43 N.W. 112 (Neb. 1889), Lorton & Co. v. Russell & Holmes

Citation:43 N.W. 112, 27 Neb. 372
Opinion Judge:COBB, J.
Party Name:LORTON & CO. v. RUSSELL & HOLMES
Attorney:John C. Watson, for plaintiff in error: S. P. Davidson, for defendant in error:
Case Date:September 17, 1889
Court:Supreme Court of Nebraska

Page 112

43 N.W. 112 (Neb. 1889)

27 Neb. 372

LORTON & CO.

v.

RUSSELL & HOLMES

Supreme Court of Nebraska

September 17, 1889

ERROR to the district court for Johnson county. Tried below before BROADY, J.

AFFIRMED.

John C. Watson, for plaintiff in error:

Agency to receive a check payable to order, implies no authority to endorse it in the principal's name. (Dodge v. Bank, 20 O. S., 234 [30 O. S., 1].) To justify a refusal to pay money on the ground of former payment, bank must show that its payee was authorized to receive payment. (Citizens' Bank v. Importers', etc., Bank, Ry. & Corp., Law Journal, Vol. IV, No. 23, p. 540.) The depositions were immaterial and irrelevant.

S. P. Davidson, for defendant in error:

The case of Dodge v. Bank (supra) is not in point, as the pretended payee there had no business relations with the real payee. When the agent's acts affect innocent third parties, the principal will be bound to the extent of the apparent authority conferred. (Webster v. Wray, 17 Neb. 579, 581.) Where one of two innocent parties must suffer, and one of them has enabled an injurious act to be done, it should be the latter. (Kasson v. Noltner, 43 Wis. 650-1; Story on Agency, sec. 127.) The principal may be bound by a mere holding out of authority, even though proved by circumstantial evidence. (Bouck v. Enos, 61 Wis. 663-4.) As to the question of general agency, Story on Agency, sec. 17; Edwards on Bills and Notes, sec. 81; Lumber Co. v. Stone, 19 Neb. 402-5-6.)

OPINION

[27 Neb. 373] COBB, J.

This cause is brought on error for review of the adverse decision of the district court of Johnson county.

The original action was by Lorton & Co., merchants at Nebraska City, against Russell & Holmes, bankers at Tecumseh, to recover from defendants the amount of three separate bank checks payable to plaintiffs, or order, of $ 217.39, and interest at ten per cent per annum from January 26, 1886. It is alleged that the checks were received into the hands of a traveling salesman of the plaintiffs, from their customers, in the line of his employment, fraudulently indorsed and cashed by him, and wrongfully paid by the defendants; that without the knowledge or consent of the plaintiffs, the defendants, on the 30th of December, 1885, out of the funds of the drawers of the checks, wrongfully paid to William Bancroft, a clerk of the plaintiffs, who had received the checks in payment of bills of merchandise entrusted to him for collection against the drawers of the checks; that Bancroft was not entitled to collect the [27 Neb. 374] money on the checks, but forged the plaintiffs' name thereon for that purpose, of all which the defendants had due notice at the time of payment to Bancroft; and that on the 26th of January, 1886, payment of the checks was demanded by plaintiffs and refused by the defendants.

In their answer the defendants deny that there is due the plaintiffs on any or all of said checks any sum whatever; and further deny that they paid either of the checks without the consent of the plaintiffs, or that the plaintiffs' name was forged upon the checks, or that defendants had any notice of such forgery, or that defendants wrongfully paid the checks to Bancroft.

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