Summary
In McCormick v. Rapid City Nat. Bank, 67 S.D. 586, 297 N.W. 39, the deposit contract limited the time within which to examine and give notice to 15 days after receiving a monthly statement.
Summary of this case from Haman v. First National BankOpinion
File No. 8348.
Opinion filed March 18, 1941.
1. Banks and Banking.
In depositor's action against bank for amount of forged checks charged to depositor's account, bank's failure to show affirmatively that it directed depositor's attention to provision of contract between him and bank that bank would not be liable for amount paid on forged check and charged to depositor's account, unless he gave bank written notice of forgery within 15 days after date of mailing of statement of account, with canceled vouchers, to him, did not preclude bank from relying on provisions of such contract as defense.
2. Banks and Banking.
A contract between bank and depositor, providing that bank would not be liable for amount paid on forged check and charged to depositor's account, unless he gave bank written notice of forgery within 15 days after date of mailing of statement of account, with canceled vouchers, to him, precluded depositor from questioning all charges made against his account for amounts of forged checks cashed by banks, except two such checks delivered to depositor on day of discovery of forgeries.
3. Banks and Banking.
A depositor's breach of duty in failing to give bank notice of forgeries of checks, cashed by it and charged to his account, within time required by contract between him and bank, entitled bank to set off amounts of two later forged checks cashed by it and delivered to depositor on day of discovery of forgeries, against balance due depositor, in absence of negligence in cashing such checks or previous forged checks.
4. Banks and Banking.
In depositor's action against bank for amounts of forged checks cashed by bank and charged to depositor's account, trial court's failure to submit to jury question of bank's negligence in cashing forged checks, delivered to depositor on day of discovery of forgeries, and previous forged checks, was error requiring reversal of judgment for bank.
Appeal from Circuit Court, Pennington County; Hon. A.R. Denu, Judge.
On rehearing.
Order and judgment appealed from modified and reversed.
For former opinion, see 67 S.D. 444, 293 N.W. 819.
Atwater Helm, of Sturgis, for Appellant.
H.F. Fellows, of Rapid City, for Respondent.
In this action a depositor prays judgment against his bank for an amount equal to the aggregate of a series of forged checks charged to his deposit account. Reference must be had to our original opinion, 67 S.D. 444, 293 N.W. 819, for a full understanding of the issues.
Rehearing was granted because through inadvertence we failed to consider the issues in the light of a contract signed by the depositor at the time of opening his deposit account. Among other things, that contract provided: "In the mailing or personal delivery of statements with cancelled vouchers, this Bank will not be liable for any amount paid on any forged or altered check issued in customer's name and charged by it to his account, * * * nor for any difference of account unless notice thereof shall be given by the customer in writing to said Bank within fifteen days after the date of mailing or personal delivery to customer of such statement of account with cancelled vouchers."
The Bank urges this contract as a complete defense as against all of the claims of the depositor except the amount of two checks cashed during June, 1938, they being the two vouchers delivered to the depositor on the day the forgeries were discovered. That more than fifteen days had elapsed since the mailing of all other vouchers to the depositor is the only inference which this record will support.
Predicated upon Los Angeles Investment Company v. Home Savings Bank of Los Angeles, 180 Cal. 601, 182 P. 293, 5 A.L.R. 1193, and Wussow v. Badger State Bank of Milwaukee, 204 Wis. 467, 475, 234 N.W. 720, 236 N.W. 687, the depositor contends that the Bank may not rely upon the provisions of this contract, because it failed to cause the record to affirmatively show that it had directed the depositor's attention to the provision. This contention must be ruled against the depositor. In the foregoing decisions the courts were not dealing with contracts signed by a depositor. The contract at bar was signed by the depositor, and no attempt has been made to avoid that contract for fraud or upon other equitable grounds. Knowledge of its contents is conclusively presumed. Stoefen et al. v. Brooks et al., 66 S.D. 587, 287 N.W. 330; Reed v. Coughran et al., 21 S.D. 257, 111 N.W. 559; Farlow v. Chambers, 21 S.D. 128, 110 N.W. 94.
[2, 3] The conclusion of our original opinion is modified, and we now conclude and hold that the contract of the parties precludes the depositor from questioning all charges made against his account, except the two checks of June, 1938. It follows, from the views expressed in that opinion from which we do not recede, that the amount of these two remaining checks must stand as an offset by the Bank because of the depositor's breach of duty in failing to give notice of prior forgeries of the series, unless the Bank was negligent in cashing these or previous items in the series of forgeries. Considering these two checks separately, the Bank must be credited with the amount of the particular check under consideration unless it was negligent in failing to recognize the spurious character of that check or of any previously paid forgery of the series.
Because of the court's failure to submit this question of negligence of the Bank to the jury, the order and judgment are reversed.