The court did not err in dismissing on demurrer an action to recover from a bank amounts paid by it upon checks to which the depositor's signature had been forged, for notice of the forgery was not given to the bank within 60 days after the statements and vouchers were returned to the depositor, as required by Code 13-2044; and the fact that the forgeries were committed and concealed by a person whom the depositor entrusted to examine his statements and vouchers was not sufficient to excuse the depositor from giving such notice to the bank.
The writ of error is to a judgment sustaining the defendant Savannah Bank & Trust Company's general demurrer to the petition of M. J. Cesaroni, as executor of the estate of Joseph A. Cesaroni. The allegations of the petition material to a decision of this case are as follows: Joseph A. Cesaroni was a depositor and customer of Citizens' Bank & Trust Company of Savannah, which later merged with the defendant bank, and he also had a checking account and funds on deposit with the defendant bank until his death. Cesaroni was in the seafood business. He employed the firm of W. Arthur Collins & Company as auditors. They "were accustomed to receive" Cesaroni's statements and canceled checks from the defendant bank in order to keep his books and audit his affairs. This firm had no authority to issue, endorse, or negotiate checks for Cesaroni. Collins & Company assigned the duty of auditing Cesaroni's affairs to one of their employees, William A. Collins, Jr., and he had access to all of the bank books, statements, and canceled checks of Cesaroni. M. J. Cesaroni, brother of the deceased, was the only person authorized to issue checks against Cesaroni's account in either bank. Between the dates of July 6, 1950, and December 29, 1951, Collins secured a number of Cesaroni's business checks without his knowledge or consent, and forged M. J. Cesaroni's signature on forty checks against the deceased's account. The checks were drawn without Cesaroni's knowledge or consent. Collins also forged endorsements of various payees, whereupon the checks were honored and accepted by the defendant bank, and the amounts thereof, aggregating $18,287.95, were unlawfully charged against Cesaroni's account. Portions of the funds withdrawn were redeposited in the defendant bank by Collins, in his own account or in accounts controlled by him. Four of the checks, payable to "cash," were cashed by the defendant bank without requiring an endorsement, and thirty-six of them were cashed without ascertaining the genuineness of the payee's endorsement. Collins secured the statements from the defendant bank each month and removed the forged checks therefrom to conceal his illegal withdrawal of funds from Cesaroni's account. The forging of the maker's signature and of the payees' endorsements on the checks was unknown to the deceased and was not discovered by his executor, M. J. Cesaroni, until after Cesaroni's death on August 30, 1952. Upon discovering that the forged checks had been illegally charged against the deceased's account, the petitioner notified the bank, but the defendant bank refused to refund the amount of the checks charged to and deducted from the deceased's account by reason of the bank's negligence.
Code 13-2044, so far as here applicable, provides: "No bank which in good faith has paid, and charged to the account of a depositor, any money on a forged or raised check issued in the name of the depositor shall be liable to said depositor for the amount paid thereon, unless, (1) within 60 days after the return to the depositor of the voucher representing such payment, the depositor shall notify the bank that the check so paid was forged or raised."
There is nothing in the petition to indicate that the bank had paid the checks in question other than in good faith. The last check was forged by Collins on December 29, 1951, and notice was not given to the bank until some time after Cesaroni's death in August, 1952. Statements with vouchers or canceled checks were alleged to have been secured by Collins from the bank each month. Collins, the employee of the firm employed by Cesaroni to examine his statements and checks, and to keep and audit his books, must have received the statements on behalf of Cesaroni. The vouchers or canceled checks showing the forgeries were also returned, but it is alleged that Collins removed the checks forged to conceal his withdrawal of funds from Cesaroni's account. The petition does not show compliance with the statutory provision for notice to the bank within 60 days from the return of the forged checks.
Are facts alleged showing a reason which a jury would be authorized to find sufficient to excuse Cesaroni's failure to notify the bank of the forgeries? In Citizens' &c. Bank v. Ponsell, 33 Ga. App. 193 (125 S. E. 775), it was held that alleged duress by a husband who had forged checks on his wife's account was an excuse for his wife's failure to expose his forgery. And in White v. Georgia Railroad Bank &c. Co., 71 Ga. App. 78 (30 S. E. 2d 118), the fact that the depositor whose name had been forged to a check died three days after the check had been forged was held to be sufficient reason for not complying with the statute.
The alleged facts relied upon in this case are that the forgery was committed by an employee of the depositor, who by his position had unusual opportunities to impose forged checks on the bank and to conceal knowledge of the forgery from the depositor. Collins, the forger, was the employee indirectly delegated by Cesaroni to examine the statements and canceled checks which would have shown the forgery. But if the only means used to conceal the forged checks from Cesaroni was to remove them, a casual comparison of the remaining checks with the items shown as paid on the statement would have shown a discrepancy. And if, as alleged, Cesaroni employed the same firm "to audit his affairs" as he employed to keep his books, it would seem that the only excuse offered for his failure to discover the forgeries and to notify the bank thereof was his own neglect.
"Where one of two innocent persons must suffer by the act of a third person, he who put it in the power of the third person to inflict the injury shall bear the loss." Code 37-113. Although the bank is bound to know its depositor's signature, Code 13-2044 imposes a duty upon the depositor as well, to examine his statements and canceled checks within 60 days from their return to him, so as to prevent a series of forgeries over a period of time. Whether Cesaroni was chargeable with Collins' knowledge of either the forgery or of what the statements and vouchers would have shown is unnecessary to decide. Cesaroni was at least chargeable with knowledge of such facts as an honest agent would have acquired from an impartial examination of his statements and books. Cesaroni's failure to obtain actual knowledge of the forgeries, through the dishonest concealment of Collins, the forger, cannot be laid to the defendant bank so as to shift the loss to it. See 9 C.J.S. 745, 356 d (2); 7 Am. Jur. 413, 574; Id. 370, 515; 15 A.L.R. 163; 67 A.L.R. 1124; 103 A.L.R. 1148.
Since the petition failed to show either compliance or facts excusing compliance with Code 13-2044 on the part of the deceased depositor, the court did not err in sustaining the general demurrer and dismissing the action.