During the last twenty-five years the courts with increasing frequencyhave been called upon to decide where the law ought to placethe loss when a bank pays a forged check and charges it to the accountof a depositor, believing that he drew the check as presented. Thebroad statement that a bank pays a check at its peril is so frequently metwith that it is likely to make the impression that a depositor enjoys animmunity from change in his legal relations to the bank, save as thebank pays checks that are in fact his orders. It is well settled, however,that the failure of a depositor to notify his bank after he knows,or ought to know, that it has paid a forged check and charged it to hisaccount, will, under some circumstances, result in undesirable financialconsequence to him, though its extent, as well as the basis upon whichit is imposed, are matters about which there is a variety of judicialopinion. It is proposed to examine herein the broad principle referredto above and seek to ascertain when and to what extent the depositor\u27sconduct subsequent to payment affects his legal relations to the bank.
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