Case Name: MICHELL vs. AYME
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1815-06
Citations: 3 Mart. (o.s.) 647
Docket Number: 
Parties: MICHELL vs. AYME.
Judges: 
Reporter: Martin (Louisiana Term Reports)
Volume: 3
Pages: 647–657

Head Matter:
MICHELL vs. AYME.
Indorsee must prove the hand his indorsers.
T h i s was an action against the acceptor of a bill of exchange. The plaintiff admitted that bill was his property before the acceptance and, that the hand of the drawer was forged. The defendant resisted the payment, because a forged bill is nullity, and what is null can produce no effect. His acceptance, he contended, created no obligation, because it was given in the belief that the bill was a true one ; error vitiates every contract. He contended that the drawee could not derive any right from a bill absolutely null and void, and having none, could not transfer any. Lastly, he held the plaintiff could not recover, because the bill being his property before the acceptance, if he sustained a loss, he could not impute it to an error, into which he was led by the defendant.
East. District.
June 1815.
The authorities adduced in his defence, were from the Roman, the French, and the Spanish laws, which, he insisted are alone to regulate a contract entered into within the city of New-Or leans. •
1. From the Roman law, were invoked the well known maxims, nemo plus ad alium trans-Jerre potest quam ipse hahet. Non debeo melius conditionis esse quam autor meus, a quo jus in me transit. No one can transfer a' greater right than he has.
Si quis indebitum ignorans solvit, per hanc ac-tionem condicere potestt Dig. lib. 12, tit. b. L 1. s. 1.
Quod indehitum per errorem solvitur aut ipsuni aut tantumdem repetitur. Id. 1. 7. Same princi-pie, Id. 1. 18. Whatever has been paid through , / i ■ ° errar may be recovered.
2. From the French laws, Domat was cited, who says, that engagements contracted through error, or without consideration⅛ or upon a false consideration, are null. 1 Domat, 126, liv. 1, sect. 1. art. 7.
The same principle is also found in 1 Pothier on Obligations.
The bearer, who has received the amount of a bill from the drawer, is bound to warrant the genuineness, garantit lavérifé, of the endorsements and of the bill. Jousse's Comm. on Ord. 1673, 249. He who pays a bill, ought to know well the signature of the drawer, otherwise he runs the risk of paying twice ; but, he will have his recourse on him who has improperly received the amount. Id. 360, 300.
Th e defendant next shewed that, from a parere of the merchants of Lyons, given in 1777, it appears that the acceptance of a bill, the signature of which has been discovered to be forged, does not bind the acceptor to pay it. The bearer is obliged to submit to the , radiation of the acceptance, and has his recourse against those who have given him the bill. Indeed, the acceptance can only relate to the signature of the drawer. If that be declared a forgery, the acceptance, of which it was the foundation, becomes void and gives ho right ' 0 to the bearer. Farther,, if the bill had been paid. by the acceptor, the bearer would be bound to refund its amount : payment having been obtained on a false title. For it is in an incontes-tible principle that that which is false, can produce no effect. 1 Ency. Jurisp. 90, Verbo Acceptance.
The bearer of a bill warrants the genuineness-of it, pnd of all endorsements. If the drawer, deceived by the forgery of the drawer’s signature, has paid it, when the forgery will be discover d, he will pause himself to be repaid by the person, tvho received the amount of it. Several arrests have decided this. Masson & Léclerc's Instructs, &⅛. 232, ch. 18.
The same principle is also established by a ,nish authority. The bearer of a bill absolutely^warrants the genuineness of the bill, and of all s endorsements : es enteramente garante de la validación de ella, y de todos sus endosos- 3 Febrero, add. part. 1, 375, n. 52.
The plaintiff relied entirely on English and American authorities.
1. The English are, 1. Wilkinson vs. Lut-•witch (in 1724.) The proof of an acceptance is a sufficient acknowledgment on the part of the acceptor, who must be supposed to know the hand writing of his correspondent. 1 Strange, 64⅜ but it was said the evidence would not be conelusive. .
2. ,%j vs. Fowler &? al. (in 1720.) The defendant offered to prove the bill to be a forgery, by calling persons who were acquainted with the hand of the drawer : but the Chief Justice would not admit this, from the danger to negociable notes, and he strongly inclined to think that even actual proof of forgery would not excuse the defendants against their own acceptance, which had given the bill a credit to the indorsee. 2 Strange, 946.
3. Price vs. Neal. If a forged bill be accepted and paid by the drawee, he shall not recovar the money back. Lord Mansfield said it was incumbent on the plaintiff to. be satisfied that the bill drawn upon him, was in the drawer’s hand, before he accepted and paid it, but it was not incumbent on the defendant, to inquire into it. 3 Burr, 1354. 1 IF. Blackst. 390.
4. Smith vs. Chester, Butter, J. said—-When a bill is presented for acceptance, the acceptor looks only to the hand-writing of the drawer, which he is afterwards precluded from disputing: andit is on that account that an acceptor is liable even though the bill be forged. T. R. 655.
5. Master vs. Miller. The same Judge quotes this doctrine, as having proceeded from'an eminent and learned Judge in anotherplace. “For half “ ⅝ century there have been various cases, which " have the question of forgery untouched. If “ a bill be forged the acceptor is bound.” 1 T. _⅞, 335,
6. Jourdan vs. Lashbrook (in 1792) Lord Kenyons aid, that when the drawer accepts a bill, he admits that the bill was signed by the person, by whom it professes to have been made. As-hurst J. said, that bills of exchange are instruments meant, in their nature, for general circula-. tion, and to pass from hand to hand, and every pnan who puts his name upon them, pledges his faith to the public that all circumstances appearing on the face of them are true. Lawrence, J. said an acceptor is only prevented controverting the hand-writing of the drawer, from the mischievous consequences of men giving credit by their acceptances, and then controverting that which must be supposed to be in their knowledge : -and this applies to every fact which the acceptance admits. 3 T. R. 604.
7. When a bill is drawn payable to a fictitious person, or order, it is in effect a bill payable to bearer, 3 T. R. 481.
8.. In the case of the U. S. vs. the Bank of the XJ. S. iri the Circuit Court of the U. S. for the Pennsylvania' District, in October 1800, before Patterson, J. and Peters, J. Ingersoll, for the defendant, admitted and stated that tía man accept$ a forged bill, or draft, he is not only conscien- tionsly, but legally bound to pay it ; and each the Judges expressly declared their concurrence in the admission. 4 Dallas 235, in.notis.
9. In the case oí Levi vs. the Bank of the TJ. S, in the Supreme Court of Pennsylvania, it was held that the Bank were bound to allow the amount of a forged check presented by the plaintiff and entered to his credit, in his cash bopk, in the usual form of a deposit of cash, Id. 234.
Lastly. Elementary writers of merit advance the position, that forgery of the drawer’s hand is no plea for the acceptor^ -CAiin/, 355. ch. 4, Kydd 302, ch. 9. •

Opinion:
Mathews, J.
delivered the opinion of the Court. The appellant brought suit in the late Superior Court of the Territory of Orleans on á bill of exchange, accepted by the appellee and which he suffered afterwards to be protested for non payment, having discovered it to be- a forgery. Judgment was, given in favor of Aymé the, defendant, and present appellee, in that Court, and being amongst the last rendered before the change from the Territorial to the State Government, a new trial was granted, and the cause regularly transferee! for trial to the District Court for the first Judicial District of the State ; and from a final judgment therein rendered in favor of the appellee this appeal is taken.
The petition, or declaration, contains only one count and that, such as is customarily used in actions brought by an indorser against the accept- or of a bill of exchange. The answer of the ap-pellee, who was defendant in the Court below, admits his acceptance, but contends that he is not bound to pay, because the bill is not genuine and true, but forged and false, the signatures of the drawers which appear affixed to it being counterfeited and forged. ,He denies also the signature of the indorser. To this answer the appellant, who was plaintiff in the Court below, demurred, and there being a joinder in demurrer on the part of the defendant, two questions of law were raised-for the decision of the Inferior Court, and which must now be deckled by this Court. 1st. Is the acceptor of a forged bill of exchange bound to pay it, to'the holder, when it does not appear that he took it on the credit of the acceptance and when there is no proof that his situation in relation to it, has been altered by such acceptance ? 2d. Can the indorser of a bill recover against the acceptor, without proving the hand writing of the indor-sers ?
As to the first of these questions, altho' the Court is inclined to think that it ought to be decided in the negative ; yet as we have no doubt on the second, that-at last a decision of it will carry the cause in favor of the appellee and affirm the judgment of the District Court, it is deemed unnecessary to give any positive opinion oh the legal effects of an acceptance, such as that on which the present action is founded. To determine on the, second question it is necessary to examine, whether from the pleadings in the case* and according to the law and custom of merchants the appellant can recover ? It is a rule with very few exceptions that an indorsee of a bill of exchange cannot recover against the acceptor, without shewing his right and authority by proving the hand writing of his indorsers. When the bill is indorsed in blank, it is sufficient to prove the signature of the first indorsee. But where there are several indorsements filled up to the order of a number of different persons, in an action against the acceptor'perhaps it would be necessary to prove the signatures, of all down to the holder. When a bill is made payable to bearer, in an action against the acceptor commonly the only proof necessary is that of the acceptance..
It is admitted by the counsel for the appellant to be a general rule of the merchants, that in actions brought by indorsees, against the acceptors of bills of exchange, the hand writing of the payees, or indorsers must be proved, in order to warrant a recovery. But he insists that the case before the Court ought to be considered as one forming an exception to this, general rule, because (says he) the bill being forged the payee must bé considered as a fictitious person, and then it stands on the footing of one made payable to bearer ? And if this be not true, that the acceptor having made his acceptance whilst all the endorsements were on the bill, no proof of them ought to be required from the holder.
Cases have beeu decided in the courts of England, and even some which were carried before the Supreme Court of that kingdom, wherein the principle has been established that bills of exchange drawn in favor of fictitious payees, may in some particular instances be considered in the light of those made payable to bearer, and' thus fcrm an exception to the genera! rule which requires proof of the endorsement. . From the history of these cases, to enable the holder, of such a bill to recover against the acceptor, as on a bill payable to the bearer, it is necessary, that he should prove. 1. -That the payee is fictitious, and 2. That the defendant knew this, at the time when he accepted the bill : or, 1. That the payee is fictitious and, 2. That the defendant had given a general authority to the drawer, See. to draw bills upon him in "the name of fictitious payees. See Kidd on Bills, &c. 268. The pleadings do not admit any facts, which bring the appellant's case within either of those exceptions to the general rule, nor can We perceive any other circumstance, attending, the cause, which will entitle him to the benefit of them or any other exception so as to cause the bill on which he founds his action to be considered as one payable to bearer. He can get no relief from the obligation imposed on him, to prove the hand writing of the indorsers, from the circumstance of the indorsements being on the bill at the time of the acceptance. For, altho' it is laid down as a general rule that the acceptor is bound to know the hand writing of his correspondent, the drawer ; yet-he is supposed |o look no farther : and an indorsee who sues him is obliged to make out his right and authority to recover, in the same manner as if the bill had been indorsed after acceptance. See 1 D. & E. 650, &c.
Being of opinion that the'judgment of the District Court is right, and well founded in law and justice, it is not for us to enquire into the axioms and reasoning by which the Judgé of that Court supports it.
It is, therefore, ordered, adjudged and decreed that the judgment of the District Court be affirmed with costs, &c.
Martin, J did not join in this opinion, having been of counsel in the cause.