Plaintiff, trustee, a man of banking experience, opened an account with the defendant bank, instructing that only checks signed by him, or by one of his agents, and countersigned by one of two different agents should be honored. Over a period of three years there were numerous departures from the original instructions given to the bank, participated in by the plaintiff as well as by his agents. Two of the agents misappropriated trust funds by cashing checks through defendant bank without the instructed countersignatures, and without knowledge of the plaintiff, but during this period the plaintiff failed to inspect his monthly reports from which he could have discovered the misappropriations. Plaintiff sues the bank on thirty-three checks representing misappropriated funds among which are several checks signed by him without the proper countersignatures. Held, the plaintiff could not recover because of failure to inspect the monthly statements, and payments were ratified by his own participation in the deviations from the original instructions given the bank. Phillip v. First National Bank of Chicago, 297 Ill. App. 498, 18 N. E. (2d) 57 (1938).
Michigan Law Review,
BANKS AND BANKING - LIABILITY OF BANK FOR PAYMENT OF CHECKS WITH IMPROPER SIGNATURES - DUTY OF DEPOSITOR TO INSPECT MONTHLY STATEMENTS,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol37/iss8/14