BILLS AND NOTES - PRICE v. NEAL - DUTY OF PRESENTER BANK TO MAKE INQUIRY

Authors

Oscar Freedenberg, University of Michigan Law SchoolFollow

Abstract

A stranger opened an account in the defendant bank and deposited therein several large checks (payable to himself) forged with the signature of the president of the plaintiff bank and drawn on the plaintiff. The checks were indorsed by the forger, and also by the defendant, the latter "guaranteeing prior indorsements." After payment by the plaintiff, the amounts were credited to the forger's account and soon thereafter withdrawn. The plaintiff alleged a local banking custom which required careful watching of new accounts and which the defendant failed to observe. On demurrer to the plaintiff's petition, held, that the rule of Price v. Neal is in force under the Negotiable Instruments Law and that the plaintiff has failed to allege sufficient acts of carelessness on the part of the defendant to prevent the operation of the rule. Commerce-Guardian Bank v. Toledo Trust Co., 60 Ohio App. 337, 21 N. E. (2d) 173 (1938).

Recommended Citation

Oscar Freedenberg, BILLS AND NOTES - PRICE v. NEAL - DUTY OF PRESENTER BANK TO MAKE INQUIRY, 38 Mich. L. Rev. 713 (1940).
Available at: https://repository.law.umich.edu/mlr/vol38/iss5/10