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(207 Ala. 527, 93 So. 416.) person entitled to the money may re- plaintiff's ownership. Shaffer v.

cover it in an ac- McKee, 19 Ohio St. 526, is a case in -money had and received-when tion for money had point. There a draft payable to

and received, and plaintiff's order, and mailed to him, this although he knows nothing of was stolen en route, and the thief, the party who has the right; the having forged plaintiff's indorselaw itself creates the privity and ment, sold the draft to the defendthe promise. Hitchcock v. Luk- ant, who in good faith collected the ens, 8 Port. (Ala.) 333. This is money from the drawee, and approthe settled law of this state. Farm- priated it to his own use. Upon ers' Bank & T. Co. v. Shut, 192 these facts it was held that plaintiff Ala. 53, 68 So. 363. But the defend- was entitled to recover. Farmer v. ant must have money, or its equiv- People's Bank, 100 Tenn. 187, 47 S. alent (192 Ala. 53, 68 So. 363), in W.234, also, is squarely in point. his possession which belongs of Appellee cites Crawford v. Barkright to the plaintiff (Levinshon v. ley, 18 Ala. 270, to the proposition Edwards, 79 Ala. 293). It is not that “appellant cannot ratify the denied that a forged indorsement delivery to the impostor, and take passes no title; but plaintiff must under that.” That case holds only recover on the strength of his own that the principal cannot of his own title. To repeat, the question, then, mere authority ratify a transaction is whether plaintiff had any legal in part and repudiate it as to the right to the check or its proceeds. rest. We see no inconsistency. Steiner Bros. v. Clisby, 103 Ala. 181, Plaintiff adopts the act of defend15 So. 612. The foregoing are state- ants in collecting the money, but dements of the familiar law of this nies defendants' title. A similar jurisdiction; they are reiterated contention was decided against aphere on account of some discord in pellee in Bobbett v. Pinkett, L. R. 1 the briefs.

Exch. Div. 368, 45 L. J. Exch. N. S. It remains to determine whether 555, 34 L. T. N. S. 851, 24 Week. the fact that the check failed to Rep. 711.

Rep. 711. In Branch Bank v. Sydreach the hands of plaintiff is fatal nor, 7 Ala. 308, cited by appellee, the to his recovery. In the circum- ruling was that an agent cannot sue stances stated, it may be thought unless there was an express promise hard that defendants, if they were to him as such, or unless he has an duly cautious, should be liable at all; interest in the subject-matter of the but on the law and the facts hereto- suit. No such question arises in this fore recited, it is entirely clear that case. defendants had no property in the

We do not doubt that the payee check, have none in may not maintain a suit against the Bids and notes- the proceeds, and

drawer without showing a delivery liability of one cashing check are liable to be sued by the latter to the former with inon forged in

by somebody for the tent to pass title. Appellee cites au

money which they thorities to that effect. They prove have received. Moreover, if plain

Moreover, if plain- nothing in this case. At this point tiff is allowed to recover from de- appellee sticks too closely to the fendants, his election will put an end check or draft; we consider the to the matter, for the drawer of the question of liability for the money check intended it for plaintiff, and that appellee got from appellant or defendants, however innocently, re- its agent, the St. Louis bank. ceived the money as upon plaintiff's Rushville v. Rushville, 39 Ill. App. indorsement, and, but for their in- 503, cited by appellee, may be distermeddling, however innocently, it criminated from the case at bar. In

would have reached that case no wrong, other than the -right of true

plaintiff. There- acceptance of money paid by mutual

fore, defendants do mistake, could be attributed to denot appear to be in a position to deny fendant in the receipt of the money

dorsement.

owner to maintain action.

in suit. The court denied plaintiff's Anderson, Ch. J., and Gardner and claim on the ground that there was Miller, JJ., concur. no privity. 4 Cyc. 322; 5 C. J. 1382.

Petition for

for rehearing denied We have stated the law of this state

May 18, 1922. on that subject. Our best judgment is that it was

NOTE. the duty of defendants upon demand -sufficiently shown by this action- The right of the owner of a check

to pay the money Assumpsit-to

against one who cashes it on a forged recover proceeds over to plaintiff, or unauthorized indorsement and of check.

and therefore that procures its payment by the drawee common assumpsit will lie for its is the subject of the annotation folrecovery.

lowing MERCHANTS' BANK v. NATIONAL Reversed and remanded.

CAPITAL PRESS, post, 1068.

MERCHANTS' BANK of Washington, D. C., Appt.,

V.
NATIONAL CAPITAL PRESS.

District of Columbia Court of Appeals - April 3, 1923.

(53 App. D. C. 59, 288 Fed. 265.) Bank — checks paid on forged indorsements — liability.

A bank which cashes checks on forged indorsements and collects them from the drawee is liable for their amount to the payee.

[See note on this question beginning on page 1068.]

APPEAL by defendant from a judgment of the Supreme Court of the District of Columbia in favor of plaintiff in an action brought to recover the amount of certain checks, payable to its order and cashed by defendant on forged indorsements. Affirmed.

The facts are stated in the opinion of the court.

Argued before Van Orsdel, Asso- Buckley v. Second Nat. Bank, 35 N. ciate Justice, and Martin and Smith, J. L. 400, 10 Am. Rep. 249; Talbot v. Judges of the United States Court of Bank of Rochester, 1 Hill, 295; JohnCustoms Appeals.

son v. First Nat. Bank, 6 Hun, 124, afMessrs. Joseph A. Rafferty and P. firmed without opinion in 68 N. Y. 616; H. Marshall, for appellant:

Schaap v. First Nat. Bank, 137 Ark. The payee of a check cannot sus- 252, 208 S. W. 309; Meyer v. Rosentain an action against a stranger bank, heim & Co. 115 Ky. 409, 73 S. W. 1129; which has cashed the check for ac- Salomon v. State Bank, 28 Misc. 324, commodation of a person claiming 59 N. Y. Supp. 407; United States title through a forged indorsement. Portland Cement Co. v. United States

First Nat. Bank v. Whitman, 94 U. Nat. Bank, 61 Colo. 334, L.R.A.1917A, S. 343, 24 L. ed. 229; Tibby Bros. Glass 145, 157 Pac. 202; Graton & K. Mfg. Co. v. Farmers & M. Bank, 220 Pa. 1, Co. v. Redelsheimer, 28 Wash. 370, 68 15 L.R.A.(N.S.) 519, 69 Atl. 280; J. M. Pac. 879; Kansas City Casualty Co. Houston Grocer Co. v. Farmers Bank, v. Westport Ave. Bank, 191 Mo. App. 71 Mo. App. 132.

287, 177 S. W. 1092; Buena Vista Oil Messrs. James A. Drain and Dale D. Co. v. Park Bank, 39 Cal. App. 710, Drain, for appellee:

180 Pac. 12; Farmer v. People's Bank, The owner of a check may maintain 100 Tenn. 187, 47 S. W. 234; Indiana an action for money had and received Nat. Bank v. Holtsclaw, 98 Ind. 85; against a bank which cashes the check Shaffer v. McKee, 19 Ohio St. 526; on a forged indorsement and then col- Knoxville Water Co. v. East Tennessee lects it from the drawee.

Nat. Bank, 123 Tenn. 364, 131 S. W. (53 lpp. D. C. 59, 288 Fed. 265.) 447; Crisp v. State Bank, 32 N. D. 263, and, in turn, no title to the money 155 N. W. 78; Hamlin's Wizard Oil collected upon the checks. Co. v. United States Exp. Co. 265 Ill. If the drawee banks had refused 156, 106 N. E. 623, 7 N. C, C. A. 638;

to cash the checks, a different case People v. Bank of North America, 75

would be presented. Plaintiff would N. Y. 547; Robinson v. Chemical Nat. Bank, 86 N. Y. 404; A. Blum Jr's

then have recourse against its cusSons v. Whipple, 194 Mass. 253, 13

tomers, the drawers of the checks, L.R.A.(N.S.) 211, 120 Am. St. Rep. 553,

whose funds in the drawee banks, 80 N. E. 501; Bristol Knife Co. v. against which the checks were First Nat. Bank, 41 Conn. 421, 19 Am. drawn, would still be intact. PlainRep. 517; Standard Steam Specialty tiff, however, by collecting from the Co. v. Corn Exch. Bank, 220 N. Y. 478, drawee banks, foreclosed the right L.R.A.1918B, 575, 116 N. E. 386; 1 of action by plaintiff against the Morse, Banks & Bkg. 5th ed. § 284, p. drawers of the checks. 491; 3 Randolph, Com. Paper, 2d ed. 8

The checks, when received and col1469; United States Portland Cement

lected by defendant, were the propCo. v. United States Nat. Bank, 61 Colo. 334, L.R.A.1917A, 145, 157 Pac.

erty of plaintiff, and plaintiff's title 202; Schaap v. First Nat. Bank, 137

therein could not be defeated by a Ark. 251, 208 S. W. 309.

forged indorsement. Plaintiff's title Van Orsdel, Associate Justice, de

remained the same as it was before livered the opinion of the court:

the forgery was committed; hence, By declaration in the common

when defendant received the money counts, appellee sued appellant in

on the checks, it had

Bank-checks

no more title to the paid on forged the supreme court of the District of Columbia for the amount of twenty- money than it had Indorsements

liability. two checks, payable to the order of

to the checks, and plaintiff, which were cashed by de- plaintiff could recover the amount fendant bank. The bookkeeper of

collected on the checks in an action plaintiff extracted the checks from

for money had and received. This the mail, credited the accounts of

rule is sustained generally in the the customers from whom they were

states, and we have not been cited to received, indorsed the checks in

any Federal authority to the conplaintiff's name, cashed them at de

trary. Buckley v. Second Nat. Bank, fendant bank, and appropriated the

35 N. J. L. 400, 10 Am. Rep. 249; proceeds to his own use. The checks

Talbot v. Bank of Rochester, 1 Hill, were collected by plaintiff from the

295; Johnson v. First Nat. Bank, 6 respective banks on which they were

Hun, 124; Schaap v. First Nat. Bank, drawn. It is conceded that the book

137 Ark. 252, 208 S. W. 309; Meyer keeper had no authority to indorse

v. Rosenheim & Co. 115 Ky. 409, 73 and cash the checks. From a ver

S. W. 1129; United States Portland dict and judgment for plaintiff, de

Cement Co. v. United States Nat. fendant appealed.

Bank, 61 Colo. 334, L.R.A.1917A, The liability of defendant bank to

145, 157 Pac, 202; Graton & K. Mfg. plaintiff for the aggregate amount

Co. v. Redelsheimer, 28 Wash. 370, of the checks is the single question

68 Pac. 879; Kansas City Casualty involved. Counsel for defendant Co. v. Westport Ave. Bank, 191 Mo. seeks to establish analogy to the set- App. 287, 177 S. W. 1092; Buena tled principle that the holder of a

Vista Oil Co. v. Park Bank, 39 Cal. check cannot maintain a suit against

App. 710, 180 Pac. 12; Farmer the drawee bank. National Bank v. v. People's Bank, 100 Tenn. 187, 47 Millard, 10 Wall. 152, 19 L. ed. 897; S. W. 234; Indiana Nat. Bank v. First Nat. Bank v. Whitman, 94 U. Holtsclaw, 98 Ind. 85; Hamlin's S. 343, 24 L. ed. 229. But the suit Wizard Oil Co. v. United States Exp. here is not against the drawee bank, Co. 265 Ill. 156, 106 N. E. 623, 7 N. but against one who acquired no title C. C. A. 638; Shaffer v. McKee, 19 to the checks obtained from a de- Ohio St. 526; A. Blum Jr's Sons v. faulter upon his forged indorsement, Whipple, 194 Mass. 253, 13 L.R.A. (N.S.) 211, 120 Am. St. Rep. 553, 80 the agent's authority. This, howN. E. 501; Bristol Knife Co. v. First ever, implied liability on the part of Nat. Bank, 41 Conn. 421, 19 Am. the bank if the agent should be Rep. 517.

found to have been without authoriSimilar cases have been before ty to indorse the checks. Here the this court. In Crane v. Postal Teleg. lack of authority of the bookkeeper Cable Co. 48 App. D. C. 54, an action

was not only found by the jury, but for money had and received was

it is conceded. A like inference is brought by the payee of checks

deducible from our decision in Indiagainst the bank which cashed them on the indorsement of plaintiff's

ana Flooring Co. v. District Nat. agent. The court below directed a Bank, 51 App. D. C. 391, 280 Fed. verdict in favor of plaintiff. The

522. judgment was reversed for failure The judgment is affirmed, with to submit to the jury the question of costs.

ANNOTATION. Right of owner of check against one who cashes it on a forged or unauthorized

indorsement and procures its payment by drawee.

I. Introduction, 1068.

Alabama.—ALLEN V. M. MENDELII. Majority rule:

SOHN & SON (reported herewith) ante, a. In general, 1068.

1063. b. Theory, 1070.

Arkansas. Schaap v. First Nat. c. As affected by question of deliv

Bank (1918) 137 Ark. 252, 208 S. W. ery to payee, 1071.

309.
d. Application to various states of
fact, 1073.

California.—Buena Vista Oil Co. v. III. Minority rule, 1074.

Park Bank (1919) 39 Cal. App. 710,

180 Pac. 12. 1. Introduction.

Colorado.- United States Portland The right of the owner of the check

Cement Co. v. United States Nat. Bank against the drawee bank is discussed

(1916) 61 Colo. 334, L.R.A.1917A, 145, in the annotation in 14 A.L.R. 764. 157 Pac. 202. The present annotation is confined

District of Columbia.-MERCHANTS' to the right of the owner of a check BANK v. NATIONAL CAPITAL PRESS (reagainst one who cashes it and collects ported herewith) ante, 1066. from the drawee. The defendant in

Illinois.—Hamlin's Wizard Oil Co. these cases is usually a bank, but, as

v. United States Exp. Co. (1914) 265 will be seen hereinafter, the same Ill. 156, 106 N. E. 623, 7 N. C. C. A. principles have been applied where a

638; Independent Oil Men's Asso. V. corporation or an individual not en

Ft. Dearborn Nat. Bank (1924) 311 gaged in the banking business cashes

Ill. 278, 142 N. E. 458; Lindenthal v. the check and procures its payment. Northwest State Bank (1921) 221 Ill. II. Majority rule.

· App. 145; Higgin Mfg. Co. v. Foreman

Bros. Bkg. Co. (1921) 222 Ill. App. 29. a. In general.

Indiana. Indiana Nat. Bank v. According to the general rule, a Holtsclaw (1884) 98 Ind. 85. bank or other corporation, or an in- Kansas.-Hope Vacuum Cleaner Co. dividual, who has obtained possession v. Commercial Nat. Bank (1917) 101 of a check upon an unauthorized or Kan. 726, 168 Pac. 870. forged indorsement of the payee's sig- Kentucky. - Meyer v. Rosenheim nature, and who collects the amount (1903) 115 Ky. 409, 73 S. W. 1129. of the check from the drawee, is liable Massachusetts.-A. Blum Jr's Sons for the proceeds thereof to the payee v. Whipple (1907) 194 Mass. 253, 13 or other owner, notwithstanding they L.R.A.(N.S.) 211, 120 Am. St. Rep. 553, have been paid to the person from 80 N. E. 501. whom the check was obtained.

Mississippi.—Thomas v. First Nat.

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V.

Bank (1911) 101 Miss. 500, 39 L.R.A. rected not to pay the amount to the (N.S.) 355, 58 So. 478.

local agent, is liable to the state agent Missouri. Kansas City Casualty for the sum so paid, notwithstanding Co. v. Westport Ave. Bank (1915) 191 the local agent had been receiving inMo. App. 287, 177 S. W. 1092.

surance premium checks payable to New Jersey. – Buckley v. Second himself and the state agent, and had Nat. Bank (1872) 35 N. J. L, 400, 10 been cashing these checks at the deAm. Rep. 249.

fendant bank and sending the state New York. Talbot v. Bank of agent his portion of the proceeds. Rochester (1841) i Hill, 295; People First Nat. Bank v. Patterson (1916) v. Bank of North America (1879) 75 Tex. Civ. App. 185. S. W. 1018. N. Y. 547; Robinson v. Chemical Nat. Upon the assumption that the cashBank (1881) 86 N. Y. 404; Standard ier of a branch office of a telegraph Steam Specialty Co. v. Corn Exch. company had no right to act for the Bank (1917) 220 N. Y. 478, L.R.A. company in indorsing checks payable 1918B, 575, 116 N. E. 386 (point under to the company and receiving cash annotation conceded); Johnson thereon from a bank, and that the First Nat. Bank (1875) 6 Hun, 124, bank's payment to the cashier was affirmed without opinion in (1877) 68 wrongful, it was held in Crane v. N. Y. 616; Schmidt v. Garfield Nat. Postal Teleg. Cable Co. (1918) 48 App. Bank (1892) 64 Hun, 298, 19 N. Y. D. C. 54, that if the bank was able to Supp. 252, affirmed without opinion in prove that the cashier had used the (1893) 138 N. Y. 631, 33 N. E. 1084; money for the benefit of his principal, Burstein v. People's Trust Co. (1911) the principal could not recover from 143 App. Div. 165, 127 N. Y. Supp. the bank. 1092; E. Moch Co. v. Security Bank The payee of a check was allowed to (1917) 176 App. Div. 842, 163 N. Y. recover of a bank which had cashed Supp. 277, affirmed without opinion the same upon an unauthorized inin (1919) 225 N. Y. 723, 122 N. E. 879; dorsement in Hinton Electric Co. v. Salomon v. State Bank (1899) 28 Misc. Bank of Montreal (1903) 9 B. C. 545. 324, 59 N. Y. Supp. 407; Rosenberg The headnote states that defendant v. Germania Bank (1904) 44 Misc. 233, · bank was the drawee bank; the opin88 N. Y. Supp. 952; Ellery v. People's ion does not make this fact clear. Bank (1909) 114 N. Y. Supp. 108 (rule In Chicago, B. & Q. R. Co. v. Burns admitted).

(1901) 61 Neb. 793, 86 N. W. 483, an North Dakota.-Crisp v. State Bank action by the payee of railroad pay (1915) 32 N. D. 263, 155 N. W. 78. checks against the railroad company,

Ohio.--Shaffer v. McKee (1869) 19 for wages for which the pay checks Ohio St. 526.

were issued, after the pay checks had Tennessee. Farmer v. People's been lost and cashed upon the forged Bank (1897) 100 Tenn. 187, 47 S. W. indorsement of the payee, it was urged 234; Knoxville Water Co. v. East that the railroad company was not Tennessee Nat. Bank (1910) 123 Tenn. liable to the payee, but that the bank 364, 131 S. W. 447.

at which the checks were made payWashington. Graton & K. Mfg. Co. able, and which had paid the same upv. Redelsheimer (1902) 28 Wash, 370, on the forged indorsement, was liable. 68 Pac. 879.

The pay checks were not drawn upon England. -Arnold v. Cheque Bank the bank in question, but were made (1876) L. R. 1 C. P. Div. 578, 45 L. J. payable at it. The court denied the C. P. N. S. 562, 34 L. T. N. S. 729, 24 liability of the bank to the payee, on Week. Rep. 759.

the theory that, the pay checks not A bank which cashed a check drawn being orders on the bank in which by an insurance company payable to the company was a depositor, so its state and local agents, upon the that, when issued and accepted, they indorsement by the local agent of his amounted to an assignment of the comown name and that of the state agent, pany's funds in the bank, the payee after the bank had been expressly di- had no remedy against it.

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