Court Opinion

ID: 7889880
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:47:36.186056+00
Date Added: 2024-06-11T16:31:52.634787
License: Public Domain

Buchanan, Ch. Judge,
delivered the opinion of the court.
A bill or note payable to order, can only be transferred by endorsement; and as an action against the acceptor or drawer, can only be sustained by one who has legal title, which cannot be derived through the medium of forgery, it is incumbent on the plaintiff in such an action, to show his interest in the bill or note, which must be done by proving that it was endorsed by the person to whom, or to whose order, it is made payable.
This is an action by the second endorsee against the maker *474of a promissory note, payable to the payee or order, which was resisted at the trial on the ground, that the first endorsement, purporting to be by the payee was a forgery, of which proof was offered by the defendant. On the part of the plaintiffs, it was proved, that the defendant bn being called on by their counsel, after the endorsement to-them, to pay the note, examined it, and said it was right, and he would settle it with them. Upon which the court instructed the jury that if they believed, the defendant when the note was presented to him by the counsel of the plaintiffs, had examined the endorsements and said it was right, the plaintiffs were entitled to recover, although they might believe the endorsement of the payee’s name had been forged, and notwithstanding that acknowledgment had been made, after the transfer of the note by these endorsements to them, on an exception to which instruction the case is brought up.
Apart from the alleged conversation between the defendant and the counsel of the plaintiffs, it is very clear, that the plaintiffs are not entitled to recover, if the first endorsement in the name of the payee of the note was forged; as the title was not and could not thereby be transferred, but continued in the payee, who on obtaining possession of the note, might sue upon it, and recover against the maker, notwithstanding he should have paid it to him, into whose hands it came, through the medium of the forgery; for besides that in such case, the payee has not parted with his title, the payee of a note whose name is forged, knows nothing of it, and the maker before he pays it to the holder as endorsee, should look carefully to the endorsements. And if one is to suffer, the loss should fall on. him who is most in fault, or most negligent,
The only question then, in this case is, whether, if after the endorsements had been made, the defendant, on the note being presented to him, by the counsel of the. plaintiffs, examined the endorsements and said it was right, that makes any difference. And we think it does not. By saying so, he gave no credit to the note; and did not thereby induce *475the plaintiffs to take it. That had been done before, and not on the faith of what he said. The plaintiffs might before they took the note, have inquired whether the first endorsement was by the payee or not, and not having done so, they must abide by the consequence and cannot throw the loss upon the defendant, who had done nothing to mislead them or induce them to take the note. And who if made to pay the amount in this action, may be made to pay it over again by the payee, whose right remains unimpaired.
It is not like the case of a drawee of a bill, who if on being asked if the acceptance is in his hand-writing, says that it is and that it will be duly paid, cannot afterwards set up as a defence the forgery of his name; because by saying so he has accredited the bill and induced another to take it, which being his own fault the loss ought to fall on him, and not on another, who has been induced to take the bill on the faith of his assurance.
JUDGMENT REVERSED.