Penn Bank v. Furness & Others was a United States Supreme Court case that dealt with the issue of whether a bank could be held liable for the negligence of its employees. The case arose when the plaintiff, Penn Bank, was sued by the defendants, Furness & Others, for negligence in the handling of their funds. The defendants alleged that the bank had failed to properly supervise its employees, resulting in the misappropriation of funds. The Supreme Court held that the bank could be held liable for the negligence of its employees. The Court reasoned that the bank had a duty to exercise reasonable care in the supervision of its employees, and that it had failed to do so. The Court also noted that the bank had a duty to act in good faith and with due care in the handling of its customers' funds. The Court's decision established that banks can be held liable for the negligence of their employees, and that they must exercise reasonable care in the supervision of their employees. This decision has been cited in numerous cases since, and has become an important precedent in the area of banking law.

In the case of Penn Bank v. Furness & Others, the Supreme Court was tasked with determining whether a bank could be held liable for failing to pay out on a check that had been fraudulently altered by an employee of the bank. The majority opinion found in favor of the defendants and ruled that banks are not responsible for such losses due to their lack of knowledge or control over fraudulent activities committed by employees. However, Justice Field dissented from this ruling and argued that banks should be held accountable when they fail to exercise reasonable care in preventing frauds perpetrated against them by their own employees. He reasoned that if banks were allowed to escape liability simply because they did not know about any wrongdoing then it would create an incentive for them to turn a blind eye towards potential criminal activity within their ranks instead of taking steps necessary to prevent it from occurring in the first place.