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It is no defense that the defendant bank or other corporation, or person, acted in good faith in the matter. ALLEN V. M. MENDELSOHN & SON (reported herewith) ante, 1063; Schaap v. First Nat. Bank (1918) 137 Ark. 252, 208 S. W. 309; Meyer v. Rosenheim (1903) 115 Ky. 409, 73 S. W. 1129; People v. Bank of North America (1879) 75 N. Y. 547; E. Moch Co. v. Security Bank (1917) 176 App. Div. 842, 163 N. Y. Supp. 277, affirmed without opinion in (1919) 225 N. Y. 723, 122 N., E. 879. Some importance is attached in Buena Vista Oil Co. v. Park Bank (1919) 39 Cal. App. 710, 180 Pac. 12, the facts of which are set out infra, to the fact that the defendant bank had had no previous dealings with the corporation, and refrained from making inquiry as to the authority of the officer depositing the check. The court in Meyer v. Rosenheim (1903) 115 Ky. 409, 73 S. W. 1129, says that the question in that case was on which of two equally innocent persons a loss should fall.

Recovery has been allowed although the plaintiff has been guilty of negligence. In Hamlin's Wizard Oil Co. v. United States Exp. Co. (1914) 265 Ill. 156, 106 N. E. 623, 7 N. C. C. A. 638, where the forgery was the act of an employee of the plaintiff, it was held that the negligence of the plaintiff in the management of its affairs was no defense, since it owed the defendant no legal duty to protect it against its own act in accepting negotiable papers on the forged indorsement of the owner. In Schmidt v. Garfield Nat. Bank (1892) 64 Hun, 298, 19 N. Y. Supp. 252, affirmed without opinion in (1893) 138 N. Y. 631, 33 N. E. 1084, the court, in allowing a recovery although the plaintiff may have been negligent, says it is not a general rule of law that a person can be deprived of his property by an unauthorized transfer thereof, simply because he has not exercised ordinary care to prevent such transfer; that estoppel by negligence arises where the negligence consists in permitting another person to clothe himself, or to be clothed, with apparent authority to act; that, where the negligence is simply that

ordinary care was not used to discover and prevent the fraud of the person who committed the forgery, there is no authority for holding that such negligence can work an estoppel.

The fact that the payee allowed more than two years to elapse after learning of the unauthorized indorsement by an agent, before giving any notice to the person who cashed the check for the agent, does not preclude his action against such person, whose position was not in any way changed by the failure of the payee to give the notice earlier. A. Blum Jr's. Sons v. Whipple (1907) 194 Mass. 253, 13 L.R.A. (N.S.) 211, 120 Am. St. Rep. 553, 80 N. E. 501.

The payee was held precluded by circumstances resulting in an estoppel, from recovering against the bank which had cashed the check, in Brown v. People's Nat. Bank (1912) 170 Mich. 416, 40 L.R.A. (N.S.) 657, 136 N. W. 506.

No tender of the forged check is necessary to the payee's right of action and recovery. Lindenthal v. Northwest State Bank (1921) 221 Ill. App. 145. In Johnson v. First Nat. Bank (1875) 6 Hun (N. Y.) 124, affirmed without opinion in (1877) 68 N. Y. 616, a recovery was allowed for the amount of all of the checks which had been cashed by the defendant bank, although the plaintiff was unable to produce a part of them because of the disposition which the defendant bank had wrongfully made of them.

b. Theory.

The theory of the rule set out in II. a, supra, has been expressed in different ways, all of which may be summed up in the statement that the possession of the check on the forged or unauthorized indorsement is wrongful, and when the money had been collected on the check the bank, or other person or corporation, can be held as for moneys had and received. ALLEN V. M. MENDELSOHN & SON (reported herewith) ante, 1063; Schaap v. First Nat. Bank (1918) 137 Ark. 252, 208 S. W. 309; United States Portland Cement Co. v. United States Nat. Bank (1916) 61 Colo. 334, L.R.A.

1917A, 145, 157 Pac. 202; Independent Oil Men's Asso. v. Ft. Dearborn Nat. Bank (1924) 311 Ill. 278, 142 N. E. 458; Buckley v. Second Nat. Bank. (1872) 35 N. J. L. 400, 10 Am. Rep. 249; Talbot v. Bank of Rochester (1841) 1 Hill (N. Y.) 295; Johnson v. First Nat. Bank (1875) 6 Hun (N. Y.) 124, affirmed without opinion in (1877) 68 N. Y. 616; E. Moch Co. v. Security Bank (1917) 176 App. Div. 842, 163 N. Y. Supp. 277, affirmed without opinion in (1919) 225 N. Y. 723, 122 N. E. 879; Salomon v. State Bank (1899) 28 Misc. 324, 59 N. Y. Supp. 407; Graton & K. Mfg. Co. v. Redelsheimer (1902) 28 Wash. 370, 68 Pac. 879; Arnold v. Cheque Bank (1876) L. R. 1 C. P. Div. (Eng.) 578, 45 L. J. C. P. N. S. 562, 34 L. T. N. S. 729, 24 Week. Rep. 759.

The position of the bank or other corporation, or person, taking the check on the forged or unauthorized indorsement, is the same as if he had taken the check and collected the money without any indorsement at all. Meyer v. Rosenheim (1903) 115 Ky. 409, 73 S. W. 1129; Thomas v. First Nat. Bank (1911) 101 Miss. 500, 39 L.R.A. (N.S.) 355, 58 So. 478.

The act of the bank amounts to a conversion of the check. Higgin Mfg. Co. v. Foreman Bros. Bkg. Co. (1921) 222 Ill. App. 29; Meyer v. Rosenheim (1903) 115 Ky. 409, 73 S. W. 1129; Kansas City Casualty Co. v. Westport Ave. Bank (1915) 191 Mo. App. 287, 177 S. W. 1092; Talbot v. Bank of Rochester (1841) 1 Hill (N. Y.) 295; People v. Bank of North America (1879) 75 N. Y. 547; Robinson v. Chemical Nat. Bank (1881) 86 N. Y. 404; Johnson v. First Nat. Bank (1875) 66 Hun (N. Y.) 124, affirmed without opinion in (1877) 68 N. Y. 616; E. Moch Co. v. Security Bank (1917) 176 App. Div. 842, 163 N. Y. Supp. 277, affirmed without opinion in (1919) 225 N. Y. 723, 122 N. E. 879; Salomon v. State Bank (1899) 28 Misc. 324, 59 N. Y. Supp. 407; Graton & K. Mfg. Co. v. Redelsheimer (1902) 28 Wash. 370, 68 Pac. 879; Arnold v. Cheque Bank (Eng.) supra.

Lack of privity between the parties. does not defeat the action. Buckley v. Second Nat. Bank (1872) 35 N. J. L.

400, 10 Am. Rep. 249; Farmer v. People's Bank (1897) 100 Tenn. 187, 47 S. W. 234.

This recovery may be in assumpsit. ALLEN V. M. MENDELSOHN & SON (reported herewith) ante, 1063. Independent Oil Men's Asso. v. Ft. Dearborn Nat. Bank (1924) 311 Ill. 278, 142 N. E. 458.

Recovery may be had in trover. A. Blum Jr.'s Sons v. Whipple (1907) 194 Mass. 253, 13 L.R.A. (N.S.) 211, 120 Am. St. Rep. 553, 80 N. E. 501; Crisp v. State Bank (1915) 32 N. D. 263, 155 N. W. 78.

The owner of the check may ratify the collection from the drawee bank without ratifying the forged or unauthorized indorsement. ALLEN V. M. MENDELSOHN & SON (reported herewith) ante, 1063; Schaap v. First Nat. Bank (1918) 137 Ark. 252, 208 S. W. 309; United States Portland Cement Co. v. United States Nat. Bank (1916) 61 Colo. 334, L.R.A.1917A, 145, 157 Pac. 202. Independent Oil Men's Asso. V. Ft. Dearborn Nat. Bank (1924) 311 III. 278, 142 N. E. 458.

The payee to whom a check has been mailed, but which has been intercepted and cashed with a fraudulent indorsement thereon by a third party, may ratify the delivery without ratifying the forged indorsement. Crisp v. State Bank (N. D.) supra.

It is held that the right of the payee or other holder to recover of the collecting bank, or other person or corporation, is not governed by the principles which govern the right of the payee or other holder to recover of the drawee bank. Schaap v. First Nat. Bank (1918) 137 Ark. 252, 208 S. W. 309; United States Portland Cement Co. v. United States Nat. Bank (Colo.) supra.

Compare Chicago, B. &. Q. R. Co. v. Burns (1901) 61 Neb. 793, 86 N. W. 493, supra, II. a.

c. As affected by question of delivery to payee.

In the great majority of the abovecited cases the check did not reach the hands of the payee. The bearing of such absence of delivery is considered in some cases, and held not to

be material. ALLEN v. M. MENDELSOHN & SON (reported herewith) ante, 1063.

The test, according to Indiana Nat. Bank v. Holtsclaw (1884) 98 Ind. 85, is whether title vested. In this case the check in question had been mailed to the payee, but a mistake had been made in his address, and the letter containing the check was delivered to another person of the same name at the wrong address, indorsed with plaintiff's name upon it, and transferred to the defendant bank. In holding that the title vested in the payee, the court says: "Ordinarily, when one person directs another to send him by mail a check for money, and the same is inclosed in a letter properly directed and deposited in the postoffice, such check at once becomes the property of the former, and is thereafter at his risk. This the appellant concedes, but insists that as a mistake was made in the address in this case, the title did not vest. This by no means follows. The title vested upon the acceptance of the check. If deposited as directed, the acceptance was then made and the title vested; if not deposited as directed, still the check, notwithstanding such misdirection, might be accepted, and, when accepted, the title vested. The mere fact, therefore, that the letter was misdirected, does not show that the title to the check did not vest in the plaintiff. It is insisted that as the [payee] did not know that such check had been issued and mailed to him until after the [bank] had purchased and received the money upon it, he could not thereafter waive the mistake made in addressing the letter, and accept the check." This contention was answered in the negative by the court, by saying: "The appellant had acquired no right, and hence there was nothing to hinder such acceptance. The purchase of the check upon a forged or unauthorized indorsement conferred no title, and, in contemplation of law, the check mained untransferred. In this condition, it was subject to the plaintiff's acceptance, though misdirected, and, when accepted, the title vested though

re

it had, in fact, been paid. As its indorsement was unauthorized, its purchase and payment in no manner affected the plaintiff's rights, and, therefore, did not preclude its acceptance."

Nor does the fact that the payee had begun an action against the drawer of the check, which could only be maintained on the assumption that the title to the check had not vested in the payee, affect the rights of the payee, where such suit did not constitute an irrevocable election and subsequently the payee amended his complaint against the bank so as to proceed against it upon the assumption that the title had vested. Indiana Nat. Bank v. Holtsclaw (Ind.) supra.

It was insisted in Crisp v. State Bank (1915) 32 N. D. 263, 155 N. W. 78, that, the check not having been in the possession of the payee before the time of the alleged conversion, an action of trover would not lie; that, no delivery having been made, the check at such time was the property of the maker, and not of the payee, and the payee, therefore, had no ground of complaint, as the liability of such maker to her was still existing, the debt never having been paid. The court answered this argument, however, by saying that the objection came too late; that the case had been twice tried, and the point did not appear to have been raised until the motion for a new trial was made in the second action. It is further stated that the delivery of the check to the plaintiff or her agent, and her right to the possession thereof at the time of its payment by the defendant bank, were admitted by the answer, and therefore the question of ownership of the check and the right to possession was eliminated. The court, however, seems to assume the necessity of a delivery, either actual or constructive, as a condition precedent of the action of trover. A constructive delivery by way of ratification of the sending of the check through the mail was, however, held sufficient.

It was urged in Lindenthal v. Northwest State Bank (1921) 221 Ill. App. 145, that no right of action vested in

the payee of the check, because it was not shown that the checks were delivered to him. The court, however, found that not only was there evidence of the payee's possession, but the fact stood admitted by the pleading.

d. Application to various states of fact. This question has usually arisen where the check has been cashed and collected by a bank, but the same principle has been applied where a corporation or individual other than a banker has cashed it. ALLEN V. M. MENDELSOHN & SON (reported herewith) ante, 1063; Hamlin's Wizard Oil Co. v. United States Exp. Co. (1914) 265 Ill. 156, 106 N. E. 623, 7 N. C. C. A. 638; Meyer v. Rosenheim (1903) 115 Ky. 409, 73 S. W. 1129; A. Blum Jr.'s Sons v. Whipple (1907) 194 Mass. 253, 13 L.R.A. (N.S.) 211, 120 Am. St. Rep. 553, 80 N. E. 501; Shaffer v. McKee (1869) 19 Ohio St. 526; Graton & K. Mfg. Co. v. Redelsheimer (1902) 28 Wash. 370, 68 Pac. 879.

Usually the action is by the payee, but in some cases it has been by an owner other than the payee. Talbot v. Bank of Rochester (1841) 1 Hill (N. Y.) 295. In fact, in this case, the plaintiff did not appear to be a party to the certificate of deposit there involved. Apparently, the plaintiff purchased the certificate, but it was indorsed directly from the payee to one to whom the plaintiff sent it inclosed in a letter. It was held, however, that the plaintiff being the owner, and the indorsee never having assented to the indorsement, the transfer to them was incomplete, and plaintiff retained the right to alter or strike out the indorsement.

A bank which, without previous dealings with a corporation and unacquainted with its officers or their power, accepts a check by its terms payable to the order of such corporation and bearing the indorsement only of the payee's name by its secretary, collects the amount of such check and places it to the credit of the person presenting it, and, without making any inquiries as to the authority of such person, permits him to 31 A.L.R.-68.

withdraw such proceeds, is liable to the corporation, where it appears that such person, as secretary, had no authority to act for the corporation, and that the money so withdrawn was devoted to his personal use. Buena Vista Oil Co. v. Park Bank (1919) 39 Cal. App. 710, 180 Pac. 12.

An express company which received checks and drafts issued or indorsed to a corporation, upon the indorsement of the corporation forged by an employee, and which issued money orders for the amount of the checks and drafts, payable to various persons; which money order the employee afterwards converted to his own use, is liable to the corporation for the amount of the checks and drafts thus received. Hamlin's Wizard Oil Co. v. United States Exp. Co. (1914) 265 Ill. 156, 106 N. E. 623, 7 N. C. C. A. 638.

The right of the payee to maintain an action and recover against the bank was sustained in Lindenthal v. Northwest State Bank (1921) 221 Ill. App. 145, although the payee had accepted from the employee who forged the indorsement property into which the proceeds of the check had gone, the amount received, however, not being sufficient to cover the defalcation.

The fact that the payee did not give the bank notice immediately upon discovery of the forgery was held not to prevent a recovery in Lindenthal v. Northwest State Bank (Ill.) supra, where it is stated that no business relation whatever existed between the payee and the bank in question, and knowledge of the forgery did not come to the payee before the proceeds thereof had been used by the employee who committed the forgery; hence, no duty to give notice was due from the payee to the bank.

In Burstein v. People's Trust Co. (1911) 143 App. Div. 165, 127 N. Y. Supp. 1092, the payee was allowed to recover of a bank to which the check had been transferred, notwithstanding such payee had unsuccessfully attempted to collect from the drawer of the check.

In Arnold v. Cheque Bank (1876) L. R. 1 C. P. Div. (Eng.) 578, 45 L. J. C. P. N. S. 562, 34 L. T. N. S. 729, 24

Week. Rep. 759, the draft in question had been purchased by the payee for the purpose of making a remittance, and had been indorsed by him specially to his creditor, and deposited in a letter addressed to the creditor. The letter was opened and the draft extracted, and the indorsement of the creditor forged. The court states it to be clear that the property in the draft had never in fact passed out of the plaintiff's payee, for indorsement, according to the court, consists not merely of the written indorsement on the draft, but there must be a delivery with intention to transfer the property, and in this case there was no delivery of the draft to the indorsee.

III. Minority rule.

The Pennsylvania supreme court has held the payee of a check not entitled to recover the amount thereof from a bank which cashed it for an employee of the payee, upon an unauthorized indorsement, and subsequently collected the same from the drawee.

Tibby Bros. Glass Co. v. Farmers & M. Bank (1908) 220 Pa. 1, 15 L.R.A. (N.S.) 519, 69 Atl. 280. The decision in this case rests upon the theory that the action of the defendant bank in cashing the check created no relation between it and the payee that would warrant the latter in maintaining an

Robbery

action for the recovery of the amount of the check. The court treats the money paid to the defendant bank as not the money of the drawers of the check, but the money of the drawee bank which paid it; hence, the money received by the defendant bank was held not to be the money of the payee, nor to have been received for the use

of the payee. The drawers of the
check and the payee were held to be
in no way affected by the payment of
the amount of the check by the drawee
bank to the defendant bank on the
forged indorsement. The deposits of
the drawers on which they had drawn
the checks were still their money, and
the indebtedness of the drawers to
the payee, for which the checks were
given, still existed and warranted an
action by the payee against his debt-
ors, the drawers of the checks. It is
further stated that the money paid the
defendant bank on the several checks
was the money of the drawee bank, in
which neither the drawers of the
check nor the plaintiff had any inter-
est, and, having been paid on forged
indorsements, it might be recovered
from the defendant by the paying
bank.

Compare Chicago, B. & Q. R. Co. v.
Burns (1901) 61 Neb. 793, 86 N. W.
493, supra, II. a.
W. A. E.

MELVIN C. TIPTON, Plff. in Err.,

V.

STATE OF OKLAHOMA.

Oklahoma Criminal Court of Appeals — February 17, 1923.

(— Okla. Crim. Rep. 212 Pac. 612.)

forcible collection of claim.

1. In a robbery case, where the taking of the property is for the purpose of forcibly collecting uncertain unliquidated damages as compensation for an alleged felonious assault on the taker's wife, such forcible taking may constitute robbery, and does not come within the rule that the forcible taking and retention of the property of another for the purpose of paying or securing the payment of a debt might not be deemed robbery.

[See note on this question beginning on page 1081.] Indictment

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power to amend.

2. Where an original complaint charging robbery is couched in such Headnotes by BESSEY, J.

language as to charge robbery in both the first and second degrees, it is not error for the court to permit the coun

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