Torrance National Bank v. Ætna Casualty & Surety Co.

Torrance National Bank, a corporate citizen of the State of California, instituted this action against The Aetna Casualty & Surety Company, a corporate citizen of the State of Connecticut, in the Superior Court of the State of California. Defendant procured removal to this Court pursuant to Title 28 U.S. C.A. § 1441(a) (Diversity of citizenship).

Plaintiff seeks to recover upon a Bankers’ Blanket Bond and a rider thereto 1 the loss it sustained in a transaction bottomed upon a worthless check. The parties do not dispute that the law of *639 California is applicable, and that there is no right of recovery upon the bond unless the check is a “forgery.”

Enesco Federal Credit Union, a depositor of plaintiff Bank, had since 1949 employed one Joseph Alden as its Treasurer. By both the Act 2 under which Enesco was incorporated and a Resolution of its Board of Directors (a copy of which was furnished to plaintiff), Alden was authorized to sign all the checks of the corporation. In addition to managing the affairs of Enesco, Alden during this period operated a paycheck cashing service upon his employer’s premises for his own profit. In order to obtain the necessary funds for this…