy between the signatures on the forged drafts and the genuine signature of the plaintiff was not marked and apparent or it would require a critical examination to detect the difference, the failure on the part of the bank to discover the discrepancy is not evidence of negligence or lack of ordinary care on its part.
    It is error to charge in substance that discrepancies between the signatures might “be taken into consideration” by the jury in passing upon the question whether the defendant had exercised ordinary care, for the jury might find the defendant negligent even though the discrepancies were not marked.
    Dowling, J., dissented..
    Appeal by the defendant, Bank for Savings in the City of New York, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 23d day of February, 1915, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 5th day of March, 1915, denying defendant’s motion for a new trial made upon the minutes.
    
      Cornelius W. Wickersham, for the appellant.
    
      I. H. Lehman, for the respondent.
   Scott, J.:

This is an action by a depositor against a savings bank to recover the amount of the deposit which was paid out upon forged drafts.

On September 7,1912, plaintiff had on deposit in the defendant savings bank the sum of $2,332.79. Her son, a young man about twenty years of age, having stolen the bank book, forged his mother’s name to a draft for $300, payable to himself or bearer, and presented the draft, with the book, to defendant and received said sum of $300 which was charged against plaintiff’s account. Later he presented three other forged drafts upon which he was paid the total amount of the deposit, in each case presenting the pass book with the draft.

Upon discovery of the facts plaintiff demanded payment from the defendant, which was refused. On the trial the defendant gave evidence showing the course of procedure adopted by it when drafts were presented payable to some one other than the depositor, and there seems to be no doubt that this general course of procedure was followed in the case of each draft involved in the present action. Among the precautions taken by defendant in such a case was the comparison of the signature upon the draft with that of the depositor written at the time of opening the account, and the sole question in the case, in the last analysis, is whether or not there was such discrepancy between the forged signatures and the admittedly genuine signature of the plaintiff as to impute to defendant negligence and lack of ordinary care by reason of its failure to detect the forgery.

The rule as to the liability of savings banks for payments made upon forged drafts is well settled. It is quite different from that which applies to ordinary banks of deposit which act at their peril and are absolutely liable for payments made upon forged checks, no matter how skillful the forgery may be. In the case of savings banks, however, the rule is that the bank will not be liable for having paid upon a forged draft unless negligence can be imputed to it, that is to say, unless the discrepancy between the signatures is so marked and plain that an ordinarily competent clerk, exercising reasonable care, should detect the forgery. (Campbell v. Schenectady Savings Bank, 114 App. Div. 337; Kelley v. Buffalo Savings Bank, 180 N. Y. 171; Appleby v. Erie County Savings Bank, 62 id. 12.)

In the case at bar it was satisfactorily shown that in the case of each draft a comparison was made (not always by the same clerk) between the signatures on the draft and the depositor’s signature in the signature book. It is perhaps of some significance that although several clerks made the comparisons, they all passed the signatures on the drafts, which do not differ materially from each other, as containing genuine signatures, although to the untrained and inexperienced eye there seems to be a considerable difference between the genuine and the forged signatures. It is undoubtedly true, as has been pointed out in several reported cases, and as comports with our' general knowledge, that many depositors in savings banks are persons who seldom have occasion to write their names, have never adopted what may be called a standard signature, and whose signatures made on different occasions differ considerably. This is a matter which must necessarily be taken into account by a savings bank clerk in making a comparison of signatures. It does not necessarily follow, therefore, that the mere circumstance that the signature on a draft does not precisely resemble the signature of the depositor written in the signature book, imputes culpable negligence to the bank for having failed to detect the forgery. The first duty of the bank was to compare the signatures. This it satisfactorily appears was done. The remaining question was whether, having made the comparison, it was culpably negligent in having failed to discover that the signatures on the drafts were forged. This was the crucial question which the jury had to determine in the principal case and the defendant was entitled to have it sharply defined.

The true rule upon the subject was expressed in a request to charge submitted by defendant in the following language: “2. If the discrepancy between the signatures on the four drafts, Defendant’s Exhibits 4, 5, 6 and 7, and the admittedly genuine signatures of the plaintiff was not marked and apparent, or would require a critical examination to detect, the failure on the part of the bank to discover the discrepancy is not evidence of negligence or lack of ordinary care on its part.”

The court refused to so charge, instructing the jury that if the discrepancy between the signatures on the drafts and that of plaintiff was not marked and apparent or would require a critical examination to detect, that fact “may be taken by you into consideration in passing upon the question whether or not the defendant exercised ordinary care to prevent fraud upon the plaintiff.”

The defendant was entitled to the charge as requested, and the modified or substituted charge was erroneous, because it left it open to the jury to convict the defendant of negligence even though it may have considered that the discrepancy was not marked and apparent and would require a critical examination to detect.

This error was fundamental and we cannot overlook it. The judgment and order appealed from must, therefore, be reversed and a new trial granted, with costs to appellant to abide the event.

Clarke, P. J. Smith and Page, JJ., concurred; Dowling, J., dissented.

Judgment and order reversed and new trial ordered, costs to appellant to abide event.  