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DLUGE v. ROBINSON (11/12/64)

decided: November 12, 1964.

DLUGE
v.
ROBINSON, APPELLANT



Appeal from judgment of County Court of Philadelphia, June T., 1960, No. 15083-C, in case of Ethel Dluge and Benjamin Rimm, executors of estate of Isaac Dluge, deceased, v. J. Robinson, also known as Joseph G. Robinson.

COUNSEL

Herbert H. Hadra, with him Maurice Freedman and Robert H. Arronson, for appellant.

Samuel B. Brenner, with him Harry N. Brenner, and Brenner and Brenner, for appellees.

Ervin, Wright, Woodside, Watkins, Montgomery, and Flood, JJ. (Rhodes, P. J., absent). Opinion by Flood, J.

Author: Flood

[ 204 Pa. Super. Page 406]

This is an appeal from a judgment for the plaintiffs in an action against J. Robinson as endorser of two checks, brought by Isaac Dluge, the endorsee. The checks were dishonored by the drawee bank because of insufficient funds in the maker's account. Dluge died after instituting suit and the executors of his estate have been substituted as plaintiffs.

The complaint sets forth that immediately after the bank refused payment and returned the checks to Dluge, he returned them to the defendant with a demand for payment which the defendant refused. The defendant, both in his answer and on the witness stand, denied any demand for payment at the time Dluge returned the checks. When called by the plaintiffs for cross-examination, Robinson testified that the checks had been returned to him by Dluge "for insufficient funds, to give them back to Mr. Wapner [the maker]" and that he turned them over to Wapner and never got them back. Wapner testified that he paid the amount of the checks to Dluge and then tore them up. The trial judge, who heard the case without a jury, overruled an objection to the admission of Wapner's testimony at the trial, but later reconsidered that ruling. Concluding that Wapner was an incompetent witness under the Dead Man's Act of May 23, 1887, P. L. 158, § 5, cl. (e), 28 PS § 322, she excluded his testimony from consideration in reaching the decision that plaintiffs were entitled to recover on the checks.

1. If the plaintiffs were holders in due course, they would have to prove only (1) that the defendant endorsed the checks and delivered them to Dluge, and (2) that they had been presented to the endorser for payment within a reasonable time. Uniform Commercial Code, Act of April 6, 1953, P. L. 3, as amended, October 2, 1959, P. L. 1023, 12A PS § 3-501(1)(b). In the case of an uncertified check this is presumed to be

[ 204 Pa. Super. Page 407]

    within seven days after the endorsement. U. C. C., § 3-503(1)(e), § 3-503(2)(b).

"Presentment is a demand for acceptance or payment . . . by or on behalf of the holder." U. C. C., § 3-504(1). The only evidence of any demand was the admission by defendant that he received a letter from Dluge's attorney demanding payment. The defendant did not state when he received this letter. The plaintiffs did not offer the letter in evidence and there is no way to determine from the record when it was sent except that it was presumably sent before the complaint was filed on September 12, 1960, seven months after the checks were dishonored by the drawee bank. Since the defendant denied any demand at the time the checks were returned to him, and the record is otherwise barren of any evidence of demand within seven days, or any reasonable time, after endorsement, the plaintiffs did not establish any right to recover even if they had been holders in due course.

2. The plaintiffs are not holders in due course. Dluge gave the checks to the defendant without any demand for payment, so far as the record shows, and was not in possession of them when the suit was brought. Therefore he was not the holder. "'Holder' means a person who is in possession of a document of title or an instrument or an investment security drawn, issued or indorsed to him or to his order or to bearer or in blank." U. C. C., § 1-201(20). A fortiori, he was not a holder in due course. U. C. C., § 3-302(1).

The plaintiffs argue that they may nevertheless recover from the defendant, as the endorser of a "lost" check owned by them, under § 3-804 of the Uniform Commercial Code. This section provides: "The owner of an instrument which is lost, whether by destruction, theft or otherwise, may ...


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