Bank of America National Trust & Savings Ass'n v. Security-First National Bank

BARNARD, P. J. These two actions were consolidated for trial. From a judgment in favor of the respective plaintiffs [648]the various defendants have appealed. For obvious reasons, the only defendant filing briefs here is the Citizens National Trust and Savings Bank, which will be referred to as the appellant. The only plaintiff filing a brief is the Bank of America National Trust and Savings Association, which will be referred to as the respondent.

On January 31, 1930, the respondent, at its Visalia Branch, issued its cashier’s check for $2,000 payable to the order of W. A. Patterson. This was issued at the request of W. A. Scott and delivered to him. Scott delivered the check to persons whom he believed to be agents of Patterson. On February 3, 1930, the check was deposited by one Getty in his checking account with the appellant in Los Angeles. The check, when deposited, bore the purported indorsement of Patterson and the genuine indorsement of Getty. After crediting the amount of the check to Getty’s account the appellant placed its stamp indorsement thereon, “Pay to the order of any bank or banker, all prior endorsements guaranteed,” and forwarded the check to American Trust Company, which bank credited the appellant with the amount of the check, placed its similar indorsement thereon and forwarded it to the Visalia Branch of the Security-First National Bank of Los Angeles, which bank in turn credited the American Trust Company, placed a similar indorsement thereon, and on February 4, 1930, presented the check to the drawee, the respondent, and received payment. It was later discovered that the purported signature of Patterson was a forgery, and these actions followed. Respondent’s action was commenced on December 18, 1933, within four years of appellant’s indorsement of the check, but more than three years after the discovery of the forgery.

The main question presented is whether the action is barred by the statute of limitations. "While the respondent contends that the action is one upon an obligation or liability founded upon a written instrument, with a four-year limitation, the appellant contends that it is one for money paid under mistake and is barred under the provisions of section 338, subdivision 4, of the Code of Civil Procedure.

In support of its contention the appellant argues that its liability can arise only from the fact that it became an indorser of the check as defined in section 3144 of the Civil [649]