Johnston v. Commercial Bank.

• Decision Date: 08 December 1885
• Citation: 27 W.Va. 343
• Court: West Virginia Supreme Court
• Parties: Johnston v. Commercial Bank.

27 W.Va. 343

Johnston

v.Commercial Bank.

Supreme Court of Appeals of West Virginia.

Submitted June 4, 1885.

Decided December 8, 1885.

1. It is an established rule of eommercial law, that the drawee of a bill of exchange is presumed to know the hand-writing of the drawer, and a fortiori the maker of a negotiable note is presumed to know his own signature; and if the drawee accepts or pays the bill, or the maker pays the negotiable note in the hands of a bona fide holder, although the drawer's or maker's name has been forged, he is bound by the act and can not recover back the money so paid.

A. J. Clarke for plaintiff in error.

LaldweU Caldwell for defendant in error.

Johnson, President:

On September 3, 1884, B. R. Johnston brought in the municipal court of Wheeling an action of trespass on the case in assumpsit against the Commercial Bank bf Wheeling, to recover the amount ot a note, $225.00, which purported to have been signed by said B. R. Johnston, payable to the order of Philip Metzner, and negotiated by said bank, and after maturity paid by said supposed maker, who afterwards discovered that his signature thereto was a forgery. The declaration contained the common counts in assumpsit, no special count.

The defendant demurred to the declaration, which demurrer was overruled, and the defendant pleaded non-assumpsit. The case was tried before a jury and verdict was rendered for the plaintiff. The defendant moved to set aside the verdict and grant it a new trial, which motion was overruled, and judgment was entered on the verdict. The defendant took a bill of exceptions to certain rulings of the court, which bill certifies all the evidence in the case.

The evidence shows that the note was endorsed by Philip Metzner, to whose order it was payable, and negotiated at the Commercial Bank. The note was further endorsed: "Pay Bank of Ohio Valley or order for collection as at Commercial Bank, Wheeling, West Virginia. S. P. Hildreth, Cashier." Also, "Pay to J. R. Mitchell or order for collection for Bank of the Ohio Valley, Wheeling, West Virginia, F. P. Jepson, Cashier." The evidence further showed, that the plaintiff, B. R. Johnston, was a dealer in furniture in St. Clairsville, Ohio, buying for some years past his furniture from the Riverside Furniture Company in Wheeling, of which said Philip Metzner was president. Johnston had at different times given his notes to the furniture-company for his purchases. About October 25, 1883, Metzner presented to the Commercial Bank, where his own and the furniture company's business was done, a note tor $225.00 at four months, dated October 25, 1883, payable to the order of said Metzner, purporting to have been made by said B. R. Johnston, and asked that it be discounted, and in the usual course of business it was discounted, and Metzner drew tor the proceeds. The note fell due February 28, 1884, and in January, 1884, it was sent to the Bank of the Ohio Valley for collection, and by it sent to the First National Bank of St. Clairsville, its correspondent, for collection. Johnston was notified by the First National Bank ot St. Clairsville of the note being there for collection, and his attention was called to it as a "furniture-company note" before it fell due; but being short ot money he did not pay it. It appears there was nothing to prevent him seeing the note. It was sent back to Wheeling unpaid after March 6, 1884. About the middle of March the cashier of the defendant wrote Johnston reminding him of his note, and that it was past due and asking payment. Johnston did not reply, and on March 31, 1884, his team being found in Wheeling in charge of his son, was seized on attachment sued out by the bank. The son informed his father of the attachment by telegraph. The dispatch was by Johnston shown to the cashier of the First National Bank of St. Clairsville; and at Johnston's instance the cashier telegraphed to Hildreth, cashier of the defendant bank, to send the note to the First National Bank of St. Clairsville, and it would be paid. On April 1, the note was sent by the Bank of the Ohio Valley, to the St. Clairsville bank, and was received after banking hours, and on April 2, it was paid by Johnston. Upon the receipt of the telegram from the cashier of the St. Clairsville bank, the attachment was released.

Johnston says: "According to my directions he, Mitchell, (the cashier,) paid the note." Johnston, himself, did not see the note until possibly four or five days after April 1, when he went to the First National Bank of St. Clairsville and got possession of it. Metzner went with young Johnston, after the team was levied on under the attachment, to the telegraphoffice, where the son sent his father the despatch. Metzner gave young Johnston a note for $241.00 dated March 31, 1884, and told him to give it to his father, which he did on April 1. Johnston received the note on April 1, but did not understand it. This was before the forged note was paid by Johnston. On taking the note home, which he had paid, Johnston discovered, that the name of the "Riverside Furniture Company" as payee was not in the note. The notes had been theretofore made payable to the order of the company, but Philip Metzner was the payee in this note, and he discovered that his signature thereto was a forgery. Mitchell, the cashier, knew Johnston's signature well. Johnston had for several years kept an account in the First National Bank of St. Clairsville, of which bank Mitchell was cashier.

Mitchell in his evidence says: "I never looked at the note, until Johnston brought it to me, after it was paid. On April 9, Johnston went with his attorney, Judge Carroll, to Wheeling, and went to the Commercial Bank for the purpose ot finding out, for whom the note had been discounted, and found it had been discounted for Metzner. Nothing was said at the bank at that time about the note being a forgery. They went from the bank to the office ot The Riverside Furniture Company und examined its books to see if there was any indebtedness there of Johnston's corresponding in time and amount with the $225.00 note, and found no such indebtedness. They then went to Metzner's house, saw him there sick, charged him with the forgery ot the note and told him they wanted money or security. He asked for time until Saturday, April 12, to fix it up, and said by that time he could and would do it; and the time was given. They did not inform the bank of the forgery, nor that they had given time to Metzner to fix it up.

Judge Carroll in his evidence says: "Johnston got a despatch from Metzner's son on April 11, that his father could not fix up the matter by Saturday and asking delay until the next Monday, April 14. I answered at Johnston's request giving him the time."

Metzner died on the evening of April 11. On April 15, the day after the day to which Johnston had extended time to Metzner to fix the matter up, Johnston went to the Commercial Bank and said that Metzner had acknowledged the $225.00 note to be a forgery, and demanded repayment of the money by him paid on the forged note. The bank declined to pay the money back. The evidence tended to prove that Metzner died insolvent.

The defendant by counsel asked the court to give the following instructions:

u No. 1. If the jury believe from the evidence that the plaintiff on the fourth or fifth of April, 1884, knew the forgery of his name to the note mentioned as paid by mistake by him on April 2, 1884, and that he failed to notify the defendant of said forgery till the fifteenth day of April, following and to demand a re-payment of the money, that then by reason of this delay he is not entitled to recover in this suit.

"No. 2. If the jury believe trom the evidence that the defendant discounted the note in this suit mentioned and received the same in their regular course of business in good faith and for value, and did not know or have any reason to suspect that the plaintiff's name as maker was forged to said note when defendant discounted the same, and that said note was paid by plaintiff or by his agent, to the defendant on or about April 2, 1884, that then and in that event the plaintiff is not entitled to demand back the money so paid and cannot recover in this suit.

" No. 3. If the jury believe from the evidence that after the plaintiff discovered that his name to the said note in this suit as maker had been forged by the payee, Phillip Metzner, and that the plaintiff without the knowledge or consent of the defendant entered into negotiations with said Metzner, for the re-payment of the money paid by plaintiff to the defendant on said note, and without the knowledge or consent of the defendant gave time to said Metzner to arrange for and make said re-payment to the plaintiff, that then and in that event the plaintiff must be held as having adopted said forged note as his own and said Metzner as his debtor and that he must look to said Metzner for re-payment, and is therefore, not entitled to recover in this suit.

uNo. 4. That under all the circumstances of this case as made by the plaintiff's own evidence, he is not entitled to recover."

And the court refused to give said instructions and each of them and the defendant excepted.

After the jury had been out some time and failing to agree, on motion of the planintiff against the objections of the defendant, the court gave the jury the two following instructions, and the defendant again excepted.

u No. 1. Where a person's name is forged to a note, it is a nullity as to him, but if such a note is presented to him by an innocent party for payment, and alleged to be genuine, and lie after inspection recognize it as such *ind pays the same, he can not recover back the money paid although the note be a forged one. It is well settled that every party is bound to know his own signature, and if he make a mistake (after inspection) in recognizing a forged signature to a note as his own, he can not recover back the money paid to a bona...