NATIONWIDE HOMES OF RALEIGH, N. C., INC.
v.
FIRST-CITIZENS BANK & TRUST COMPANY, and Eloise M. Currin, Administratrix of the Estate of S. T. Currin, Jr., Deceased.
No. 519.
Supreme Court of North Carolina.
June 16, 1966.*696 Mordecai, Mills & Parker, Raleigh, for defendant appellant.
Yarborough, Blanchard, Tucker & Yarborough, Raleigh, for plaintiff appellee.
LAKE, Justice.
The principal contention of the Bank is that the plaintiff, on or about 28 December 1961, at which time its regional manager discovered the existence of the bank account and the checks paid prior to that time, did not notify the Bank that the checks were forgeries but merely notified the Bank that the account was unauthorized and the signature of Coleman upon the signature card was a forgery. It contends that, though the plaintiff received the bank statement for December on or before 10 January 1962, and, therefore, on that date had possession of all cancelled checks, the plaintiff did not make demand upon the *697 Bank for re-crediting to his account the amount of such checks, less the credit above mentioned, until 29 March 1962, at which time the plaintiff delivered to the Bank an itemized list of the checks paid by the Bank and charged to the account, together with a statement of the credits acknowledged by the plaintiff to be due the Bank. For this reason the Bank contends that the plaintiff is barred from any right of recovery by G.S. § 53-52, which reads as follows:
"Forged check, payment of.No bank shall be liable to a depositor for payment by it of a forged check or other order to pay money unless within sixty days after the receipt of such voucher by the depositor he shall notify the bank that such check or order so paid is forged."
When funds were deposited in the defendant Bank for credit to an account opened, and later carried on its books, in the name of the plaintiff, a relation of debtor and creditor between the Bank and the plaintiff was thereby created. The Bank has the burden of proving that it paid the debt when it relies upon payment as a defense to an action for the collection of it. Nothing else appearing, it is not sufficient for the Bank to show simply that it made a debit entry upon the account. It must show that it had authority from the creditor to make such entry or that the creditor is estopped or otherwise barred from asserting the Bank's lack of authority for the making of such entry. Schwabenton v. Security National Bank of Greensboro, 251 N.C. 655, 111 S.E.2d 856.
Here, it is admitted in the answer that "the sum of $13,956.45 was deposited in the defendant Bank in an account in the name of Nationwide Homes of Raleigh, N. C., Inc." Upon the former appeal in this action, Nationwide Homes of Raleigh, N. C., Inc. v. First-Citizens Bank & Trust Co., 262 N.C. 79, 136 S.E.2d 202, Rodman, J., speaking for the Court, said:
"The admission that funds were deposited with defendant in plaintiff's name placed the burden on it to show payment of the debt so created. * * * Here the stipulation that Currin forged the checks negates express authority to draw on the bank account; * * * The mere fact that an agent makes deposits to the credit of his principal is not of itself sufficient to imply authority to draw checks on the account. * * * The burden was on defendant to show plaintiff's recognition of Currin's authority to write checks."
The trial judge found as a fact that all disbursements charged to this account were "by checks signed by Currin, which checks were unauthorized by and unknown to the plaintiff or to the parent corporation." He also found as facts that throughout the existence of this account the Bank was not aware "of any business of the said Currin or of the extent of Currin's practices, was unaware of any business of the plaintiff corporation, and made no effort to acquaint itself with either," and "that the defendant Bank had no notice of Currin's having described himself as general manager of plaintiff's local office." These findings of fact are supportted by evidence in the record. Furthermore, the record does not disclose any exception by the defendant to any of them. For both of these reasons, the findings have the same effect as a verdict of a jury and are conclusive upon appeal. City of Goldsboro v. Atlantic Coast Line R. R., 246 N.C. 101, 97 S.E.2d 486; St. George v. Hanson, 239 N.C. 259, 78 S.E.2d 885; Town of Burnsville v. Boone, 231 N.C. 577, 58 S.E.2d 351; Buchanan v. Clark, 164 N.C. 56, 80 S.E. 424.
The parties stipulated "that all checks drawn on the subject account are forgeries committed by S. T. Currin, Jr. and are not checks or drafts by the plaintiff."
It being thus clearly established that the relation of debtor and creditor existed, and that the payments by the Bank were *698 upon checks drawn by Currin with neither express, implied nor apparent authority, such payments are not a defense to the claim of the plaintiff unless they are made so by G.S. § 53-52.
In Moore v. Humphrey, 247 N.C. 423, 101 S.E.2d 460, Bobbitt, J., speaking for the Court, said:
"Where facts are stipulated, they are deemed established as fully as if determined by the verdict of a jury. * * * A stipulation is a judicial admission. As such, `It is binding in every sense, preventing the party who makes it from introducing evidence to dispute it, and relieving the opponent from the necessity of producing evidence to establish the admitted fact.' Stansbury, North Carolina Evidence, sec. 166."
We need not consider in the present case the interesting question of whether the court is bound by a conclusion of law incorporated into a stipulation of the parties, where the record contains findings of fact, supported by evidence, casting doubt upon the correctness of such conclusion. Nor do we need, in this instance, to determine whether a check signed in the name of the depositor by one who claims to be an agent, but who has no authority to draw such checks, is a forgery within the meaning of G.S. § 53-52. In State v. Lamb, 198 N.C. 423, 152 S.E. 154, Adams, J., speaking for the Court, said, "[S]igning as the agent of another, without authority, does not constitute forgery." See, however, Peoples Bank & Trust Co. v. Fidelity and Casualty Co. of New York, 231 N.C. 510, 57 S.E.2d 809, 15 A.L.R. 2d 996.
If the checks signed by Currin, without authority from the plaintiff, were not forgeries, G.S. § 53-52 has no application and affords to the defendant no defense to the claim of the plaintiff.
If these checks were forgeries, within the meaning of that statute, the defense of the statute is not available to the defendant because the plaintiff gave notice to the defendant Bank within the time provided by the statute.
In Schwabenton v. Security National Bank of Greensboro, supra, this Court said, "The burden is on the bank seeking the protection afforded by this statute to show delivery of the voucher to the depositor more than sixty days before the claim is made." In that case, it was also held that the mailing of a bank statement, with cancelled checks, and the acceptance thereof from the Post Office by the depositor "in person or through his authorized agent," constituted a receipt by the depositor of such documents within the meaning of the statute, and that the depositor's failure to give the required notice to the bank, within the specified time thereafter, would bar his right of recovery even though the "authorized agent" so receiving the bank statement was the forger and, again, was unfaithful to his trust by concealing the voucher from the depositor.
In the present case, it is argued that Currin received some of the statements and cancelled checks relating to this account prior to 28 December 1961. Assuming that the evidence would be sufficient to support a finding that Currin did so receive the statements and cancelled checks, the evidence conclusively shows that the plaintiff was not aware of the existence of this account. Currin was not authorized by the plaintiff to open the account, to draw checks on it or to receive and examine bank statements pertaining to it. Therefore, the rule of the Schwabenton case, as to when the depositor received the cancelled checks, does not apply to the present situation. Thus, the conclusion of the trial judge that the plaintiff did not receive the vouchers and statements until on or about 28 December 1961 is supported by findings of fact which, in turn, are supported by evidence.
Immediately upon the discovery of the existence of the bank account, through its discovery of the statements and *699 checks so returned by the defendant to Currin, the plaintiff notified the defendant Bank that the account was unauthorized and that the purported signature of its secretary, Coleman, upon the card with which the account was opened, was a forgery. G.S. § 53-52 does not require notice in any specified form. It is sufficient that within the time allowed by the statute the depositor gives to the bank notice sufficient in content to advise the bank that the debits charged to the depositor's account are based upon checks which are "forged." Notice to the bank that the entire account is unauthorized and unknown to the person in whose name it is opened necessarily advises the bank that any check charged thereto, which check purports to be drawn in the name of such account holder was drawn without authority and with fraudulent intenta forgery within the contemplation of the stipulation in this record. Consequently, there was no error in the conclusion of the trial court that notice to the defendant Bank "of the forged and unauthorized account and checks was given on or about December 28, 1961, in accordance with G.S. Sec. 53-52." The defendant having been given the notice required by the statute, there was no error in the court's conclusion that "none of the plaintiff's claim is barred."
Neither the plaintiff nor its parent corporation was put on notice of the existence of the account in the defendant Bank by reason of the fact that a check, drawn by the parent, payable to one A. L. Franklin, was first endorsed by Franklin and thereafter endorsed by Currin for deposit into the account in question. There is no duty upon the depositor to examine endorsements upon his genuine checks. 10 Am.Jur.2d, Banks, § 513. There is no evidence that the plaintiff did, in fact, observe the endorsements upon this check and thereby learn of the unauthorized account. There was no error in the court's conclusion with respect to this matter.
It appears from the record that the judgment was signed, by consent, out of term and out of the district on 27 August 1965, and that the defendant caused appeal entries to be entered on the docket on 1 September 1965, but did not file any exceptions to the judgment, or to the refusal of the court to find facts as requested by the defendant, until the service of its statement of the case on appeal on 28 December 1965. This was not in accordance with the requirements of G.S. § 1-186. Furthermore, the defendant's statement of its assignments of error does not comply with Rule 19(3) of the Rules of Practice in this Court, in that it does not appear from the assignments, themselves, what question is intended to be presented thereby, but we are directed on "a voyage of discovery" through the pages of the record. See Hines v. Frink, 257 N.C. 723, 127 S.E.2d 509; Hunt v. Davis, 248 N.C. 69, 102 S.E.2d 405. We have, nevertheless, considered each of the assignments as if it had been properly set forth and we find no merit therein.
No error.
MOORE, J., not sitting.