Triffin v. Somerset Valley Bank

Facts

In October 1998, Defendant was notified that several individuals were cashing what appeared to be the company’s payroll checks. Defendant reviewed the checks and ascertained them to be counterfeits, as the individuals were not employed by the company and the company president did not write the checks or authorize anyone else to do so. Defendant’s president, Mr. Hauser, executed affidavits of stolen and forged checks at Somerset Valley Bank and stopped payment on the checks. The bank subsequently received more than eighty similar checks valued at over $25,000. Plaintiff was in the business of purchasing dishonored negotiable instruments and purchased eighteen of Defendant’s dishonored checks from four different check cashing companies, which specified Mr. Hauser as the drawer of the checks. Each company represented to Plaintiff that it had cashed the checks for value, in good faith, and without any notice of claims or defenses to the checks, and without any knowledge that they were unauthorized or forged. All eighteen checks bore Mr. Hauser’s facsimile signature stamp. Plaintiff sued Defendant to recover payment on the dishonored checks, arguing that he was a holder in due course.