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each occasion, after the pass book had been account and the fact of the forgeries. But written up and the vouchers returned, made it will be noticed that the plaintiffs did an examination of the account by comparing precisely what the appellants in this case the checks returned to them with the memo- failed to do when they compared their pass randum of checks in the margin of the check book as written up by the bank with their book, and the balance in the pass book with own books, and that they were deceived by the balance appearing in the check book, and the false balances which their clerk had on each occasion they were found to corre placed upon their own books. The court, spond. One of the plaintiffs then compared while recognizing fully the obligation rest. the checks with entries in the pass book by ing upon the depositor to make some exhaving the dishonest clerk who had commit. amination of his account with the bank ted the forgeries read the entries while he when made up, held that he was under no had the checks, and, no discrepancy appear- duty to so conduct the examination that it ing, the account was deemed to be correct would of inevitable necessity lead to the and was not further examined. It appeared discovery of the fraud; that he was only that the clerk by abstraction or forged bound to use reasonable diligence; and that vouchers and by false balances and readings on the facts as developed in that case such deceived the plaintiffs and prevented them diligence by the depositor was established. from ascertaining, by means of the examina- In Critten v. Chemical Nat. Bank, 171 N. tion thus conducted, the true state of the Y. 219, 230, 57 L.R.A. 529, 63 N. E. 969, 973, Rep. 80, 14 So. 335; National Dredging Co., positor was chargeable with notice by vir. v. Farmers' Bank, 6 Penn. (Del.) 580, 16 tue of having received his pass book and L.R.A.(N.S.) 593, 130 Am. St. Rep. 158, 69 canceled checks, without any question as to Atl. 607; Critten v. Chemical Nat. Bank, whether it had been injured or not; while 171 N. Y. 219, 57 L.R.A. 529, 63 N. E. 969. as to the checks which were paid after the

depositor was thus charged with notice, the

bank was held not liable. b. In case of a series of forgeries.

In National Bank v. Tacoma Mill Co. 104 Where there is a series of checks forged C. C. A. 441, 182 Fed. 1, there was a series and paid at different times, , some before of peculations by an employee, but, as the the depositor is chargeable with notice, and court held the depositor had fulfilled his some after he is thus charged, the bank is duty as to inspection of the pass book, the entitled to invoke the equitable doctrine of question as to the bank's liability for pecuestoppel as to those paid after the depositor lations occurring after he had had an opis chargeable with notice, if the failure portunity to inspect his pass book and disof the depositor to call attention to the cover them did not arise. forgeries misleads the bank into paying the

See Weisser v. Denison, 10 N. Y. 68, 61 subsequent checks. Hardy v. Chesapeake Am. Dec. 731; Brown v. Lynchburg Nat. Bank, 51 Md. 562, 34 Am. Rep. 325; Ken Bank, 109 Va. 530, 64 S. E. 950, 17 Ann. neth Invest. Co. v. National Bank, 96 Mo. Cas. 119; Leather Mfrs. Nat. Bank v. Mor. App. 125, 70 S. W. 173.

gan, 117 U. S. 96, 29 L. ed. 811, 6 Sup. Ct. This is stated to be the rule in Critten Rep. 657; Walker v. Manchester & L. Dist. v. Chemical Nat. Bank, 171 N. Y. 219, 57 Bkg. Co. 108 L. T. N. S. 728, 29 Times L. L.R.A. 529, 63 N. E. 969, although it does R. 492, supra, in all of which there was a not appear that the facts there called for series of forgeries. this decision.

In other cases of a series of forgeries, the element of injury to the bank is not c. Necessity that bank show injury. given special notice, but it is held that as to the checks paid after the depositor is

Where the right of the bank to throw chargeable with notice arising from his a loss upon the depositor is dependent upduty to examine, the loss falls upon him. on injury to the bank, the burden has been It is the theory that if the bank had been placed upon the bank to show that it has notified of the forgeries at the time when been injured by the dereliction in the dethe depositor was chargeable with notice, positor's duty. the subsequent forgeries would not have Consequently, where it has not shown been carried out. First Nat. Bank v. Allen, such injury, it will be presumed that it 100 Ala. 476, 27 L.R.A. 426, 46 Am. St. Rep. suffered none. Wind v. Fifth Nat. Bank, 80, 14 So. 335; National Dredging Co. v. 39 Mo. App. 72; McKeen v. Boatmen's Bank, Farmers' Bank, 6 Penn. (Del.) 580, 16 74 Mo. App. 281. L.R.A.(N.S.) 593, 130 Am. St. Rep. 158, 69 A depositor who failed to examine his Atl. 607. It is evident, however, that, for balance, pass book, and returned checks, inthe bank to invoke the equitable ground of cluding a forged one, for an unreasonable estoppel, it must appear that it has been time after they had been returned to him, misled to its injury.

is entitled to recover from the bank the In Israel v. State Nat. Bank, 124 La. 885, amount of the forged check paid by it, 50 So. 783, the bank was held liable for the where there is no showing that the bank checks which had been paid before the de- | suffered by the delay. Janin v. London &

the court had before it a case of payment, by an honest comparison with the vouchers by the bank of checks which had been raised. which were returned with the check book, It appeared that a comparison of the re- said: "It is clear, therefore, that at all turned vouchers with the check stubs would times a comparison of the returned checks have exposed the alterations in the checks, with the stubs in the check books would have and, as it was not necessary to examine the exposed the alterations made in the checks. pass book to accomplish such detection, that | Of course, the knowledge of the forgeries phase of a depositor's obligation was not that Davis possessed, from the fact that discussed. The failure to detect the altera- he himself was the forger, was in no respect tion was due to the fact that the verifica- to be attributed to the plaintiffs. But we tion of the account was as a rule intrusted see no reason why they were not chargeable to the dishonest clerk who had raised the with such information as a comparison of checks. The court in the opinion written the checks with the check book would have by Judge Cullen reaffirmed the general rule imparted to an innocent party previously laid down in the Frank Case, of an obliga- unaware of the forgeries. The plaintiffs' tion on the part of the depositor to examine position may be no worse because they in. his account and vouchers, and, in reaching trusted the examination to Davis instead of the conclusion that the plaintiffs were to a third person; but they can be no better chargeable with knowledge of the fraudulent off on that account. If they would have alterations which would have been disclosed been chargeable with the negligence or failS. F. Bank, 92 Cal. 14, 14 L.R.A. 320, 27, standing the depositor failed in his duty to Am. St. Rep. 82, 27 Pac. 1100.

examine the account. National Dredging The burden has been placed upon the bank | Co. v. Farmers' Bank, 6 Penn. (Del.) 580, to show injury even as to a series of forger- 16 L.R.A.(N.S.) 593, 130 Am. St. Rep. 158, ies. See Hardy v. Chesapeake Bank, 51 Md. 69 Atl. 607; Manufacturers' Nat. Bank v. 562, 34 Am. Rep. 325; Kenneth Invest. Co. Barnes, 65 Ill. 69, 16 Am. Rep. 576; Merv. National Bank, 96 Mo. App. 125, 70 S. chants' Nat. Bank v. Nichols & S. Co. 223 W. 173.

Ill. 41, 7 L.R.A.(N.S.) 752, 79 N. E. 38; But in Leather Mfrs. Nat. Bank v. Mor- New York Produce Exch. Bank v. Houston, gan, 117 U. S. 96, 29 L. ed. 811, 6 Sup. Ct. 95 C. C. A. 251, 169 Fed. 785. Rep. 657, it is stated that if the depositor In Manufacturers' Nat. Bank v. Barnes, was guilty of negligence in not discovering 65 Ill. 69, 16 Am. Rep. 576, a depositor, beand giving notice of the fraud of his clerk, ing obliged to leave the city for a short the bank was thereby prejudiced, because it time, gave to a clerk a power of attorney was prevented from taking steps, by the ar. authorizing him to draw checks on the bank rest of the criminal, or by an attachment for fifteen days, and lodged this power of of his property or other form of proceedings, attorney with the bank. After his return to conipel restitution; that it is not neces- at the end of the fifteen days the clerk sary that it should be made to appear by continued to draw checks and the bank to evidence that benefit would certainly have pay them. This is held constitute negliaccrued to the bank from an attempt to gence on the part of the bank which cansecure payment from the criminal; that an not be excused merely by the failure of the inquiry as to the damages in money ac- depositor to examine the returned checks. tually sustained by the bank by reason of A bank which has paid an overdraft of the neglect of the depositor to give notice a local agent upon the account of his prinof the forgery might be proper in an action cipal, who resides in another state, withto recover damages for a violation of the out ascertaining the authority of the agent, depositor's duty, but in a suit by the de- cannot assert failure of the principal to positor in effect to falsify its stated account examine the pass book and returned to the injury of the bank, whose defense vouchers after the balancing of the account, is that the depositor has by his conduct as an estoppel upon the principal to deny ratified or adopted the payment of the al- liability for the overdraft, since the failure tered checks, and thereby induced it to for. to ascertain the authority of the agent is bear taking steps for its protection against in itself negligence. Merchants' Nat. Bank the person committing the forgeries, the v. Nichols & S. Co. 223 Ill. 41, 7 L.R.A. right to seek and compel restoration and (N.S.) 752, 79 N. E. 38. payment from the person committing the A bank which cashed a check upon the forgeries is in itself a valuable one, and it forged indorsement of the payee named is sufficient if it appears that the bank, by therein was held negligent where it had reason of the negligence of the depositor, the genuine signature of the payee in the was prevented from promptly, and it may bank where it was accessible, and it is apbe effectively, exercising it.

parent that, had a comparison been made

between the genuine signature in its posV. Effect of negligence of bank.

session and the signature on the check, the

forgery would have been detected. Brixen If the bank has been negligent in failing v. Deseret Nat. Bank, 5 Utah, 504, 18 Pac. to discover the alteration or forgery of a 43.

W. A. E. check it is liable for paying it, notwith

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ure of another clerk in the verification of court, for the sale of real estate in North the accounts, they must be equally so for Dakota and the transmission of the proceeds the default of Davis, so far as the examina- thereof to such principal court for the pay. tion itself would have disclosed the facts. ment of the debts there provided, is a final We think it plain, therefore, that the find- order, affecting a substantial right made in

a special proceeding, and is applicable as ing of the referee that the plaintiffs were

such under § 7225, Rev. Codes, 1905. not negligent in the examination of the

Same consideration of evidence. pass book and vouchers is without evidence

2. In the case of such an appeal, and to sustain it, unless the plaintiffs discharged where the trial in the district court was had their duty to the defendant when they com- upon a stipulation of facts and depositions mitted the examination to a proper clerk, which were included in the certified record and were not responsible for the manner in on appeal from the county to the district which the clerk performed the task. From court, and no oral evidence was taken in the the language of the report of the learned latter court, no statement of the case is referee it would seem as if this last were into consideration the evidence as presented

necessary, and the supreme court can take the theory on which his decision proceeded. by the depositions and the stipulations. We do not think it can be sustained."

Executor rejection of claim effect. In addition to these decisions of our own

3. In allowing or rejecting a claim, an court it was distinctly held in Myers v. administrator acts merely as an auditor, Southwestern Nat. Bank, 193 Pa. 1, 74 Am. and his refusal to allow such claim is not St. Rep. 672, 44 Atl. 280, and in Leather res judicata. Mfrs. Nat. Bank v. Morgan, 117 U. S. 96, Same ancilliary administration 29 L. ed. 811, 6 Sup. Ct. Rep. 657, that the place of proof. depositor who sends his pass book to be 4. Where there is both a principal and an written up and receives it back with his ancillary administration, creditors may paid checks as vouchers is bound to examine prove their claims in either jurisdiction, the pass book and vouchers, and to report should be proved in both.

and it is not always necessary that they to the bank, without unreasonable delay,

Same right of heirs. any errors which may be discovered. These

5. Under the Code of North Dakota the decisions, it seems to me, sustain the con- heirs or devisees have no right to a decedclusion that the appellants were remiss in ent's property until his debts are paid. The their obligations, and that the judgment ap- creditors are the first preferred parties in pealed from should be affirmed, and which interest, and, until satisfied, heirs or legacourse I recommend.

tees have no enforceable interest.

Same foreign claim absence of Cullen, Ch. J., and Willard Bartlett, proof - effect. Chase, Cuddeback, Hogan, and Miller,

6. Where a resident of Iowa died in that

state and administration of her estate was JJ., concur.

had, and on such administration a creditor proved his claim and said claim was allowed

by the court, but there were not assets in NORTH DAKOTA SUPREME COURT. such jurisdiction sufficient to pay the same,

and an ancillary administration was had L. C. DOW et al., Admrs., etc., of Eulalie in North Dakota, where there was real esLillie, Deceased, et al.,

tate belonging to the estate, but no money or personal property, and there were no

debts, and a petition was filed in said anGEORGE L. LILLIE, Admr., etc., of Eula- cillary administration by the administrator lie Lillie, Deceased, Respt.

in the principal administration under (26 N. D. 512, 144 N. W. 1082.)

the direction of said principal court,

asking for the sale of the real estate in Appeal petition to sell decedent's es

North Dakota and the transmission of the tate.

proceeds to said principal court for the 1. An order of the district court which payment of the debts there proved and alconfirms an order of the county court in an lowed, held that said petition should have ancilliary administration refusing to grant been granted, even though such debts had a petition, filed by the principal adminis- not been proved in North Dakota in the istrator under the direction of the principal said ancillary administration. Headnotes by BRUCE, J.

(January 8, 1914.) Note. Sale of real estate in state other obligations of ancestor, see the note to than decedent's domicil to pay debts. Muldoon v. Moore, 21 L.R.A. 89.

For the question whether proceedings for This note does not include cases where sale of decedent's real property fall within there is a power of sale in the will of the the “omnibus” provision of the statute of decedent.

limitations, see the note to Re Jones, 25 For the subject of liability of heirs for L.R.A.(N.S.) 1304.

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PPEAL by petitioners from an order of rected to file the same by the presiding

the District Court for Bottineau County judge of the Iowa court. The petition affirming an order of the County Court alleged the principal administration in denying their petition for the sale of the Iowa, the allowance of claims therein far real estate of Eulalie Lillie, deceased, in in excess of the assets of said estate, and North Dakota, and the transmission of the prayed the county court of Bottineau proceeds thereof to petitioners for the pay-county, North Dakota, to direct the sale ment of her debts in Iowa. Reversed.

of the lands located in North Dakota and Statement by Bruce, J.:

to transmit the proceeds to the adminThis litigation was started by the filing istrator of the estate in Iowa, to be used in of a petition in proceedings pending in the paying the debts there proved. The petition county court of Bottineau county, North was heard by the county court of BottiDakota, relating to the administration of neau county and denied. An appeal was the estate of Eulalie Lillie, deceased. The seasonably taken from this order to the petition was filed by the administrator in district court of Bottineau county. That the principal administration of said estate court heard the proceedings upon the record held in the district court of Linn county, which was made in, and which was sent up Iowa, such administrator having been di- by, the county court, and on a stipulation

Actions to enforce a claim directly against, Maryland court of equity to order heirs the land itself as distinguished from special at law or devisees of a Maryland decedent proceedings to sell for debts are excluded. who was indebted to plaintiff, either to pay

the debt or to sell lands in Ohio belonging Orders for the sale of land without the

to the decedent, and bring the money into state.

the Maryland court for the payment of the

debt, as there was no extraterritorial opera. The court of the state of decedent's domi- tion to the statute from which the equity cil has, of course, no jurisdiction over the courts of Maryland derived their authority decedent's real property in another state. to decree the sale of a deceased debtor's real

Thus, where the state of Connecticut had estate for the payment of his debts; such granted to a man certain lands in the west- statute providing that “where any person ern reserve, in what is now Ohio, and there- dies, leaving any real estate in possession, after deeded her jurisdictional claim to the remainder or reversion, and not leaving a perUnited States, upon the death of the gran- sonal estate sufficient to pay his debts and tee intestate in Connecticut, the probate costs of administration, the court, on any court there directed his administrator to suit instituted by any of his creditors, may sell the interest of the intestate in these decree that all the real estate of such perlands for the payment of debts, and it was son, or so much thereof as may be necesheld that a sale made under this order was sary, shall be sold to pay his debts,” etc. invalid and the title to the land remained It was also held in the same case that if, in the heirs. Nowler v. Coit, 1 Ohio, 519, by arrangements between the heirs, the 13 Am. Dec. 640.

realty or a part of it was vested in them, So, in Brown v. Edson, 23 Vt. 435, it there could not be any claim that the Mary. was observed that an administrator ap- land court of equity should act in the pointed at the domicil of an insolvent in- premises, where there

evidence testate, taking an order of the court there showing that the lands in Ohio were anfor the sale of land in another state, could swerable for the decedent's indebtedness unnot give anything by his deed.

der the laws of the state of Ohio, the debt See also the remark in Leavens v. Butler, in question being a simple contract debt. 8 Port. (Ala.) 380, that the orphans' court In Allen v. Shanks, 90 Tenn. 359, 16 S. of the domicil could not subject the extra- W. 715, where the executors of a Tennessee territorial land to its jurisdiction and decree testator sold land in Arkansas, although the its sale for the payment of debts.

court seemed to think the will empowered Where the executrix of a New Hamp- them to sell land for the payment of debts, shire testator, who died owning land in the court said: “The executors sold and New Hampshire, Vermont, and Rhode Is- conveyed the Arkansas plantation, and took land, proved the will in New Hampshire and notes of purchasers. This will was never took a license from the court there to sell proved in that state, and complainants have so much of the real estate as, with the per- never qualified there. The decree of the sonal estate, would pay the debts and in- chancery court did not authorize sales out cidental charges, and thereafter accordingly of the jurisdiction in express terms, and sold the Rhode Island land or some of it, we are unwilling to assume that such power it was held that her deed passed no title was implied. The purchasers have not been but that it was validated by a subsequent brought before the court, so that we might act of the Rhode Island legislature passed affect them by our decree. We think these in that behalf, although the will was never sales were invalid and the executors canprobated in Rhode Island. Wilkinson v. not have credit for the notes of the purLeland, 2 Pet. 627, 7 L. ed. 542.

chasers, and will be chargeable for the rents In Seldner v. Katz, 96 Md. 212, 53 Atl. of the property as if no sale had been 931, it was held that it was error for a made."

was

no

es

of facts. The record of the county court, time the said Eulalie Lillie had given to included the depositions on which the cause i Karl W. Kendall notes aggregating $12,500. was originally tried. The district court On April 27, 1909, these notes, together affirmed the order of the county court in with other claims, were proved against the all respects, and an appeal was taken from estate in Iowa and were allowed by the this order to the supreme court. The facts court and are now unpaid. The decedent as disclosed by the record, and the stipula. also during her lifetime gave to petitioner tions, are as follows: Eulalie Lillie at the the First National Bank of Marion, Iowa, time of her death was a resident of Marion, her notes to the amount of $2,000. On in the state of Iowa. On or about Decem- April 23, 1909, these notes were also proved ber 2, 1908, George L. Lillie, the respondent, against the Iowa estate, and were allowed filed a petition in the district court of Linn by the court in the sum of $1,650, which county, Iowa, asking that the estate of sum is still unpaid. Decedent left no real Eulalie Lillie be admitted to probate, and estate in the state of Iowa and only $200 in the proceeding thus started an order in personal property. Decedent left no perwas made appointing L. C. Dow and Jose sonal property in North Dakota, but did phine Lillie, two of the petitioners above leave real estate which praised in the named, as administrators. During her life. 'probate proceedings at $14,400. During

In Mowry v. McQueen, 80 Minn. 385, 83 without showing that the personal property N. W. 348, the merits were not important in Ohio was exhausted. as it was held that under the circumstances Where administration on the estate of a the statute of limitations or the rules of resident of Arkansas was taken out in Tenthe common law as to time would bar any nessee, where there was real property and action in equity in Minnesota to reach cer- a small amount of personal property, it tain real property of an intestate resident was held that it was proper for the court in South Carolina, the land being situated of Tennessee to administer the estate and in Wisconsin.

sell the land for the payment of the debts,

if it appeared that there were debts exceedThe question of exhaustion of domiciliary ing the personal property, some of the credpersonal property.

itors being residents in other states, withoui

reference to the situation of the There seems, in the absence of statute, tate in Arkansas or to its solvency. Gilto be no reason why the power of the local christ v. Cannon, supra, where the court court should be restricted to cases where it said: “It is an admitted principle of inis shown that the personal property in the ternational law, that every state has the place of principal administration is insuffi- right to control and dispose of property accient to pay the debts.

tually within its jurisdiction; and it is the Thus, it has been held that the real prop- duty of every state to protect the rights erty ought to be sold for the payment of of its own citizens, and to aid them in the debts without showing the want of per- | recovery of their just debts, without the nesonal property available for that purpose cessity of resorting, for satisfaction, to the in the domiciliary administration. Law- distant forum of the original administrarence's Appeal, 49 Conn. 411; Rosenthal v. tion." Renick, 44 Ill. 202; Gilchrist v. Cannon, 1 See also Partee v. Kortrecht, 54 Miss. 66, Coldw. 581.

infra, “When the local administration is In Lawrence's Appeal, supra, where the considered principal.” executors of a decedent resident in New It was held in Prescott v. Durfee, 131 York proved his will there, took the rents Mass. 477, that the Massachusetts probate of Connecticut real estate, and refused pay, court had jurisdiction to grant administrament of claims of Connecticut creditors, al- tion of the estate of a nonresident leay. though there was sufficient personalty in ing only real estate in Massachusetts, New York to pay all claims, it was held although at the principal place of administraproper that eight years after his death at tion there was more than sufficient personal the request of a Connecticut creditor, the property to pay all his debts. The purpose Connecticut court should admit the will of the application, it appears, was to subto probate, appoint a local administrator ject the real estate in Massachusetts to a with the will annexed, and should order land claim against the decedent by suit pending in Connecticut to be sold for the payment at the time of his death and under which of claims in Connecticut. The court ob- the real property in Massachusetts had been served that it might well be found that attached. the executors had refused to prove the will But it has been held that the creditors in Connecticut.

ought, in the first place, to attempt to colIn Rosenthal v. Renick, supra, the execu- lect their claims at the place of domiciliary tor of an Ohio will having died, letters administration. Thus, where a testator with the will annexed were granted to two resident in Louisiana died, leaving a will different persons respectively in Ohio and probated there, but was intestate as to real Illinois, and some claims being filed in Il-estate in Massachusetts, and there was an linois, it was held that the Illinois land ample fund of personal property for the might be sold for the payment of debts payment of all his debts in Louisiana, it

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