107 Mo. 402 | Mo. | 1891
On the seventeenth day of December, 1885, a man calling himself John Whitney presented to the paying teller of defendant bank the following letter:
“Citizens’ Bank oe Nevada, ) Nevada, Mo., 12-16-85. )
“ To Bank of Commerce, Kansas City, Mo. :
“This will introduce to you Mr. John Whitney, who holds our certificate of deposit for $350 of this date. He will want to draw the money there. Below we give his signature for identification.
“ Yours truly,
“John Wi-iitney. O. K. Caldwell,
“Cashier.”
Whitney, when at the bank, acted in the ordinary way, and there was nothing about his manners or looks that attracted the attention of the officers of the bank. He left the certificate of deposit for $350, receiving $50 cash, and a credit for the balance. He rented a room on Main street in Kansas City. On the twentieth day of December he advertised in the Kansas City Times for a book-keeper and on the twenty-second of that month one H. P. Brown, who went to that city in October in the same year, applied to Whitney for employment. - When Brown reached Whitney’s office it was wholly unfurnished, but on the same day Whitney bought a table, two chairs and some writing material. Brown was employed at $15 per week and expenses while away. Whitney informed him that he had ordered office furniture from Chicago and took him to the defendant’s bank and introduced him
“$4,000.
“United States National Bank oe Omaha, 1 “ Omaha, Nebraska, December 21, 1885. f *
“If duplicate unpaid, pay to the order of John Whitney $4,000, in current funds.
“-M. T. Barlow,
“ Cashier.
“ To Northwestern National Bank, Chicago, III.
“No. 211,573. pp. C. Will Hamilton.
“ (Indorsed). John Whitney.”
with direction to deposit it in the defendant bank, which was done and the amount, $4,000, duly placed to the credit of Whitney.
Defendant immediately indorsed this draft as follows:
“Pay Metropolitan National Bank, Chicago, or order for collection, for account of the bank of Comrnerce of Kansas City, Missouri.
“C. J. White,
“ Cashier.”
The items paid by plaintiff on the twenty-sixth through the Chicago clearing house were fourteen hundred and twenty-five in number, amounting to nearly $442,000. Its average daily clearing was about $300,000; while the entire amount paid daily through the clearing house was about eight and one-half millions. '
The clearings are made at eleven A. h., and the items are received by the bank as soon as the messenger can make the exchanges and get back, which takes about half an hour. The items cannot be examined at the
On December 26, plaintiff paid thirty-one other drafts of the Omaha bank. The §4,000 was charged to this bank, and was sent to it, in the regular course, with other vouchers on January 4. On the eleventh said bank, by letter and wire, notified the plaintiff of the forgery. The telegram was received too late, so that notice was not given the Metropolitan Bank until the next day. Plaintiff through that bank at once gave notice to defendant. The forgery was a very dangerous one; the officers of the Omaha bank, as well as the clerk, whose name was signed to the draft, at first thought it was genuine. They say it must have been lithographed on the original plate of their drafts.
There was evidence showing that the channel through which a draft is presented for payment makes a difference with respect to inspection, that, in dealing with responsible parties, their prudence and care is relied upon; that a draft paid through the clearinghouse does not receive as close inspection as when presented over the counter by the payee. The evidence also tended to show that the letter of the cashier of the Nevada bank was a sufficient identification of Whitney to justify a prudent bank to deal with him in the ordinary course of business.
Whitney was traced by detectives to New York, where it was ascertained he had been sent to the penitentiary for five years from Rochester in April, 1886, for forgery. It was learned his true name was David Lynch, but he was sent to the penitentiary under the name of George Edmonds. Whitney left $550 to his credit in the defendant bank, of which the plaintiff received $280, and the New York bank $270.
Before proceeding to analyze the evidence to determine whether the court erred in forcing plaintiff to a nonsuit we will take our legal bearings and ascertain the principles of law we must apply to the facts in the •case.
The general rule is that the drawee of a bill of exchange or draft is bound to know the handwriting of his customer, the drawer, and if he pays a bill or draft in the hands of a bona fide holder, for value, he is con•cluded by the act although the bill or draft turns out to be a forgery. This rule was first announced by Lord Manseteu) in Price v. Neale (1762), 3 Burrows, 1354, and has been followed and approved by the English courts, and an overwhelming majority of the American courts, including the surpeme court of the United States and of this state. Bank v. Bank, 18 N. Y. Supp. 411; Bank v. Tost, 11 N. Y. Supp. 862; Stout v. Benoist, 39 Mo. 277, and cases cited; 4 Harvard Law Review, 297. See 3 Am. & Eng. Ency. of Law, 222, where the English and American authorities are collated.
It is also well settled that an Indorsement of a draft for collection limits the effect which would have been given to a general or blank indorsement, and warns parties dealing with it, that there is no intent to transfer the ownership or proceeds of the draft. Bank v. Company, 70 Mo. 643; Bank v. Company, 4 Mo. App. 200, and cases cited.
With these legal principles for our guide, let us .see if the defendant was a bona fide holder for value of the draft of $4,000, at the time the plaintiff paid it. If it was, the loss must fall on the latter. It is conceded
We find nothing in this record to show that defendant’s officers knew anything or saw anything to arouse their suspicions as to Whitney or to cause them
Let us next inquire whether it was the holder of this draft at the time it was paid by' plaintiff on December 26, 1885. If the principle of law we have announced above, that an indorsement of a draft “for ■collection” does not transfer the ownership or proceeds thereof, be correct, this branch of the case will require but little discussion. This draft was indorsed by ■defendant “for collection,” and, when the Metropolitan National Bank presented it to plaintiff for payment, it presented it as the agent of defendant, and plaintiff was •bound to know this by the very form of the indorsement itself. The plaintiff knew, when it paid the draft, that the proceeds were to go to defendant. Hence it cannot now say that it thought the defendant had .negotiated the draft, parted with the title to it with the
The form of the defendant’s indorsement distinguishes this case from a number of cases, of which Bank v. Bank, 106 Mass. 444, is a type, where third persons take drafts and give them currency by indorsing them in blank. Defendant by its indorsement in this case warned plaintiff that it was not intended to transfer the ownership' of the draft or its proceeds, and hence the defendant did not' guarantee the genuineness of the signature of the drawer, but it did guarantee that the payee’s signature was genuine ; and it was genuine. It is true the payee’s real name was not Whitney, but the payee of the draft was in fact the person who went by the name of Whitney, and this person did in fact indorse the note; i. e., this draft was not payable to one person and indorsed by another, but was payable to and indorsed by the same person. If, therefore, plaintiff paid the draft more readily and with less investigation and inquiry, because a reputable bank presented it for payment, than it would have otherwise done, it will, nevertheless, have to bear the loss.
The defendant owed plaintiff no duty. It simply presented for payment a draft purporting to be. drawn by the Omaha bank, and. it was the duty of plaintiff to know, before paying it, that it was in fact made by the party who appeared to be the drawer, and. having failed to perform this duty, it cannot be heard to complain. Here are two innocent parties upon one of which this loss must fall. The argument that defendant’s conduct in taking the draft was not induced or controlled or affected by plaintiff should have no influence in the determination of questions growing out of commercial transactions of the character involved in this controversy. The business of the world is transacted now almost wholly through banks and banking institutions by checks, drafts and bills of exchange. This system
We think it clear that plaintiff upon the pleadings and evidence in this case is not entitled to recover, and the judgment of the circuit court is accordingly affirmed.