Turnbull v. Bouyer — 25 N.Y. Super. Ct. 406

Majority

p. 406

Andrew Turnbull, plaintiff and respondent, vs. Mark Bouyer et al. defendants and appellants.

Headnote

1. The liability of second indorsers of a check is complete if the check be taken by the holder as a purchaser in good faith, or was indorsed voluntarily for the accommodation of any.one; notwithstanding a prior indorsement of the payees was a forgery.

2. The forgery of the names of the payees of a check, on the. faith of whose genuineness the holder will be presumed to have taken the check, dispenses with notice of its non-payment.

3. Where parties who receive a check voluntarily indorse it, and then allow the person from whom they received it to take it back and carry it away, with their names remaining upon the back of it uncanceled, thereby enabling him, on the faith of such indorsement and their responsibility, to obtain money upon it, they will be liable to the holder, notwithstanding a previous indorsement, of the names of the payees, was forged.

4. By putting their names on the back of a check, the indorsers give it currency. Even if the holder should have reason to believe that a prior indorsement was not genuine, they undertake, by their indorsement, if it is not, to pay what the holder has given for the check.

(Before Robertson, Ch. J., and Barbour and McCunn, JJ.)

Heard May 3, 1864;

decided June 18, 1864.

Appeal from a judgment rendered at a special term. The action was brought against the defendants as indorsers of a check made by Ball, Black & Co. on the Broadway Bank.for $453.70, dated Eeb.. 23,1863, anddndorsed by the defendants, and purporting to have been previously indorsed by the payees Kirhmonn & Holmes. The case shows a check drawn by Ball, Black & Co. on .the. Broadway Bank, to the order of Kirhmonn & Holmes, and delivered by Ball, Black & Co. to one Miaglia. That this Miaglia had purchased goods.of Ball, Black .& Co., and given them in payment a check of a much larger sum than the amount of the purchase, drawn by John S. Martin on the Ocean Bank, payable to the order of Eichmond & Holman, and purporting to be indorsed by them. That Ball, Black & Co. made their check for the difference, payable to the order of the payees of the first check, as they intended and supposed—but as they did not know the payee, they did

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not get the names exactly right. This first check of Martin’s had been enclosed and directed to the .payee, and by him deposited in a hotel' letter box. It was next seen in possession of Miaglia. Miaglia, as stated, passed it to Ball, Black & Co. and obtained their check. This check of Ball, Black & Co. Miaglia offered to the defendants, with the names of the payees thereon indorsed, in the purchase of some clothes. The defendants went with Miaglia to Ball, Black & Co., who pronounced it good, and offered, were it not certified, to cash it. The defendants then went to their own bank, (Pacific Bank,) indorsed the check themselves, in order to deposit it, and were about to deposit it, when the teller asked them if they knew the signature of the payees. They said they did not, and thereupon the teller advised them not to take it, and handed the check to Miaglia. Miaglia put it in his pocket, having the defendants’ indorsement, and went off with it, the defendants making no opposition. Miaglia then passed it to this plaintiff, who paid him fuff value for it. The plaintiff passed it to Dick & Fitzgerald, who presented it to the bank, and the bank paid it. ■ It was afterwards discovered that the indorsement of the payees was a forgery. ' Dick & Fitzgerald thereupon reimbursed the bank. The plaintiff reimbursed Dick & Fitzgerald, and demanded reimbursement of the defendants, which was refused. Hence this suit.

On the trial at special term, before Monell, J. the defendants’ counsel moved to dismiss the complaint, on the ground that the check sued upon is a genuine check of Ball, Black & Co., and the indorsers can only be made liable on showing that the check has been presented for payment and not paid, and that notice of presentation was given to the indorsers. Also upon the ground that the plaintiff sues for money had and received, and has failed to prove the defendants had received any money for the check, either from the plaintiff or any one else. The motion was denied, and the defendants excepted.

The judge charged the jury that the only question for them-to determine was, whether- the signature of the payees, in

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dorsed on the check of Ball, Black & Co., was .genuine, or a forgery. That there was nothing in the circumstances of the case calculated to put Mr. Turnbull upon inquiry as to the genuineness of the signature. Nor was there any thing in the discrepancy between the names of the payees of the check drawn by Mr. Martin, and the payees of the check drawn by Ball, Black & Co., which it was necessary for the jury to consider. The evidence was very clear that the check in question was drawn payable to the same payees named in the check by Martin; and, although they were differently spelt, yet the evidence was distinct that it was intended to draw the check to the order of the same firm. The evidence on the question of forgery was slight, but it was sufficient to go to the jury for their consideration; and if, upon the evidence, they came to the conclusion that the indorsement of the payees was forged, they should find a verdict for the plaintiff for the amount of the check, and interest. If they found the signature of the payees was genuine, they would 'find for the defendants.

The counsel for the defendants excepted to the charge.

The jury found a verdict for the plaintiff for $484.73. The . court directed the exceptions to be heard in the first instance at a general term.

N. A. Chedsey, for the appellants.

I. If the appellants could be held at aE, it would only be as indorsers, and after default of the bank to pay the check, and due notice to the appellants of such default to pay.

II. This case is different from that of a check when the name of the drawer is forged. In the case of the forgery of an indorsement and payment of money, the money paid by an innocent person can be recovered back from the person to whom it has been paid; in this case, nothing was ever paid to the defendants. The plaintiff received the check in order to secure the payment of a pre-existing debt, and, therefore, cannot recover against the defendants. (Holbrook v. Mix, 1 E. D. Smith, 154. Stalker v. McDonald, 6 Hill, 96 .)

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III. This action is founded upon a presumption that the appellant received money, which presumption was disproved.

IV. The respondent took the check under such circumstances as should have put a prudent and careful man on inquiry; and he, not having exercised ordinary care and vigilance, cannot shift his negligence to the appellants’ shoulders, (Gill v. Cubitt, 3 B. &. C. 466. Pringle v. Phillips, 5 Sandf. 157 .) The question of negligence is one for the jury to determine. (Goodman v. Harvey, 4 A. & E. 870.)

V. There was not sufficient evidence to prove that the indorsements on either check were forgeries, and the justice should not have allowed parol evidence as to the intended payees.

VI. The justice should have dismissed • the complaint on the grounds moved, and should have charged as requested by the appellants’ counsel.

W. H. Peckham, for the respondent.

I. Upon the facts the plaintiff is entitled to recover. The check was indorsed by Bouyer & Rontey, and they allowed the check, so indorsed, to go into the hands of Miaglia. They thus became indorsers as to all persons into whose hands the check should thereafter come without notice and for value. The act of indorsement amounts to a contract with every subsequent holder “ that the instrument itself and the antecedent signatures thereon are genuine.” (Story on Promissory Notes, §§ 135, 379, 380-387. Merchants’ Bank v. McIntyre, 2 Sandf. 431 . Canal Bank v. Bank of Albany, 1 Hill, 287 . Coggill v. Amer: Ex. Bank, 1 Comst. 113.) The indorsement of the payees being forged, this contract was broken so soon as made. The indorsement of the defendants being in blank, their contract is made with any person who may thereafter become the holder of the draft. (Story on Promissory Notes, § 138. Lovell v. Evertson, 11 John. 52 .) And the plaintiff having actually paid value for the note, is precisely the same in legal effect as though that payment had been made directly to the

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defendants.- The defendants, therefore, broke the contract they had made with the plaintiff, and are liable to him therefor.

II. The action is not brought for money had and received. It is founded on the defendants’ contract of the genuineness of the prior indorsements and the breach of that contract, and for the damage resulting from that breach, the defendants are liable. But even on the theory of money had and received, the defendants are liable, for the plaintiff did actually give value, and being a holder for value, the defendants, as between them, are charged with having received that value, or are estopped from denying that they received that value ; or, in other words, its actual receipt or non-receipt by them, becomes, as between these parties, immaterial.

III. There was no error in admitting evidence as to the first check drawn by Martin, and its deposit, &c. It was admitted only to show what parties were intended as payees in the check of Ball, Black & Oo., and was directly pertinent to that issue. Moreover, it could possibly have produced no harm to the defendants.

IV. There was no error in refusing the motion for a non-suit. Presentment and non-payment were not essential to the liability of the defendants. Their liability was fixed before either presentment or payment. Notice of the forgery was given, them so soon as discovered ; but, even had such notice been wanting, it would not have affected their liability. (Goddard v. The Merchants’ Bank, 4 Comst. 147.)

V. There was no error in refusing to charge the first request of the defendants. Miaglia obtained the check by false pretenses; but there is no pretense that he stole it. A party obtaining property by- false pretenses, can give title to an innocent purchaser. (Keyser v. Harbeck, 3 Duer, 373 .)

YI. There was no error in the refusal to charge the second request of the defendants. The contract of the defendants was simply a warranty of title, and that the instrument was what it purported to be. The genuineness of the signature of the payees is material only in so far as it is necessary to transfer the title, and as giving value to the instrument. If the sig

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nature, then, of the payees was not genuine, it matters not whether the forger thought one or another person to be the payee. It is sufficient if the person intended as payee has not indorsed. (Merchants' Bank v. McIntyre, 2 Sandf. 431 .)

.Moreover, the language of this request is so obscure as not to convey any certain meaning, and should therefore be disregarded. (People v. Jacques Monnais’ Transcript of 31 st March, 1864.)

VII. There was no error in the charge of the court. There was nothing whatever in the case to impute negligence to the plaintiff. He did no more than Ball, Black & Co., and the defendants. Even had he supposed or known the indorsement of " the payees to be a forgery, he would have had a right to take the check and rely on the indorsement of the defendants. (Erwin v. Downs, 15 N. Y. Rep. 575 .) The liability of the defend ants arises on contract and not on a tort. To screen them from liability, the plaintiff must also have known that the defendants were not indorsers for value, and of such knowledge or of facts sufficient to put the plaintiff on inquiry as to such character of defendants’ indorsement, there is no pretense.

VIII. Upon the pleadings and proofs there was no issue for the jury but the one as to the forgery.

By the Court,

The bank on whom the check in controversy was drawn, was entitled to recover from the persons to whom they paid it the amount thereof; in consequence of the names of the payees being forged thereon. (Canal Bank v. Bank of Albany, 1 Hill, 287 . Morgan v. Bank of State of New York, 11 N. Y. Rep. 404 . Graves v. American Exchange Bank, 17 id. 205.) Those persons, in turn, were entitled to reclaim from the plaintiff the amount paid by them to him for it. By such actual payment by him, he became the owner thereof again, "so far as the liability of the makers of all genuine indorsements after the payees is concerned. The forgery of the names of the payees, on the faith of whose genuineness the plaintiff is to be presumed to have taken the check, dispensed with notice of its non-payment.

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The liability of the defendants, as indorsers, is complete, if it was taken by the plaintiff, as a purchaser in good faith, for value, or they indorsed it voluntarily for the accommodation of any party.

The plaintiff took this check from a person named Miaglia, partly in payment of a previous debt due from the latter to him, but he advanced the residue in cash ; and thus became a purchaser for value. The defendants’ counsel, on the trial, requested the court to charge, “ that if Miaglia took the check indorsed by the defendants from them, without their consent and feloniously, then the defendants are not liable to the plaintiff,” which the court refused, and the defendants’ counsel excepted. The only evidence in relation to the mode of obtaining the indorsement of the defendants was that of the defendant Bouyer. He testified that after ascertaining the check to be genuine, he took it to a bank, and wrote the name of his firm, on it for deposit merely; he then added, “I handed it to the receiving teller; he asked me if I knew the name of the indorsers ; I said I did not; I knew ‘ the drawers,’ and they said the check was perfectly good. He told me not to take it; then Mr. Miaglia took the check and put it in his pocket, and he went off.” This did not constitute evidence of a felony. So far as the defendants were concerned, they allowed the party from whom they received the check to take it back, with their names voluntarily written and left upon the back of it. Ho false representations were used to induce them to put or keep their firm name upon it. They allowed such check to remain so indorsed, without remonstrance, and thereby enabled Miaglia, on the strength of their responsibility, to obtain money on it.

But it is claimed that the circumstances under which the plaintiff took the check, were such as ought to have created suspicions in the mind of any prudent person as to the rightful ownership of the check. This, of course, would be immaterial, if the defendants voluntarily lent their names to Miaglia, or permitted him to use them. But even if their indorsement was obtained by fraud, and there was evidence in the case to

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sustain such a charge, no such question was raised or requested to be left to the jury, and it is too late now.

I do not see how the liability of the defendants can be affected favorably to them by the fact of the forged prior indorsement of the payees’ names. By putting their names on the back of the check, they gave it currency, and even if the plaintiff had reason to believe that such prior indorsement was not genuine, the defendants undertook by their indorsement to be responsible that if it was not, they would pay what the plaintiff gave for the check.

On the trial,- the learned judge who presided charged the jury that the only question for them to decide was whether the signature of the payees, indorsed on the check, was genuine or a forgery. This was excepted to. He also charged that there was nothing in the circumstances of the case, to put the plaintiff upon inquiry as to the genuineness of the signature, to which an exception was taken, but which I look upon as wholly immaterial, for the reasons before given. So, too, the question of the discrepancy between the names of the payees of a previous check, and that for which they are in question was given, was equally immaterial. I do not think the first exception sufficient, even if there had been any other question to be passed upon by the jury, besides that stated ; the defendants’ counsel was bound, in such case, to suggest any question omitted, and ask the court to instruct the jury in regard to it. But in fact there was no other question; the defendants had voluntarily furnished Miáglia with their indorsement, and allowed him to retain it, and thereby became responsible for impositions practiced by him by means thereof, on a bona fide purchaser, and the plaintiff was such. I do not even find that any thing in the conduct or relation of Miaglia to the plaintiff when he gave the check, was calculated to create any suspicion in the mind of a prudent person. He had previously dealt with him, although he knew nothing of his business, position, character or antecedents.

I find no error committed in any of the rulings on the trial.-

The judgment should be affirmed, with costs.

Cases cited

Pringle v. Phillips 5 Sandf. 157 N.Y. Super. Ct. 1851-06-28 p. 409
Merchants Bank v. C. M'Intyre & Co. 2 Sandf. 431 N.Y. Super. Ct. 1849-04-07 p. 409, p. 411