Graham v. Southington Bank & Trust Co.

The defendant bank informed the receiver, by monthly statements of account, that his agent was not depositing these fifty-six checks to the credit of the receiver's account. About six months after the first of these accounts had been rendered, the consequent increasing discrepancy between the receiver's balance as reported by the bank, and the balance as it should have been if the checks had been deposited, amounted to $6,934, and up to that time the receiver made no response to the statements except by his apparent acquiescence in the accounts as stated. In the meantime the defendant might reasonably suppose that in the usual course of business the plaintiff was also receiving similar statements from the Merchants National Bank of New Haven accompanied by canceled checks, and was therefore informed from a second source that his agent was not depositing the checks, but was cashing them.

Because these bank statements are rendered for the very purpose of inviting criticism or acquiescence, I am of opinion that less than six months' apparent acquiescence by the receiver in the course of his agent's dealing with the defendant bank, after the defendant had a right to believe that the receiver was informed of it, is enough to confer an apparent authority on the agent to continue it.

Under the older usage of stating the account by writing up the depositor's pass-book, it was generally *Page 513 held that the depositor was bound to examine the statement within a reasonable time, and his failure to object was treated as an acquiescence in the account stated. Leather Mfrs. Nat. Bank v. Morgan, 117 U.S. 96,6 Sup. Ct. 657; L.R.A. 1915 D, 741, and cases cited in the note. By analogy, the same rule should apply to the later usage of rendering monthly statements accompanied by vouchers. It is true, as the opinion states, that the depositor was not estopped by such acquiescence from correcting the account as to errors caused by the bank's negligence, and the cases cited in the opinion apply that rule to the negligent payment by the bank of forged and raised checks; but when the bank had acted on the actual or apparent acquiescence, without negligence, to its injury, the depositor was estopped. See Leather Mfrs. Nat. Bank v. Morgan, supra. And this was so when the depositor had turned the pass-book over to an unfaithful clerk for examination and approval. Leather Mfrs. Nat.Bank v. Morgan, supra.

Applying that rule to this case, I agree that in the first instance the defendant bank was negligent in permitting Eyring to cash checks which were on their face mere transfers of funds intended for deposit. The negligence consisted in assuming from the agent's own representation that he had authority to do so for payroll purposes, without first making due inquiry of the principal.

But as each successive statement was rendered it plainly showed an increasing deficiency in the credit balance corresponding exactly in amount with the sum of certain checks properly drawn by the receiver on the Merchants National Bank of New Haven and given to Eyring for deposit in the defendant bank. They were not being deposited, and the only reasonable alternative was that Eyring was cashing them. I *Page 514 think that fact was sufficiently evident on the face of the statements rendered by the defendant, without the conclusive proof afforded by the canceled checks themselves when returned to the receiver by the Merchants National Bank.

If the defendant's statements were not self-explanatory, then I think the receiver's duty to examine them with reasonable care required him to look at the canceled checks when returned by the Merchants National Bank to see why they had not been credited to his account by the defendant.

However that may be, the question whether the defendant was continuously negligent in permitting Eyring to cash these checks depends on all the surrounding circumstances, and one important fact is that the defendant had a right to assume that the checks in question would be returned to the receiver, bearing on their face conclusive proof that Eyring had cashed them.

The extent of Eyring's authority was a matter peculiarly within the receiver's knowledge, and as the practice of cashing these checks assumed the proportions of a regular course of dealing, there came a time when the receiver's apparent acquiescence would justify an ordinarily prudent banker in believing, and in acting on the belief, that the receiver had, as Eyring claimed he had, given the agent authority to cash these checks for pay-roll purposes.

On that ground alone I dissent. *Page 515