come into possession of it without any fault on his part, and his situation would be rendered worse if compelled to refund than it was before receiving payment, the money cannot be recovered from him." 31 "To justify the payee in holding and retaining the money, the bank alone must have been negligent." The above rule is sustained by the States in the following order: 41 42 33 43 44 35 39 26 Illinois, 32 Kentucky, Louisiana,34 Maine, Maryland, Massachusetts,37 Minnesota,38 New Hampshire, New York, Ohio, Pennsylvania, 12 Texas, 3 Vermont, United States.*5 The rule is that, if "neither party has been negligent or both have been, then the bank can recover the money." § 211. Forged checks, bank paying. 9 46 The rule is settled that a bank which pays a check on a forged indorsement has no rights against the drawer. 31 Cyclopedia of Law and Procedure, Vol. 5, p. 546, and authorities there cited. 32 Quincy First Nat. Bank v. Ricker, 71 Ill. 439, 22 Am. St. Rep. 104. 33 Georgetown Deposit Bank v. Fayette Nat. Bank, 90 Ky. 10, 11 Ky. L. Rep. 803, 13 S. W. 339, 7 L. R. A. 849. 34 Levy v. Bank of America, 24 La. Ann. 220, 13 Am. Rep. 124; De Feriet v. Bank of America, 23 La. Ann. 310, 8 Am. Rep. 597; McKleroy v. Southern Bank, 14 La. Ann. 458, 74 Am. Dec. 438; Smith v. Mechanics', etc., Bank, 6 La. Ann. 610. 35 Neal v. Coburn, 92 Me. 139, 42 Atl. 348, 69 Am. St. Rep. 495; Belknap v. Davis, 19 Me. 455. 36 Commercial, etc., Nat. Bank v. Baltimore First Nat. Bank, 30 Md. 11, 96 Am. Dec. 554. 37 Dedham Nat. Bank v. Everett Nat. Bank, 177 Mass. 392, 59 N. E. 62, 83 Am. St. Rep. 286; Danvers First Nat. Bank . Salem First Nat. Bank, 151 Mass. 280, 24 N. E. 44, 21 Am. St. Rep. 450; Welch v. Goodwin, 123 Mass. 71, 25 Am. St. Rep. 24; National Bank of North America r. Bangs, 106 Mass. 441, 8 Am. Rep. 349; Gloucester Bank r. Salein The Bank, 17 Mass. 33; Young v. Adams, 6 Mass. 182; Belknap v. National Bank of North America, 100 Mass. 376, 97 Am. Dec. 105. 38 Germania Bank v. Boutell, 60 Minn. 189, 62 N. W. 327, 51 Am. St. Rep. 519, 27 L. R. A. 635. 39 Star F. Ins. Co. v. New Hampshire Nat. Bank, 60 N. H. 442. 40 National Park Bank v. New York Ninth Nat. Bank, 46 N. Y. 77, 7 Am. Rep. 310; Goddard v. Merchants' Bank, 4 N. Y. 147; Bank of Commerce v. Union Bank, 3 id. 230; Canal Bank v. Albany Bank, 1 Hill (N. Y.) 287. 41 Ellis v. Ohio Life Ins., etc., Co., 4 Ohio St. 628, 64 Am. Dec. 610. 42 Levy v. United States Bank, 4 Dallas (U. S.) 234, 1 L. Ed. 814, 1 Binn. (Pa.) 27. 43 Rouvant v. San Antonio Nat. Bank, 63 Tex. 610. 44 St. Albans Bank . Farmers', etc., Bank, 10 Vt. 141, 33 Am. Dec. 188. 45 United States Bank . Georgia Bank, 10 Wheat. (U. S.) 333, 6 L. Ed. 334; United States v. New York Nat. Park Bank, 6 Fed. 852. 46 Leavenworth First Nat. Bank v. Tappan, 6 Kan. 456, 7 Am. Rep. 568. discovery by the bank of its error makes no difference. The banker is bound to know the handwriting of its customer. If he pays a check which has been forged, the mistake is his. The rule is so well established, it seems almost unnecessary to cite cases in support of it. The question is one of importance, however, and has so frequently been discussed by the courts of the various States it is deemed advisable to here give the citation of cases treating upon this subject as presented by the Cyclopedia of Law and Procedure, Vol. 5, page 548: 47 54 49 30 California, Connecticut,48 District of Columbia, Georgia," Illinois, Iowa,52 Kentucky,53 Maryland, Massachusetts,55 Missouri, New York,57 Tennessee,58 Utah,59 United States,6 England, 61 56 60 Where a bank pays a check upon an indorsement made not by the true owner but by a person having the same name of the true owner, it must, when called upon, make good the amount to (the drawer) or the true owner. In the case of Graves v. The American Exch. Bank, 17 N. Y. 203, in discussing this question, the court holds that 47 Hatton v. Holmes, 97 Cal. 208, 31 Pac. 1131. 48 Bristol Knife Co. v. Hartford First Nat. Bank, 41 Conn. 421, 19 Am. Rep. 517. 49 Millard v. National Bank of Republic, 3 MacArthur D. C. 54. 50 Freeman v. Savannah Bank, etc., Co., 88 Ga. 252, 14 S. E. 577; Atlanta Nat. Bank r. Burke, 81 Ga. 597, 7 S. E. 738, 2 L. R. A. 96. 51 Chicago First Nat. Bank t. Northwestern Nat. Bank, 152 Ill. 296, 38 N. E. 739, 43 Am. St. Rep. 247, 26 L. R. A. 289. 52 German Sav. Bank r. Citizens' Nat. Bank, 101 Iowa, 530, 70 N. W. 769, 63 Am. St. Rep. 399. 53 Henderson Trust Co. v. Ragan, 21 Ky. L. Rep. 601, 52 S. W. 848; Rice v. Citizens' Nat. Bank, 21 Ky. L. Rep. 346, 51 S. W. 454. 54 Williams v. Drexel, 14 Md. 566. 55 Belknap v. National Bank of North America, 100 Mass. 376, 97 Am. Dec. 105. 56 J. M. Houston Grocery Co. t. Farmers' Bank, 71 Mo. App. 132. 57 Shipman v. State Bank, 126 N. Y. 318, 27 N. E. 371, 22 Am. St. Rep. 821, 12 L. R. A. 791; Citizens' Nat. Bank v. Importers', etc., Bank, 119 N. Y. 195, 23 N. E. 540; Corn Exchange Bank v. Nassau Bank, 91 N. Y. 74, 43 Am. Rep. 655; Thompson v. Bank of British North America, 82 N. Y. 1; Etna Nat. Bank . New York City Fourth Nat. Bank, 46 N. Y. 82, 7 Am. Rep. 314; Morgan v. State Bank, 11 N. Y. 404. 58 Jackson v. McMinnville Nat. Bank, 92 Tenn. 154, 20 S. W. 802, 36 Am. St. Rep. 81, 18 L. R. A. 663; Pickle v. Muse, 88 Tenn. 380, 12 S. W. 919, 17 Am. St. Rep. 900, 7 L. R. A. 93. 59 Brixen v. Deseret Nat. Bank, 5 Utah, 504, 18 Pac. 43. 60 Washington First Nat. Bank v. Whitman, 94 U. S. 343, 24 L. Ed. 229; United States 1. National Exchange Bank, 45 Fed. 163. 61 Roberts . Tucker, 16 Q. B. 560, 15 Jur. 987, 20 L. J. Q. B. 270, 71 E. C. L. 560; Beeman v. Duck. 12 L. J. Exch. 198, 11 M. & W. 251; Mead . Young, 4 T. R. 28, 2 Rev. Rep. 314. the bank is bound to ascertain that the person to whom it makes payment is the genuine payee or is authorized by him to receive it. The opinion of the court, which was written by Comstock, J., though confirmed by the judges is dissented to by Justice Roosevelt. The dissenting opinion is of sufficient importance bearing upon this question to justify a full citation: 6 "There were two persons of the name of Charles F. Graves. The drawer of the bill in question, directed the American Exchange Bank to pay $240 to the order of Charles F. Graves. Fredonia, N. Y.,' was the designated residence of the drawer, and New York' that of the drawees. The payee had no designation but his name; none at all events was given by the drawer. The bank in good faith paid the draft to a person presenting it with the indorsement of Charles F. Graves, a genuine indorsement, but not the indorsement, it is said, of the genuine Graves. Which of the two, under these circumstances, should bear the loss - the drawer who carelessly omitted all designation, or the drawees who innocently paid the wrong person in consequence of such omission? As between these parties, the loss, it seems to me, should fall on the former. Nor do I perceive that the payee, the quasi assignee of the drawer, occupies any better position than his assignor. Hurd was his debtor, and bought the draft to remit in payment of the debt. Hurd directed the form. He did nothing to supply the drawer's omission, but aggravated the error by another of his own; he mailed the draft to Charles F. Graves, La Salle, Illinois, intending it, he says, for Charles F. Graves, Mendota, Illinois, the two places being only fifteen miles apart. He candidly admits he made a mistake in directing the letter, and that he should have directed it to Mendota instead of La Salle.' He thus by his own act put the draft into the hands of the La Salle Graves, and held out the La Salle Graves as the real payee. Can he complain, then, that the Exchange Bank recognized his indorsement? Must they pay twice because he, after 'full warning,' as he admits, chose to be careless of his own interests? Or would it not be more just that he himself should pay the Mendota Graves to whom he confessedly was indebted, and whose debt confessedly was not discharged by this remittance to the wrong per son, and who swears that he never had possession of the draft, and never authorized any one to indorse his name upon it, and never authorized any one to take possession of it.' How, too, I would ask, with such a statement sworn to by him on the trial, can he maintain an action of trover, resting his complaint on the averment that he had been in possession' as the legal owner? "The judgment should be reversed." The Supreme Court of the State of California in the case of People v. Bendit, 111 Cal. 274, defines the crime of forgery and says: When the crime is charged to be the false making of a writing, there must be the making of a writing which falsely purports to be the writing of another. The falsity must be in the writing itself in the manuscript. A false statement of fact in the body of the instrument, or a false assertion of authority to write another's name or to sign his name as agent, by which a person is deceived and defrauded, is not forgery. 'There must be a design to pass as the genuine writing of another person that which is not the writing of such other person. The instrument must fraudulently purport to be what it is not." 62 § 212. Right of bank against presenter and owner of forged paper. "If the presenter owned the paper at the time of its payment, the money must be refunded on discovery of the forgery provided his condition has not in the meantime changed so as to render a payment unjust." 63 In the case of the Star Fire Ins. Co. v. New Hampshire Nat. Bank, 60 N. H. 442, the court says that "the drawee, who, without notice of any forgery, has paid a draft to the holder to whom it was negotiated, by the forged indorsement of the payee's name, may recover of the holder the money paid upon the draft." In the case of Birmingham Nat. Bank v. Bradley, 103 Ala. 109, in an action to recover money paid on a forged check, in the syllabus of said case, the reporter says: 62 People v. Cole, 130 Cal. 13. 63 Cyclopedia of Law and Procedure, Vol. 5, p. 549. "The payee of a check who indorses it, and receives the money thereon, guarantees the genuineness of said check to the indorsee, and as to the payee indorser the indorsee is under no obligation to discover its forgery; and if the check is forged, the indorsee may recover from such indorser the money paid him in an action of assumpsit. * * * "Where a forged check has been forwarded by an indorsee bank to the drawee bank for collection and the latter bank credits the forwarding bank with the amount of such check, without actually remitting the money, on discovering the forgery, the drawee bank can charge said amount back to the forwarding bank." The rule formerly prevailing that the banker must know the drawer's signature, and if it pays a forged check, must bear the loss as between it and the holder, is modified by the courts, and the rule which is now accepted is very clearly stated in the case of Danvers Bank v. Salem Bank, 151 Mass. 280. The court, in defining the rule in this case says: "In the case at bar, the plaintiff seeks to recover from the defendant the amount of a forged check in the name of one of the plaintiff's customers, for which it had given the defendant credit as money. "In the usual course of business, if a check purporting to be signed by one of its depositors is paid by a bank to one who, finding it in circulation or receiving it from the payee by indorsement, took it in good faith for value, the money cannot be recovered back on the discovery that the check is a forgery. It is presumed that the bank knows the signatures of its own customers, and therefore is not entitled to the benefit of the rule which in cases of forgery permits a party to recover back money paid under a mistake of fact as to the character of the instrument by which the fraud has been effected. This presumption is conclusive only when the party receiving the money has in no way contributed to the success of the fraud, or the mistake of fact under which the payment has been made. In the absence of actual fault on the part of the drawee, his constructive fault in not knowing the signature of the drawer and detecting the forgery will not preclude his recovery from one who took the check under circumstances of suspicion with |