Nat'l Bank of Commerce of Lincoln v. Farmers' & Merchants' Bank of Lincoln

• Decision Date: 16 November 1910
• Docket Number: No. 16,186.,16,186.
• Citation: 128 N.W. 522,87 Neb. 841
• Parties: NATIONAL BANK OF COMMERCE OF LINCOLN v. FARMERS' & MERCHANTS' BANK OF LINCOLN.
• Court: Nebraska Supreme Court

87 Neb. 841

128 N.W. 522

NATIONAL BANK OF COMMERCE OF LINCOLN

v.FARMERS' & MERCHANTS' BANK OF LINCOLN.

No. 16,186.

Supreme Court of Nebraska.

Nov. 16, 1910.

Syllabus by the Court.

State Bank of Chicago v. First National Bank of Omaha, 127 N. W. 244, re-examined, reaffirmed, and held decisive of this case.

Additional Syllabus by Editorial Staff.

Under the provisions of the negotiable instruments law (Comp. St. 1909, c. 41) that every person negotiating an instrument by delivery warrants that it is genuine, and that he has good title, and article 3, § 30, of such law, providing that an instrument is negotiated when it is transferred to another so as to make the transferee the holder, the word “negotiating” means putting into circulation by assignment of a claim, by indorsement, to dispose of by sale, and in 5 Words and Phrases, p. 4771, it is said: “To ‘negotiate’ means to conclude by a bargain, treaty or agreement, to transfer, to sell; and the power to negotiate a bill or note is said to be the power to indorse and deliver it to another, so that the right of action shall also pass, and negotiation means the act by which a bill of exchange or note is put into circulation by being passed by one of the original parties to another person.”

Payment by a bank of a check drawn upon it does not constitute such a bank a holder within the meaning of the negotiable instruments law (Comp. St. 1909, c. 41, art. 3, § 30), providing that an instrument is negotiated when it is transferred so as to constitute the transferee a holder thereof.

Appeal from District Court, Lancaster County; Frost, Judge.

Action by the National Bank of Commerce of Lincoln against the Farmers' & Merchants' Bank of Lincoln. Judgment for plaintiff. Defendant appeals. Reversed and remanded.Tibbets & Anderson and F. B. Baylor, for appellant.

Hainer & Smith, for appellee.

FAWCETT, J.

Plaintiff's petition is as follows: “The plaintiff, a corporation duly and legally organized and existing under and by virtue of the banking laws of the United States, complains of the defendant, a corporation duly and legally organized and existing under and by virtue of the banking laws of the state of Nebraska, and for cause of action alleges: That on July 7, 1908, said defendant, by and through the clearing house of Lincoln, Neb., presented to the plaintiff and demanded payment of a certain instrument in words and figures following, to wit: ‘No. 2738. Nebraska Printing Company 348-352 South 12th street, Lincoln, Neb. July 3rd, 1908. Pay to the order of P. Wall $24.46, twenty-four 46/100 dollars. Nebraska Printing Company, R. E. Wright. To National Bank of Commerce, Lincoln, Neb. United States Depository.’ That on the back thereof appear the signatures of P. Wall and O. H. Hereford. That the said Nebraska Printing Company had an account with the plaintiff and funds upon which checks might properly be drawn. That R. E. Wright, a member and officer of said company, had full power and authority to draw on said funds by check by signing said name of ‘Nebraska Printing Company--R. E. Wright.’ That said instrument, purporting on its face to be a check issued by the Nebraska Printing Company by R. E. Wright, and drawn on the National Bank of Commerce, plaintiff herein, was and is in fact and in truth a false, forged, and counterfeit check, and was not issued by or under the direction or authority or with the knowledge or consent of said Nebraska Printing Company or any of its officers. That plaintiff did not detect that the alleged signature of said R. E. Wright, which closely resembles the genuine signature of said R. E. Wright, was false, counterfeit, and a forgery until after payment of the amount called for by said check, to wit, $24.46, to said defendant. That said defendant presented said check for payment and the plaintiff, believing said false, forged, and counterfeit signature appended thereto to be the genuine signature of said ‘Nebraska Printing Company--R. E. Wright,’ and, having no knowledge or information to the contrary, did upon such request made by defendant as aforesaid duly pay to said defendant on said false, forged, and counterfeit check said amount, to wit, $24.46. That promptly upon the discovery of the forgery and that said check was false and a counterfeit the plaintiff duly demanded of said defendant that it repay to said plaintiff the amount so obtained on said false, fraudulent, and counterfeit check, to wit, $24.46, but that said bank wholly failed, neglected, and refused to do so, though often requested. Wherefore plaintiff asks judgment against said bank for the sum of $24.46 paid as aforesaid, together with interest thereon at 7 per cent. per annum from said 7th day of July, 1908, and for the costs of this action.” To this petition defendant interposed a general demurrer. The demurrer was overruled, and, defendant electingto stand thereon, judgment was entered for plaintiff for the amount of its claim. Defendant appeals.

This case is ruled by State Bank of Chicago v. First National Bank of Omaha, 127 N. W. 244. The cases are exactly alike on every essential point. In that case counsel for the parties conceded that the negotiable instruments statute did not...