Hamilton Nat. Bank v. Nye

• Decision Date: 14 March 1906
• Docket Number: No. 5,557.,5,557.
• Citation: 37 Ind.App. 464,77 N.E. 295
• Parties: HAMILTON NAT. BANK v. NYE.
• Court: Indiana Appellate Court

37 Ind.App. 464

77 N.E. 295

HAMILTON NAT. BANK

v.NYE.

No. 5,557.

Appellate Court of Indiana, Division No. 1.

March 14, 1906.

Appeal from Circuit Court, Kosciusko County; Edgar Haymond, Special Judge.

Action by the Hamilton National Bank against Edward C. Nye. From a judgment for defendant, plaintiff appeals. Affirmed.

Bertram Shane, Jas. S. Dodge, and Jas. S. Dodge, Jr., for appellant. Saml. Parker, Brubaker & Brubaker, W. T. Alden, C. R. Lathan, and H. P. Young, for appellee.

ROBINSON, J.

Suit by appellant upon a bank check. The complaint avers that appellee executed his check upon the Lake City Bank, payable “to Walsh, Boyle & Co., or order,” and delivered the check to the payee; that afterward the check, for a valuable consideration, was indorsed by the payee to the Indiana National Bank, which bank, for a valuable consideration, indorsed the check to appellant; that afterward appellant presented the check to the Lake City Bank for payment, which was refused, of which appellee had notice; and that the same was duly protested. Appellee filed a verified answer admitting the execution of the check, but alleges he ought not to be held liable on the check for the reason that since this action was commenced he paid the amount of the check to Walsh, Boyle & Co.; that at the time the check was drawn he was indebted to that firm to the amount of the check for goods sold by the firm to him, and through their traveling salesman, Underhill; that when the check was drawn it was delivered to Underhill, who, instead of sending it to the firm, as was his duty to the firm, took the same to the Indiana National Bank and wrote the words, “Walsh, Boyle & Co.,” across the back thereof, which bank forwarded the check to appellant who was its Chicago correspondent; that the check was not indorsed by the firm, but was indorsed with the firm's name by Underhill; that he had no authority or right to so indorse the same; and that the firm did not in any manner ratify the indorsement. It was not necessary to verify the answer. It is not a plea of non est factum. It does not deny the execution or delivery of the check. The effect of the answer is that it denies the appellant's right to sue on the check for the reason that Walsh, Boyle & Co., are the real owners of the check; the title never having passed to appellant. Whether the verification that was attempted was sufficient is not material. The facts pleaded in the answer, if true, are a bar to the action. See Bostwick v. Bryant, 113 Ind. 448, 16 N. E. 378.

It is urged against the answer that it pleads appellee's conclusion as to what he “was bound to do in law.” However, this conclusion neither adds anything to nor takes anything from the pleading, because the facts from which this conclusion is drawn are pleaded. The facts pleaded speak for themselves, and it was unnecessary for appellee to state what the law upon these facts required or did not require him to do. The conclusion is surplusage. The maker of the check did not undertake to pay the amount of the check to any person other than Walsh, Boyle & Co., or to some person to whom this firm should order it to be paid. When the check was drawn and delivered to the firm's agent, the title was in the firm, and remained in the firm until by some act of the firm, or its authorized agent, it passed to another. An indorsement by any other person could have no effect on the firm's title. Placing the firm's name on the back of the check and delivering it to a third person would divest the firm's title and vest the title in such third person. If the agent, without the firm's knowledge, had delivered the check without any indorsement, to a third person, such delivery could not affect the firm's title, but such an act could have no greater or less effect than the delivery of the check with an unauthorized indorsement. If appellant has any title to the check, it derived it through the Indiana National Bank. But the unauthorized indorsement and delivery of the check had no effect on the payee's title and could not therefore convey anything, as against the payee, to that bank. We have nothing to do in this case with the respective rights of the two banks as against each other. “The purchase of the check upon a forged or unauthorized indorsement conferred no title, and in contemplation of law the check remained untransferred.” Indiana National Bank v. Holtsclaw, 98 Ind. 85;Graves v. American Exchange Bank, 17 N. Y. 205;Armstrong v. National Bank, 46 Ohio St. 512, 22 N. E. 866, 6 L. R. A. 625, 15 Am. St. Rep. 655;Levy v. Bank of America, 24 La. Ann. 220, 13 Am. Rep. 124;Seventh National Bank v....