Jones v. Miners' & Merchants' Bank

• Citation: 144 Mo. App. 428,128 S.W. 829
• Parties: JONES v. MINERS' & MERCHANTS' BANK.<SMALL><SUP>†</SUP></SMALL>
• Decision Date: 04 May 1910
• Court: Missouri Court of Appeals

128 S.W. 829

144 Mo. App. 428

JONES v. MINERS' & MERCHANTS' BANK.^†

Springfield Court of Appeals. Missouri.

May 4, 1910.

Motion to Modify Judgment or Transfer to Supreme Court Denied June 6, 1910.

1. PAYMENT (§ 85)—PAYMENT UNDER MISTAKE—RIGHT TO RECOVER.

Generally money paid without consideration and under mistake as to the facts is recoverable.

2. BILLS AND NOTES (§ 434)—FORGERY—PAYMENT —RIGHT TO RECOVER.

The drawer of a check or the maker of a note, being required to know his own signature, cannot recover payment to a holder in due course of a forged instrument, made through mistake.

3. BILLS AND NOTES (§ 434)—ACTION TO RECOVER —BURDEN OF PROOF.

By showing his payment of a forged note to defendant indorsee under mistaken belief that it was genuine, plaintiff made a prima facie case entitling him to recover the payment unless the defendant overcame the burden of showing that he was a holder in due course.

Appeal from Circuit Court, Lawrence County; F. C. Johnston, Judge.

Action by E. L. Jones against the Miners' & Merchants' Bank. From a judgment refusing to set aside a nonsuit, plaintiff appeals. Reversed and remanded.

James A. Potter (Edw. J. White, of counsel), for appellant. H. H. Bloss, for respondent.

COX, J.

Action for money had and received, trial by jury, and, at the close of plaintiff's testimony, the court offered to give a peremptory instruction to find for the defendant, and plaintiff took a nonsuit with leave to move to set same aside, filed his motion for that purpose, which was overruled, and he has appealed to this court.

The facts disclosed by the record in this case are as follows: In November, 1903, G. A. Paul was in Jonesboro, Ark., and sold a span of horses to the plaintiff, E. L. Jones, and received from Jones his promissory note, which was in the following form: "$200.00. Jonesboro, Ark., November 17, 1903. Twelve months after date I promise to pay to the order of G. A. Paul, two hundred 00-100 dollars. For value received negotiable and payable without defalcation or discount and with interest from date at the rate of 10 per cent. per annum, and if interest be not paid annually to become as principal, and bear the same rate of interest. E. L. Jones. No. _____. Due Nov. 16, 1904." This note is endorsed on the back as follows. "G. A. Paul." It is also stamped on the face as follows: "Received payment in sum of one hundred and fifty nine and 18-100 dollars. Wm. Cooley." About the time that this note became due, plaintiff received word from defendant that it held his Paul note for $200, and plaintiff then had the cashier of the bank of Jonesboro notify the defendant to send the note there and he would pay it. They sent the note to the Bank of Jonesboro, as requested, which plaintiff paid, but which, it afterwards developed, was a forgery; but plaintiff did not discover this until in January after he had paid it. The forged note was in the following form: "$200.00. 11-18-1903. Twelve months after date I promise to pay to the order of G. A. Paul, two hundred dollars for value received, negotiable and payable without defalcation or discount, and with interest from date at the rate of ten per cent. per annum, and if interest be not paid annually to become as principal and bear the same rate of interest. E. L. Jones. Jonesboro, Ark., No. _____. Due Nov. 19, 1904." This note is stamped on the face as follows: "Paid November 30th, 1904, Bank of Jonesboro, Ark." The note is indorsed on the back as follows: "Waiving protest, demand, notice and notice of nonpayment, for value received, I hereby assign, transfer and indorse the within note to D. B. Loy, Cashier _____ G. A. Paul." And it is further indorsed as follows: "Without recourse, D. B. Loy, Cashier." In January, 1905, Mr. McKinley, who owned the genuine note, sent it to an attorney at Jonesboro for collection. He notified the plaintiff. On the 8th or 9th of January, 1905, plaintiff went to his office, taking with him the forged note which he had paid in November, and, on a comparison with the note which the attorney held, discovered for the first time that he had paid a forged note. Plaintiff did not notify defendant bank of the fact that the note which he had paid to them was a forgery and demand a return of the money until April 8, 1905. Paul, the payee in the original note, and from whom defendant bank claimed to have purchased the forged note, failed and absconded on January 5, 1905. The defendant refused to return the money upon plaintiff's demand, and this suit followed.

It is clear in this case that the money paid by plaintiff to defendant was paid under the mistaken belief that he was paying a genuine note, and were this forged instrument, in form, not a negotiable note, there could be no question that plaintiff could recover, for the general rule is that money paid without consideration and under mistake as to the facts may be recovered. Lyle v. Shinebarger, 17 Mo. App. 66; Dobson v. Winner, 26 Mo. App. 335; Thompson v. Bank, 132 Mo. App. 225, 110 S. W. 681; Koontz v. Central National Bank, 51 Mo. 275; Beland v. Brewing Ass'n, 157 Mo. 593, 58 S. W. 1. But when the payment is made upon a supposed negotiable instrument, an exception to the general rule prevails. In Price v. Neal, 3 Burrows,...