May Department Stores Company, a Corporation, Appellant, v. Pittsburgh National Bank, a Corporation, 374 F.2d 109 (3d Cir. 1967)

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U.S. Court of Appeals for the Third Circuit - 374 F.2d 109 (3d Cir. 1967) Argued January 17, 1967
Decided February 9, 1967

Harry W. Miller, Pittsburgh, Pa. (Thomas Levendos, Royston, Robb, Leonard, Edgecombe & Miller, Pittsburgh, Pa., on the brief), for appellant.

Thomas M. Kerr, Jr., Pittsburgh, Pa. (Richard B. Tucker, Jr., Edward A. Mihalik, Patterson, Crawford, Arensberg & Dunn, Pittsburgh, Pa., on the brief), for appellee.

Before HASTIE, GANEY and SEITZ, Circuit Judges.



This is an appeal from summary judgment entered for the defendant after these facts were established without contradiction. An employee of the plaintiff, May Department Stores Co., fraudulently caused the plaintiff to draw its checks payable to fictitious suppliers. The wrongdoing employee then forged the endorsements of the fictitious payees, cashed the checks at the defendant bank and converted the proceeds. The bank charged the sums thus paid against the plaintiff's account.

The plaintiff then sued the bank for illegally charging its account with amounts paid on forged endorsements. On the record before it, and in the absence of any allegation or showing of countervailing circumstances by the plaintiff, the district court properly concluded that the bank was protected by the following provision of the Uniform Commercial Code as in force in Pennsylvania.

"(1) An indorsement by any person in the name of a named payee is effective if

* * * * * *

(c) an agent or employee of the drawer has supplied him with the name of the payee intending the latter to have no such interest." 12A P.S. § 3-405(1) (c).

The judgment will be affirmed.

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