Anschutz v. Central Nat. Bank of Columbus

• Decision Date: 22 December 1961
• Docket Number: No. 35057,35057
• Citation: Anschutz v. Central Nat. Bank of Columbus, 112 N.W.2d 545, 173 Neb. 60 (Neb. 1961)
• Court: Nebraska Supreme Court
• Parties: Fred B. ANSCHUTZ, also known as F. B. Anschultz, Appellant, v. CENTRAL NATIONAL BANK OF COLUMBUS at Columbus, Nebraska; United States of America, a banking corporation, Appellee.

Page 545

112 N.W.2d 545

173 Neb. 60

Fred B. ANSCHUTZ, also known as F. B. Anschultz, Appellant, v.CENTRAL NATIONAL BANK OF COLUMBUS at Columbus, Nebraska; United States of America, a banking corporation, Appellee.

No. 35057.

Supreme Court of Nebraska.

Dec. 22, 1961.

Syllabus by the Court

1.A general demurrer admits all allegations of fact in the pleading to which it is addressed, which are issuable, relevant, material, and well pleaded; but does not admit the pleader's conclusions of law or fact.

2.A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder unless and until it accepts or certifies the check.

3.The acceptance of a bill is the signification by the drawee of his assent to the order of the drawer.The acceptance must be in writing and signed by the drawee.It must not express that the drawee will perform his promise by any other means than the payment of money.

4.Under our Uniform Negotiable Instruments Law requiring acceptances to be in writing, an unauthorized payment of a check by the drawee bank on a forged endorsement will not constitute an acceptance.

5.A drawee bank which unwittingly pays a check to a subsequent endorser where the endorsement of the payee was previously forged is not liable in an action by the payee either on contract or for money had and received or for conversion.

Richards, Yost & Schafersman, Fremont, for appellant.

Walter, Albert, Leininger & Grant, Columbus, for appellee.

Heard before SIMMONS, C. J., and CARTER, MESSMORE, YEAGER, SPENCER, BOSLAUGH and BROWER, JJ.

BROWER, Justice.

This is an action brought by Fred B. Anschutz, appellant and plaintiff in the trial court, against the Central National Bank of Columbus, appellee and defendant, to recover the aggregate sum of $9,000 on two checks, each for $4,500, drawn on the defendant bank by M. H. Van Berg, owner-manager of Columbus Sales Pavilion, in favor of the plaintiff as payee under the name of F. B. Anschultz.It is alleged the plaintiff's signature as payee and endorser on the back of the check is a forgery.

The trial court sustained a general demurrer to the petition.The plaintiff elected to stand on the petition and plead no further.Thereupon, the trial court dismissed the petition and the plaintiff has perfected an appeal from the ruling of the court on the demurrer and dismissal.

Appellant assigns as error the court's action in striking certain words from the petition; in sustaining the demurrer and dismissing the action; and in holding by its ruling that the true owner of the check paid by the defendant bank to a third party on the forged endorsement of the payee was not entitled to collect from the bank even in the absence of the owner's negligence.

The petition sets out two causes of action, one on each check.Except for the dates of the checks they are the same.The substance of the first cause of action will be set out and it will be discussed.The second cause of action on which the check was dated September 9, 1959, with corresponding dates, will not again be referred to.

The substance of each paragraph of the first cause of action with the numbered portion as set out therein here follows with the exception of the fourth and sixth paragraphs which are quoted in full because of the ruling of the court in striking certain portions thereof.

The first and second paragraphs allege the defendant's corporate existence and its business and that the drawer of the check was a depositor in defendant bank on September 5, 1959.The third paragraph states that on or about that day the drawer made a check payable to the order of the plaintiff for $4,500, and refers to the copy of the check and endorsements attached as an exhibit.The fourth paragraph reads in full as follows: 'That thereafter on or about September 5, 1959, one P. COLUCCI, obtained possession of said check from said depositor for the pretended sole purpose of forwarding said check to the plaintiff herein.'The fifth paragraph states that the check had not been endorsed at the time P. Colucci obtained possession of it.The sixth paragraph reads in full as follows: 'That thereafter subsequent to September 5, 1959, said P. COLUCCI wrongfully cashed said check and thereafter said check was presented to defendant by one of the subsequent endorsers thereon for payment and defendant paid said check and charged the amount thereof to the account of said depositor, the drawer thereof; and that plaintiff did not then or at any time thereafter receive the proceeds of said check or any part thereof.'The seventh and eighth paragraphs allege plaintiff's signature on the back of the check was not his signature, but a forgery, and that by reason of the facts set out the drawee bank received $4,500 from the drawer that belonged to the plaintiff which it has failed to deliver and is indebted to him in that amount.The prayer is for $9,000 on both causes of action.

The fourth paragraph set out in full originally stated that Colucci obtained possession of the checks 'by artifice, fraud and trick,' and the sixth paragraph stated the defendant'negligently' cashed the check.The defendant filed a motion to make the petition more definite and certain by requiring plaintiff to set out the facts constituting the 'artifice, fraud and trick' and the 'negligence' mentioned, and in other particulars.

On a hearing the court ordered the quoted words stricken and otherwise in all respects overruled the motion.

The words stricken constituted nothing but the conclusion of the pleader.They added nothing to the petition in the absence of pleading further facts and striking them was not error.

'A general demurrer admits all allegations of fact in the pleading to which it is addressed, which are issuable, relevant, material, and well pleaded; but does not admit the pleader's conclusions of law or fact.'Elliott v. City of Auburn, 172 Neb. 1, 108 N.W.2d 328, 331.No prejudice arose from their being stricken.Combs v. Owens Motor Co., 121 Neb. 5, 235 N.W. 682.

The remaining question is whether or not the petition states a cause of action, which depends upon whether the payee of a check has a cause of action against a drawee bank which has paid a check upon the forged endorsement of the payee when presented for payment by a subsequent endorser.

This question involves the application and construction of two sections of the Uniform Negotiable Instruments Law enacted by Nebraska in 1905 which read as follows: 'A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder unless and until it accepts or certifies the check.'Section 62-1,189, R.R.S.1943.

'The acceptance of a bill is the significantion by the drawee of his assent to the order of the drawer.The acceptance must be in writing and signed by the drawee.It must not express that the drawee will perform his promise by any other means than the payment of money.'Section 62-1,132, R.R.S.1943.

Prior to the passage of the Uniform Negotiable Instruments Law, this court said that: 'A check drawn on funds in a bank is an appropriation of the amount of the check in favor of the holder thereof, in effect an assignment of the amount of the check, and the holder, upon refusal of the bank to pay the same where such funds have not been drawn out before its presentation, may bring an action thereon * * * in his own name.'Fonner v. Smith, 31 Neb. 107, 47 N.W. 632, 11 L.R.A. 528, 28 Am.S.R. 510.This case was one decided before the enactment of the Uniform Negotiable Instruments Law, cited with approval in Columbia Nat. Bank v. German Nat. Bank, 56 Neb. 803, 77 N.W. 346, andFalls City State Bank v. Wehrli, 68 Neb. 75, 93 N.W. 994.

These particular cases which we have cited laid down the rule common to that of the courts of last resort in many states before the passage of the Uniform Negotiable Instruments Law that the giving of a check operated as an assignment pro tanto of the drawer's account and it followed that there was privity of contract between the payee or holder of the check and the drawee bank.

Before the enactment of the Uniform Negotiable Instruments Law there was great confusion as to the rights of a payee against the drawee bank which had cashed a check on a forged endorsement.The courts of most of the states which followed the rule that a check operated as an assignment of the drawer's account held that the true owner could thereafter sue the drawee bank because the payee was in privity of contract with the drawee by virtue of the assignment.There was, however, a line of cases which held to the contrary.The leading case in this line of authority was the early one of First Nat. Bank of Washington, D. C. v. Whitman, 94 U.S. 343, 24 L.Ed. 229.The court there held there could not be a recovery in such a situation, stating: 'The payee of a check before it is accepted by the drawee, cannot maintain an action upon it against the latter, as there is no privity of contract between them.* * * Payment to a stranger upon an unauthorized indorsement does not operate as an acceptance of the check, so as to authorize an action by the real owner to recover its amount as upon an accepted check.'

That case was followed and quoted by many cases before the passage of the Uniform Negotiable Instruments Law.Since the adoption of this act it is still so cited and followed.Many courts now hold that the particular sections of that act set out herein were adopted for the purpose, in part at least, of rendering the law in that case applicable generally and to make the commercial rules clear, unambiguous, and uniform.Because we can find few decisions of this court touching upon this question,...