Court Opinion

ID: 7968730
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:53:07.541445+00
Date Added: 2024-06-11T16:34:43.038649
License: Public Domain

CANTY, J.
(dissenting^. I cannot concur in the foregoing opinion. Because error is gray with age is no reason why it should be respected or followed. It seems to me that the foregoing opinion is a mere apology for such error, and this is true of the opinion in most of the modern cases on the question here involved. I concede that it is good public policy to hold that a banker should know the signature of his depositor. It tends to greater vigilance on the part of the banker, and more prompt discovery of the forgery, which makes the business of forgery more dangerous and less successful. But it does not follow that this is the only principle involved in this kihd of a case, or that it should overturn and exclude all other well-established principles applicable thereto. There is no stronger or bet*196ter established principle of law or public policy than that which holds that no one shall be allowed to retain the consideration received by him on a forged instrument, however innocent he may be, unless he can invoke the aid of the doctrine of estoppel. Even when a person has been deceived by the forgery of his own signature, and has paid the forged obligation, he may recover back the-money so paid from an innocent holder. Welch v. Godwin, 123 Mass. 71; 2 Morse, Banks, § 464. This principle tends to cause-greater vigilance on the part of every one about to take such paper, and to prevent him, when he has taken it, from suppressing his-suspicions, and putting the paper off on some one else, instead of investigating the matter and pursuing the guilty parties. Why should the law in such a case offer a premium on attempting to put the paper off on the drawee bank? The money of a bank is not legitimate plunder, and a person receiving it through mistake and without consideration ought not to be entitled to retain it. The-mere fact that a bank pays a forged check drawn upon it is no reason why it should lose its money. It was the absolute duty of the-bank to know its depositor’s signature, and detect the forgery, and • it should suffer any loss caused by its failure to perform that duty;' but there is no principle of law which says that, when such failure has caused no loss, the bank shall, as a mere penalty, forfeit the-money so paid by it.
The transfer of negotiable paper by one holder to another is accompanied by an implied warranty that the paper is genuine. Brown v. Ames, 59 Minn. 476, 61 N. W. 448. But, when a bank pays a check drawn upon it, there is no such implied warranty that the signature of the maker is genuine. On the contrary, it is the-duty of the bank to ascertain, when the check is presented, whether or not the signature to it is genuine. It owes this duty not only to-the innocent holder presenting the' check, but also to all prior innocent holders. If it fails in this duty, it can only recover back the money so paid by it on the ground that it was paid and received by mutual mistake and without consideration, and that none of the-successive innocent holders through whose hands the check passed will suffer any loss by reason of such failure if compelled to return the consideration received by him; that is, that none of such innocent holders will be in a worse position when he has returned such-*197consideration than he would be if the check had not been paid by the bank. There is no reason why this rule should lead to multiplicity of actions, or result in conditions too complex for practical solution. When the bank brings suit against the last holder to whom it paid the check, he can give notice of the suit to the next prior holder of whom he received it, and who is liable over to him ■on such implied warranty, and thereby bind such prior holder by the result of the suit. See Love v. Gibson, 2 Fla. 598; Kip v. Brigham, 6 Johns. 158, 7 Johns. 168; People v. Judges of Monroe, 1 Wend. 19; Blasdale v. Babcock, 1 Johns. 517; Bigelow, Estop. 84. I see no reason why the second last holder of the check cannot in like manner give notice of the suit to the third last holder of it, and thereby bind him by the result of that suit. And it seems to me that the defense will be entitled to plead and prove the existence of as many successive innocent prior holders as it can, and thereupon the burden should, perhaps, be thrown on the plaintiff bank to prove that none of these holders will be in a worse position when he has, by reason of the recovery of the bank, been compelled to return the consideration received by him, than he would be if the bank had never paid the check.