Court Opinion

ID: 3301030
Source: CourtListenerOpinion
Date Created: 2016-07-05 17:17:26.555903+00
Date Added: 2024-06-11T13:50:28.315877
License: Public Domain

I dissent. The law relating to the warranties which are implied by the sale of an instrument in writing, as provided in section 1774 of the Civil Code, does not apply to this case. Notwithstanding the opinion of Judge Wallace in Riverside Bank v.First National Bank, 74 Fed. 276, I am of the opinion that one who presents a check to the bank upon which it is drawn, and demands payment of the amount written therein, does not thereby offer *Page 586 
to sell the check to the drawee. And if the payment is made and the check delivered to the drawee, the transaction is not in any true sense a sale of the check. The payee or holder is merely demanding performance of the obligation which he holds. The drawee is merely performing that obligation, and he takes the check, not as upon a sale, but as a voucher or receipt against the fund held by him for the drawer. It may be that if a case arose where, for the protection of the drawee, it became necessary to consider him a purchaser, or as having the rights of a purchaser, of the check, the law would raise an implication of a purchase in order to do justice, but this would be a fiction such as the law sometimes indulges in for the ends of justice, and it does not change the actual relation of the parties, nor the actual effect and character of the transaction.
Nor does the qualified indorsement of the Nevada Bank, coupled with the rules of the clearing-house with respect to it, imply any warranty such as would be implied from an ordinary indorsement. The indorsement as made, and as so qualified, amounted to no more than would an oral demand for payment. There is therefore no question here as to the effect of a warranty arising from an implied sale or from the indorsement. It follows that the modifications found in the Civil Code of the common-law rules respecting implied warranties, do not change the effect of the authorities upon the question of the right to recover money innocently paid by mistake upon raised checks. The right to the recovery does not rest upon the theory that there is a warranty.
The fact that the defendant had paid over the money to Dean, the forger, before notice of the fraud, did not, under the circumstances of the case, relieve it from liability to the plaintiff. If the agency of the defendant had been known to the plaintiff, the rule in this respect would have been different. For that knowledge would have carried information that, in law and in fact, the money paid became at once the money of Dean, the owner, and not the money of the defendant, and from this circumstance it would have been charged with knowledge that, if it wished for any reason to follow the fund and recover the identical money paid, or its equivalent, it must give notice to the defendant before the money was paid to the principal, which it did not do. *Page 587 
The court found that the fact of agency was not known to the plaintiff. The prevailing opinion holds that this finding is not sustained by the evidence. I am of the opinion that in so deciding this court has invaded the province of the trial court. Possession of a check, like the possession of any other article of personal property, raises a presumption of ownership in the possessor, which it would take evidence to remove. The question whether the evidence in this case was sufficient. to overcome this presumption depends on the inferences which might be drawn from circumstances which would justify either of two inconsistent conclusions. In such cases the conclusion of the trial court is final. (Gould v. Eaton, 111 Cal. 639.1) That the decision of a trial court upon this fact is conclusive was directly decided inNational Park Bank v. Seaboard Bank, 114 N.Y. 34.2 So, also, the rule would be different if, after paying the money on the check, the delay in discovering the forgery had been due to the negligence of the plaintiff, and in the mean time the defendant had paid the money over to the principal, or otherwise so changed its position that it would be prejudiced by the plaintiff's recovery. But here the money was paid to Dean on the following day, and it is not claimed than any ordinary diligence by the plaintiff would have enabled it to discover the forgery in time to have prevented such payment.
One who presents for payment a check upon a bank, by the mere act of presentation, even if no word be spoken, represents that the check so presented is all that on its face it purports to be. The defendant, therefore, did make a false representation to the plaintiff of a material fact, although it was ignorant of the falsity of the tacit statement. The plaintiff was bound to know the state of its account with the drawer of the check, and the genuineness of the drawer's signature, but it was charged with no duty to detect the forged alteration in the amount. If there was a duty resting on either party to look to that point, it was greater upon the defendant, who dealt with the forger, than upon the plaintiff, who knew nothing of him. The plaintiff, upon its innocent mistake in assuming that the false check was genuine, and its reliance upon the implied representation of the *Page 588 
defendant, which reliance, in the absence of anything shown to the contrary, will be presumed, paid to the defendant the full amount of the check. For the money paid it received no consideration. The case of the plaintiff rests upon the principle that one who pays money without consideration, and upon a mistake of a material fact, may recover it in an action against the person who received it. The demand for payment was in effect a rescission. Nothing of value was received, and nothing need be returned. The defendant at once became liable for the money demanded. (2 Daniel on Negotiable Instruments, sec. 1661, and cases cited; Redington v. Woods, 45 Cal. 406, 428.1) There is nothing in the later provisions of the Civil Code above referred to which in the least changes or affects the rule laid down in the case last cited.
I am of the opinion that the judgment should be affirmed.
Rehearing denied.
1 52 Am. St. Rep. 201.
2 11 Am. St. Rep. 612.
1 13 Am. Rep. 190.