Home/Oregon Supreme Court/School District 47 v. United States National Bank

School District 47 v. United States National Bank

211 P.2d 723, 187 Or. 360, 1949 Ore. LEXIS 204
CourtOregon Supreme Court
DecidedSeptember 29, 1949
StatusPublished
Cited by5 cases

This text of 211 P.2d 723 (School District 47 v. United States National Bank) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
School District 47 v. United States National Bank, 211 P.2d 723, 187 Or. 360, 1949 Ore. LEXIS 204 (Or. 1949).

Opinion

BAILEY, J.

This action was brought by plaintiff, School District 47 Joint, Columbia County, Oregon, against defendant, The United States National Bank of Portland (Oregon), a corporation, to recover $84,953.50 alleged to have been wrongfully paid by defendant from funds of plaintiff on 116 instruments, referred to by plaintiff as “warrants” and by defendant as “cheeks”, fraudulently issued by Lee Schwab, clerk of plaintiff school district. From a judgment for $34,848.94, rep *363 resenting the aggregate amount of 114 of such instruments, in favor of plaintiff, defendant has appealed.

The complaint alleges that, during all the times therein mentioned, plaintiff was and now is a duly organized and existing school district of Columbia County, Oregon, and that Lee Schwab was, during the times therein mentioned, the clerk of such district; that defendant was and now is a corporation organized under the National Banking Act of the United States of America; that, during all the times mentioned in the complaint, plaintiff “had money on deposit with the defendant in Columbia County, Oregon, in its commercial department”; that between August 1, 1945, and July 24, 1946, said Lee Schwab, without the authority or consent of plaintiff and without any consideration to plaintiff, issued 116 instruments, each purporting to be a school warrant of the plaintiff district; and that on many of such pretended warrants Lee Schwab, without the authority or consent of plaintiff, fraudulently forged'the signature of the chairman of the board of school directors of plaintiff district and without the authority or consent of plaintiff “fraudulently signed, forged and endorsed the name of each payee in the pretended warrants and secured the amount thereof and thereby embezzled the sum of $34,953.50.”

It is further alleged that between August 1, 1945, and July 24,1946, the defendant, without the authority or consent of plaintiff, paid the amount of such pretended warrants, to wit, $34,953.50, out of the funds which plaintiff had on deposit with defendant, and that “at the time defendant paid such pretended warrants the defendant knew or in the exercise of reasonable care should have known that the pretended warrants *364 were not valid warrants or valid obligations of the plaintiff.”

Defendant, in its answer, admits that the school district and the bank were duly organized; that Lee Schwab was the clerk of plaintiff district; and that during all the times mentioned the school district had money on deposit in the commercial department of the defendant bank. Defendant denies all the other allegations of the complaint and alleges that, during the times therein mentioned, Lee Schwab was “the duly appointed, qualified and acting clerk of the plaintiff school district between the first day of August, 1945, and the 24th day of July, 1946, and as such was the duly constituted custodian of all funds belonging to the plaintiff school district”, and that “all money paid from the checking or commercial account of plaintiff maintained with the defendant were upon checks signed by the officers of defendant duly authorized to sign such checks.”

In its affirmative answer defendant alleges that, during all the times therein mentioned, plaintiff school district was and now is a duly organized school district of the second class; that between August 1, 1945, and July 24,1946, one Lee Schwab was the duly appointed, qualified and acting school clerk of that district; that defendant has ever since on or about July 29, 1933, maintained and operated a branch bank at St. Helens, Columbia County, Oregon, under the name of The United States National Bank of Portland (Oregon), St. Helens Branch; and

“that as an incident to said banking operation, the defendant has heretofore and now does operate and maintain a department commonly referred to as the Commercial Accounts Department, in which *365 said Department persons may deposit funds subject to withdrawal only on checks bearing a signature or signatures certified to the defendant by the depositor; that as an incident to the operating of the aforesaid commercial or checking account, the defendant at the conclusion of every calendar month makes up a statement showing all deposits to and withdrawals from each account and said monthly statement, together with the vouchers or canceled checks representing the withdrawals from each account for the past month, are available for delivery to the depositor. ”

The foregoing allegations are contained in paragraphs I and II of defendant’s affirmative answer. It is therein further alleged that since the establishment of the St. Helens Branch Bank, to wit, July 29, 1933, plaintiff has maintained a commercial or checking account with the defendant at said branch; that during such period plaintiff has from time to time certified to defendant the names of the officers authorized to sign checks upon said account; that said officers from time to time during said period “have drawn their checks in the same form and substance” as those theretofore referred to; that ‘ ‘ said cheeks have been received, passed and acted upon in the regular channel of bank paper as are all checks”; that plaintiff “through such means and medium paid and discharged” the accruing obligations for teachers’ pay and all other expenses and charges against it; and that during the time from August 4, 1945, to July 24, 1946, plaintiff had authorized it to honor checks upon plaintiff’s account signed by any two of the following, to wit: Crien F. Hawkins, Lee Schwab and T. F. Keasey.

It is further alleged that at various times between October 25,1945, and July 5,1946, defendant delivered to plaintiff the monthly statements and canceled checks *366 or vouchers for the months of July, 1945, to and including June, 1946; that such canceled cheeks or vouchers evidenced withdrawals in the sum of $105,-489.50 from the checking or commercial account; and that on August 22, 1946, defendant delivered to plaintiff the monthly statement and canceled checks for the month of July, 1946, and to the 22nd day of August, 1946, aggregating $6,244.45 in withdrawals from such account. It is then averred that § 40-1009, O. C. L. A., provides that no bank, which has paid and charged to the account of a depositor a forged check issued in the name of such depositor, shall be liable to such depositor unless within 30 days after the return to said depositor of the voucher representing such payment said depositor shall notify the bank that the check so paid is forged; that within 30 days after the receipt of the canceled checks and vouchers by plaintiff from defendant the plaintiff did not notify the defendant that any of said canceled cheeks or vouchers were forged, and that “if any of the aforesaid cheeks represent the withdrawals from plaintiff’s account as alleged in plaintiff’s complaint, then plaintiff is barred and estopped from maintaining this action by reason of its failure to notify the plaintiff [defendant] of the alleged forgeries within thirty days after having received the canceled checks or vouchers. ’ ’

Plaintiff, in its reply to the' allegations intermingled with defendant’s denials, denies that the money paid by defendant from the checking or commercial account which plaintiff maintained with it was upon checks signed by officers of the school district.

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Cite This Page — Counsel Stack

Bluebook (online)
211 P.2d 723, 187 Or. 360, 1949 Ore. LEXIS 204, Counsel Stack Legal Research, https://law.counselstack.com/opinion/school-district-47-v-united-states-national-bank-or-1949.