First Nat. Bank v. City Nat. Bank

• Decision Date: 29 October 1902
• Citation: 182 Mass. 130,65 N.E. 24
• Parties: FIRST NAT. BANK OF MINNEAPOLIS v. CITY NAT. BANK OF HOLYOKE.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

182 Mass. 130

65 N.E. 24

FIRST NAT. BANK OF MINNEAPOLIS v. CITY NAT. BANK OF HOLYOKE.

Supreme Judicial Court of Massachusetts, Hampden.

October 29, 1902

COUNSEL

Walter S. Robinson, for plaintiff.

A. B Chapin and Green & Bennett, for defendant.

OPINION

LORING J.

In this case the plaintiff, which is a bank in Minneapolis, paid the defendant, which is a bank in Holyoke, in this state, the amount of a check drawn on the plaintiff by one of its depositors. The check was originally payable to George Raymond, was indorsed in the name of the payee by one George T. Raymond, who was not the payee, and again indorsed by the defendant bank as follows: 'Pay to any national bank or order. City National Bank, Holyoke, Mass. A. F. Hitchcock Cashier,'--and forwarded by the defendant to the plaintiff, the drawee of the check, inclosed in the following letter, 'written upon a blank': 'Dear Sir Inclose for collection and remittance No. 15253 ck. No. Pro. $352.50.' The plaintiff sent the defendant the amount of the check, and charged it to the drawer. The drawer, on discovering that the indorsement of the payee was forged, brought an action in Minnesota against the drawee, the plaintiff bank, to recover the amount of the check, with interest. The plaintiff gave the defendant due notice of the suit, and summoned it in to defend; but this defendant did not take upon itself the defense of the action. The Minnesota case was tried on an agreed statement of facts. Judgment was rendered for the plaintiff for $387.58, made up of $353.50, the amount of the face of the check, $12.40 interest, and $12.68 costs. In addition, the Minnesota bank paid $75 for defending the action on which it was sued, and brings this action to recover these sums. The case was tried without a jury, and a finding was made in favor of the plaintiff for $532.48; being the amount of the Minnesota judgment, $75 expended by the plaintiff in defending the action in Minnesota, and interest on those sums. It appeared that the defendant bank did not advance anything on the check to the forger when he delivered the check to it, but did pay over to him the amount sent it by the plaintiff after that was received, 'less a commission of twenty-five cents for collecting.'

The underlying question in this case is whether the defendant is liable over to the plaintiff. The first ground on which the plaintiff contends that the defendant is liable over to it is that by indorsing the check the defendant guarantied the genuineness of the prior indorsement. But the defendant did not indorse the check in that sense of the word; that is to say, the defendant did not enter into the contract of an indorser of a negotiable bill or note. The defendant did write on the back of the check: 'Pay to any national bank or order. City National Bank. Holyoke, Mass.,'--and sent the check, with that indorsement, to the drawee named in the check, for payment. This indorsement, if it can be properly called an indorsement, was not a transfer of the check, but was put on it when it was presented for payment. The indorsement of an indorser (using that word in its technical sense) imports a guaranty of previous signatures, because it is a transfer and sale; but an indorsement which is not made for the purpose of transfer is not an indorsement, within the law merchant, and does not carry with it a guaranty of previous indorsements. See, in this connection, Dedham Nat. Bank v. Everett Nat. Bank, 177 Mass. 392, 394, 59 N.E. 62, 83 Am. St. Rep. 286. The plaintiff does not contend that the defendant is liable over on the ground that by presenting the check for payment there was an implied representation and warranty of the plaintiff's right to be paid, including the genuiness of the prior indorsement to it. See Railroad Co. v. Richardson, 135 Mass. 473. And upon that point we express no opinion. But it does contend that the defendant is liable to it, in money had and received, for the money paid it under a mistake of fact. We are of opinion that that position is well taken. Welch v. Goodwin, 123 Mass. 71, 25 Am. Rep. 24; Merchants' Nat. Bank v. National Bank of the Commonwealth, 139 Mass. 513, 2 N.E. 89.

The defendant further contends that by its letter it notified the plaintiff that it was acting as agent in collecting the check, and having paid over the proceeds of the check to the forger in good faith after it received the amount of the check from the plaintiff, and before it was notified of the claim of the plaintiff, is not liable to it. But there is nothing either in the indorsements on the check, or in the letter with which the check...