2 Neb. 29 | Neb. | 1873
“ When one has done a mercantile act,” says Lord Ch.
Rogers & Co., as bankers, well understood this, and demanded the indorsement of William T. Allen, but were deceived by a forgery. Unable to show the indorsement of Allen, and comprehending the futility of proceeding against Ware as the equitable assignees of Whiteman alias Allen, — when it must appear that he who forged the indorsement of the payee on the bill of exchange had likewise imposed a forged and worthless draft upon Ware in the purchase of it, —Rogers & Co. declare on the bill in question as payable to a fictitious payee, and therefore payable to bearer, relying on the circumstance that Allen had no interest in the bill to establish his character as fictitious pajme. That Allen never had any interest in the bill of exchange is undeniable. That there was such a person as William T. Allen, of the firm of Day, Allen, & Co., of Chicago; that such firm was understood by Ware to exist, and that he had made drafts in their favor; that he was requested to make this draft to the order of William T. Allen; and that he had in his mind the Allen who was
Among the first cases reported where this class of indorsement was considered is that of Tatlock v. Harris, 3 D. & E., 162. Harris drew a bill payable to Grigson & Co., and accepted the same, and gave it to Lewis & Potter, who indorsed it, in the name of Grigson & Co., to the plaintiffs. Harris defended on the ground that Grigson & Co. had not indorsed it. Lord Kenyon, Chief Justice, among other things, says, “ The necessary inference which the jury would have made was, that, at the time the bill was drawn, there were no such persons in existence as a Grigson & Co.; and that the fact was notorious to all the parties in the transaction, and particularly to the defendants in this cause. On these facts, what the conscience of the case is, no man can doubt; for it is extremely clear, that the defendant, who is now called upon to pay this bill, has received the value of it, and therefore ought, in conscience, to account for it. . . . This decision proceeds on the special circumstances of the case; namely, that the defendant, at the time of entering into his engagement, knew that there were no such persons as Grigson & Co., and that therefore, in point of formal derivation of title, that which is usually done could not be done in this ease. . . . The counts on which the judgment of this Court is given are those for money paid, and money had and received.”
The question of interest in the payee did not arise here ; but it will be remarked, that the decision of the
Several other cases arose about the same time (1786-1788). That most fully considered, and reported at great length, is Minet v. Gibson, 1 Henry Blackstone, 561. The effect of the determination in the House of Lords is given in Jacob's Law Dic., Bills of Ex., 5, 3, as follows: “ If a bill of exchange be drawn in the name of a fictitious payee, with the knowledge as well .of the acceptor as the drawee^ and the name of such uraWee be indorsed upon it by the drawer with the knowledge of the acceptor, which fictitious indorsement purports to be to the drawer himself, or his order, and then the drawer indorses the bill to an innocent indorsee for a valuable consideration, and afterwards the bill is accepted, but it does not appear that there was an intent to defraud any particular person, such innocent indorsee for a valuable consideration may recover against the acceptor as upon a bill payable to bearer. Perhaps also, in such case, the innocent indorsee might recover against the acceptor as on a bill payable to the order of the drawer, or on account stating the special circumstances.”
This is a leading case; but it affords little or no support to the position of the defendant in error. Several elements are wanting in the case under consideration which existed in that of Minet v. Gibson. It is sufficient to call attention to the fact, that the drawer there indorsed the name of the fictitious payee on the bill himself, — a circumstance, as we shall have occasion to notice hereafter, which went to fix his liability. Coggill v. American Ex. Bank, 1 N. Y., 113; Herrick v. Whitney, 15 Johns., 240.
Among the cases pressed upon the attention of this
Woodbury, J., says, “It appears, that though the whole interest of this note has ever been in the plaintiff, yet it was made payable to Moses, Foster or order. Hence he must claim through some person of that name who was intended as payee, if any particular person was so intended. But, the jury having found that no person in particular was intended as payee, no person was authorized to indorse it; because every negotiable note must be negotiated by the person (or his representative) to whom the note was made payable, and not by a person of the same name. 1 Hen. Bl., 607; Mead v. Young, 4 D. & E., 28. When a note, however, is made payable to the name of some person not having any interest, and not intended to become a party in the transaction, whether a person of such a name is or is not known to exist, the payee may be deemed fictitious. The name is assumed merely to give form to the instrument. In such case it has been ad
“We are inclined to adopt this construction, in order to prevent the note from becoming a nullity when founded on a full and fair consideration. Such construction injures nobody, and is no more forced than to hold, that, when the name of the payee is left blank, it is the same thing as if the defendant had made the bill payable to bearer. Cruchly v. Clarence, 2 Maul & Selew, 91. But, to enable the plaintiff to recover under this view of the case, a new count must be filed, and, for that purpose, the verdict be set aside, and the cause stand open for a new trial. On that trial, the facts can be more fully investigated as to the person actually intended as payee in the note.”
This is, perhaps, as strong a case as can be found: still a careful reading of it will discover a marked difference between it and the one under consideration. In the one, the payee not only never had any interest in the bill, but was not particularly intended as payee: in the other, a particular payee was designated. That the
Pease demurred, “ because it is not averred in said count that Walter Chester, one of the joint payees of the said promissory note described in said count, ever indorsed or delivered the same to the said plaintiff or any other person whatever.”
Mr. Justice Wayne says, “ . . . The point is, whether
“ It would be really going very far to say that the statute giving the indorsee a right of action for such a sum of money, either against the person signing such note or against any of the persons who indorsed the same, did not mean to be exercised, because a person’s name was upon the face of the paper who never had been a party to it. No such a decision has been made. It may be because no case of this kind has ever occurred before. We can find none like it. In the absence of all authority against our conclusion, we must take upon ourselves the responsibility of announcing it as an original application of the statute to that case, and for any case of like kind which may occur, without intending to go further.”
This case also differs widely from the one at bar. When John Chester drew the note payable “ to the order of Walter Chester, and Pease, Chester, & Co.,” his intention, no doubt, was to secure the indorsement of Walter Chester. But the note did not become operative till it was negotiated or put into use. Catlin v. Gunter 11 N. Y., 368. When that transpired, all design of having Walter Chester become a party to the note had been dismissed, and it was so understood by all the parties to the transaction. His name was occupying but a space on the paper, when, to conform to the un
The case of Hortsman v. Henshaw et al., 11 How. U. S., 177, cited on the same side, will be found to proceed upon reasoning which has no place in the case before us. There Fiske and Bradford, a mercantile firm in Boston, drew their bill of exchange upon Hortsman of London, to the order of Fiske and Bridge. The drawers, or one of them, placed the bill in the hands of a broker, with the names of the payees indorsed upon it, to be negotiated; and it was sold to the defendants in error, bona fide, and for full value. It was accepted, and paid at maturity. It turned out that the indorsement was forged; by whom it does not appear. Shortly afterwards the drawers became insolvent, and the drawee brought this action against the defendants to recover back the money paid: it was held that he could not recover. It is unnecessary to repeat the opinion given by Chief Justice Taney. The point made is, that the drawers, having put the bill in circula
With the case of Coggill v. The American Exchange Bank, supra, I will have noticed the principal cases relied on by the defendant in error. This case is very much like the last. Shapley & Billings (through the wrong of one of them) drew a bill, in the name of the firm, on the plaintiff, for fifteen hundred dollars, payable to the order of Truman Billings. The name of Truman Billings, as well as that of Truman Billings, jun., was forged on the back of the bill; and it was passed by one of the firm to the Bank of Central New York for discount, and was cashed without any suspicion of the forgery. This bank-indorsed the draft, and sent it to the defendant for collection. The American Exchange Bank collected it of the plaintiff, who, learning of the forgery, and the absconding of one of the firm of Shapley & Billings, brought his action to recover the amount paid the defendant, upon the ground that the defendant got no title to the bill through the forgery. . As in the pase of Hortsman v. Henshaw, supra, the Court holds, that, inasmuch as Shapley & Billings negotiated the bill with the names of the payees indorsed, they affirmed the genuineness of the signatures; and, upon the plainest principles for maintaining honesty and fair dealing, they would have been estopped from controverting it. Coggill, the acceptor, deriving his title through those who could maintain an action against Shapley & Billings, must look to
“The point had been adjudged, that, when the maker of a promissory note puts it into circulation with a forged indorsement of the name of the payee upon it, a bonar-jide holder may sue, and recover against the maker, as upon a note payable to bearer (Fort v. Meacher, 3 Hill’s S. Car., 227, and Riley’s Law Case, 248) ; and the same rule has been applied where the payee had no interest in the note, and it was not intended that he should become a party to the transaction. Foster v. Shattuck, 2 N. H. Rep., 446. Notwithstanding what was said in Sana v. Underwood, 19 Pick., 99, I think this sound doctrine; and it is applicable to the case of a bill put into circulation by the drawer with a forged indorsement upon it, — a bond-fide holder may treat it as a bill payable to bearer.” This case is wholly unlike the one we are considering, going more particularly on the ground that the drawers negotiated the bill with the payee’s name, or what was taken to be the indorsement of the payee, upon it. But what is here said by this learned jurist concerning the want of interest in a payee, that will authorize a recovery as upon a hill payable to bearer, is qualified, in common with all cases of the ;kind,'•with; the further con
Passing from authority to what is urged as the reason of the case, it is submitted, whether it is reasonable to insist upon the indorsement of him who has no interest or motive to indorse the draft, and who could not ever be compelled so to do; and whether, having issued a draft in proper form, but to the order of a payee who had no interest in it, as he well knew, Ware should not be held to the same liability as though he had known the payee to be purely a fiction; and that he designed to pay some one the amount of the draft, and as Allen is shown to possess no interest in it whatever, Ware should not object to paying it to him who has paid full value for it. This is somewhat plausible, but, as a matter of conscience, would be greatly enforced if it could be truthfully added, that Ware had received a consideration for the draft. Were this the fact, I apprehend the law is not wanting in ways in which Rogers & Co. might obtain a return of the money they have advanced. In order to exclude proof that the fact is otherwise, they were forced to rest their rights, if any, upon the rules of commercial law governing negotiable paper. These rules may not always work complete justice; but a regard for the confidence and security which should obtain in mercantile transactions of this kind demands their rigid application when a proper case arises. Ware’s engagement, when he executed and delivered the bill in question, was to pay to the order of William T. Allen, unless Allen was a fictitious person. Whether he might not as well pay to Rogers & Co. is not the question. He can rely upon the letter of his obligation; and, if this is kind to him,
“ It is impossible for us to treat these checks as payable to bearer or to a fictitious person. As the payees are real persons, the presumption of law is that the checks were drawn Avith the intent of vesting the title in them, and them alone. Consequently it was only from them that a title could be derived, and only be a title given by them, and evidenced by their indorsement that a valid payment could be made. As the checks were never delivered to them, and they were not the holders of them at any time for value or otherwise, it seems to us a necessary inference that it Avas by the fraud of some third person that the checks were obtained and put into circulation. The loss resulting from this fraud the defendants must sustain, and, against its perpetrator, must seek their remedy.
“ The supposition that the plaintiff delivered the checks to some third person, to whom he gave authority to put them into circulation by indorsing the names of the payees, is something worse than gratuitous. We reject it wholly: there is no proof of such delivery, and the plaintiff could give no such authority; and assuredly Ave will not impute to him, in order to protect the defendant, the design of enabling a third person, by means of a forgery, to effect a fraud.” '
In the rulings upon the trial, there was error; and the judgment must be reversed, and a new trial ordered.
Judgment reversed, and a new trial ordered.