Plaintiff's depositor gave to A a check, payable to A and B, in return for a chattel mortgage and a note, both signed by A and B. The check was indorsed and presented to the defendant bank for collection. The plaintiff paid the check, debiting the drawer's account. Two years later, when the note came due, it was found that B's name had been forged to the note, the mortgage, and the check. Plaintiff then credited its depositor's account with the amount of the check, and now seeks to recover from the defendant. The court held that the drawee was bound to reimburse the drawer for any loss due to the forged check, but, since the loss here was "due to a forgery upon a note and a mortgage" and not to the forged check, the drawee (plaintiff) owed nothing to its depositor; its payment was voluntary, and it cannot recover from the defendant. Provident Savings Bank & Trust Co. v. Fifth-Third Union Trust Co., 43 Ohio App. 533, 183 N. E. 885 (1932).
BANKS AND BANKING-LIABILITY OF DRAWEE BANK FOR PAYMENT ON FORGED INDORSEMENT,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol32/iss2/9