La Vista Cemetery Ass'n v. American Savings & Loan Ass'n

Opinion

FLEMING, J.

Plaintiffs La Vista Cemetery Association and The Trustees of La Vista Cemetery Association Endowment Care Fund (hereafter collectively La Vista) appeal the judgment of dismissal of their action against American Savings and Loan Association (hereafter American) for the recovery of money on deposit and for damages for fraud. American’s demurrer to the first amended complaint for failure to state a cause of action and for uncertainty was sustained by the trial court without leave to amend.

[368]

The complaint reveals the following facts: In August 1964 two La Vista employees were entrusted with three checks totalling $30,000 payable to La Vista. The employees endorsed the checks in La Vista’s name for deposit in an American savings account, which latter account was in the name of an entity controlled by the employees. Shortly thereafter the employees withdrew these funds from the account and apparently have since absconded.

Two possibilities flow from these facts. First, the acts of the employees in endorsing the checks and depositing them in American could have been authorized. If so, La Vista has no cause of action against American, for the exhibits incorporated in La Vista’s complaint show that authorized withdrawals have emptied the American account and left American with liability to no one under that account. Second, the acts of the employees in endorsing and depositing the checks could have been unauthorized. Under this possibility La Vista would be in the position of a payee whose endorsement has been forged. By the law applicable in 1964 (former § 3104 of the Civ. Code) the remedies of a payee against a holder or collecting bank which collects from the drawee and gives the money to a false payee, are for money had and received

(George

v.

Security Trust &

Sav.

Bank,

91 Cal.App. 708 [267 P. 560]), or for conversion

(Fabricon Products