Pasadena Investment Co. v. Peerless Casualty Co.

WHITE, P. J.

Plaintiff has appealed from a judgment for defendant, which was entered after a demurrer to the complaint had been sustained and no amended complaint had been filed. The sole issue to be decided by this court is whether or not the allegations of the complaint state a cause of action against defendant under a forgery bond issued by it.

For convenience in reference, we will hereinafter refer to plaintiff as “Pasadena” and to defendant as “Peerless.”

The bond issued by Peerless to Pasadena indemnified Pasadena against “any loss . . . through having, in good faith and in the ordinary course of business . . . purchased or otherwise acquired, ... or given any value, extended any credit . . . on the faith of, or otherwise acted upon any ... securities, obligations or other written instruments which prove to have been forged, counterfeited, raised or otherwise altered, ...”

The loss for which Pasadena seeks to recover is alleged to have occurred as follows: Carl and Margaret Nilsson, doing business under the name of E. A. Haveles Manufacturing Company, “sold and assigned to plaintiff certain purported accounts receivable and purported indebtednesses”; at the time of such sale and assignment they represented to Pasadena that certain invoices from them to the House of Linden Toys, aggregating $4,405.41, “evidenced bona fide valid indebtednesses from House of Linden Toys to E. A. Haveles Mfg. Co. and that the indebtednesses shown on each of said invoices were due, owing and unpaid. ’ ’ Carl and Margaret Nilssen delivered to plaintiff at the time plaintiff purchased each of said indebtednesses and accounts a written receipt signed by Victor Linden, wherein and whereby Victor Linden stated and represented in writing that he had received the services cov

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ered by the said invoices. ‘ ‘ That each of the said invoices and receipts described hereinabove were false, fictitious and forged in that they did not represent any bona fide indebtedness” because such services “were not in fact rendered or furnished at all.” Carl and Margaret Nilsson and Victor Linden knew that said invoices and receipts were “false, fictitious and forged and knew that they did not represent any valid or bona fide indebtedness. ’ ’ At the time Pasadena purchased each of the said invoices Pasadena “believed the same.were genuine and that they represented the indebtednesses respectively shown” and Pasadena then also believed that the three purported receipts signed by Victor Linden were bona fide and genuine and that the services described therein had been rendered to him. Pasadena would not have purchased said invoices if it had not so believed. The invoices and receipts represented no indebtedness and Pasadena is damaged in the sum of $4,405.41.