Crow v. Bank of America National Trust & Savings Ass'n

DORAN, J. The appeal herein is from a judgment entered upon a verdict in favor of plaintiff, a depositor in the defendant bank, in the sum of $7,912.62, representing the amount of 43 checks signed with plaintiff’s name by a bookkeeper, Virgil Fore, without plaintiff’s authority.

It appears that plaintiff operated three cafés in Long Beach, and about the middle of January, 1946, employed Virgil Fore, aged 21 years, as bookkeeper. Prior to the forgeries of plaintiff’s signatures on which the present action is predicated, Fore had raised the amount of certain paychecks, such conduct commencing shortly after employment, which evidence is relied upon by the appellant as “showing conclusively the negligence of plaintiff in failure to detect and report” to the bank such earlier activities. In raising these earlier checks, Fore’s practice was to prepare blank checks for plaintiff’s signature, leaving a space between the dollar mark and the first figure in the amount; the line in which the amount was to be written in words was left blank and later filled in with [432]a check writing machine. After plaintiff had signed the cheeks in that condition and bearing the correct amount in figures, Fore would then insert an additional figure immediately after the dollar sign, thus raising the amount from, say, $ 68.50 to $268.50, printing in the raised amount in words with the machine. The lower and correct amount, however, was entered on the check stub which therefore presented a normal appearance to anyone examining the checkbook. In all cases the fraudulent checks, whether of the earlier raised variety or of the later forged kind, were abstracted from the monthly bank statement by Fore as soon as same were received in the office, and immediately destroyed. At the trial, therefore, it was impossible to produce in evidence any of the forged checks involved in the present action. As before indicated, the present action is not predicated upon the earlier raised checks but upon checks bearing forged signatures.

It appears that Fore’s first forgeries of Crow’s signatures, committed in July, 1946, were effected by tracing plaintiff’s genuine signatures; later the name was written freehand. The blank checks used were obtained from a spare checkbook and were therefore not numbered consecutively with the paychecks currently used. Fore caused Crow’s books to appear in balance principally by the device of entering fictitious credits in the inventory account.

In June, 1946, Fore called the manager’s attention to the absence of checks numbered 13291-13299 which should have been at the end of a checkbook. The manager, Juniel, thought “possibly the bank had not put them in when they made the books up,” but went to the bank and stopped payments on the missing numbers. Fore had, in fact, abstracted the checks for use in forgeries, and reported the checks as missing, being about to leave on a “draft call,” fearing that the loss of the checks might be discovered.