Neal v. Coburn

• Decision Date: 25 November 1898
• Citation: 42 A. 348,92 Me. 139
• Parties: NEAL et al. v. COBURN.
• Court: Maine Supreme Court

42 A. 348

92 Me. 139

NEAL et al.

v. COBURN.

Supreme Judicial Court of Maine.

Nov. 25, 1898.

(Official.)

Agreed statement from supreme judicial court, Franklin county.

Action by Charles H. Neal and others against Edward F. Coburn. Submitted on agreed statement. Plaintiffs nonsuited.

Assumpsit to recover $250 paid by the plaintiffs to the defendant for a check which was found to be a forgery, and of which the following is a copy:

$250. Boston, June 19, 1895.

Bay State Trust Company.

Pay to J. W. Crewe or order two hundred and fifty dollars.

Henry C. Haven.

H. C. Haven.

No. 1000.

[Indorsements:]

J. W. Crew.

E. F. Coburn.

Neal & Quimby. Furbish, Butler & Oakes.

Plea, general issue and brief statement of special matter of defense that if defendant ever did promise, etc., he (the defendant) was relieved and discharged from all liability or obligation before the commencement of this action.

The parties agreed to the following statement of facts:

"For the purposes of this trial it is agreed that the check declared on in plaintiffs' writ, purporting to have been drawn by H. C. Haven, in favor of J. W. Crew, on the Bay State Trust Company, dated June 19, 1895, for two hundred and fifty dollars ($250), is a forgery; that the defendant received said check from said Crew on the 5th or 6th day of July, 1895; that said Crew was a stranger in the vicinity, boarding at the hotel of the defendant, and gave this check in payment of his board bill, which amounted to ninety-nine dollars and seventy-five cents ($99.75), receiving from the defendant the balance, amounting to one hundred fifty dollars and twenty-five cents in money; that said Crew is not known or believed by the parties to have ever owned any property in this state, which was attachable; that defendant has never seen or heard from said Crew since taking the said check from him, as aforesaid, and does not know or believe that his real name is Crew, but believes he was an impostor; that said Crew left immediately upon paying his board bill as aforesaid; that defendant indorsed said check, and delivered the same to the plaintiff on July 20, 1895, paying an account which plaintiffs had against him of about fifty dollars ($50), receiving the balance in money; that plaintiffs indorsed and delivered said check to Furbish, Butler & Oakes, on July 22, 1895; that Furbish, Butler & Oakes indorsed and deposited said check to their credit for collection, in the Phillips National Bank, on July 23, 1895; that the Phillips National Bank indorsed the same, and forwarded it for collection to their correspondent in Boston, the National Bank of the Commonwealth, where it was received on the 26th day of July, 1895; that, on the same day, it was presented through the clearing house and Merchants' National Bank, by the National Bank of the Commonwealth, to the said Bay State Trust Company, for collection (the Bay State Trust Company not being a member of the Clearing House Association, and all checks drawn upon them being received by the Merchants' National Bank as an accommodation to them); that said check was received with others by the Bay State Trust Company, in due course of business, as aforesaid, marked 'Paid,' and charged to the account of said H. C. Haven, he being a regular customer of said bank, and having an account there; that, when said trust company received said check, it did not discover that it was a forgery, the signature thereto being a close imitation of the signature of said H. C. Haven; that as soon as said Bay State Trust Company discovered that said check was a forgery, namely, some time from July 27 to July 29, 1895, inclusive, it at once returned said check to the National Bank of the Commonwealth, demanding a return of the amount; that the National Bank of the Commonwealth refused to return the amount unless they first received it from the Phillips National Bank, from which bank they received said check; that said National Bank of the Commonwealth received said check from the Bay State Trust Company, and immediately forwarded it to the Phillips National Bank, demanding a return of the amount, where it was received by said Phillips National Bank, on July 30, 1895; that the Phillips National Bank returned said check to Furbish, Butler & Oakes on July 30, 1895, demanding the amount thereof of them; that, on the same day, Furbish, Butler & Oakes returned said check to the plaintiffs, demanding the amount of them, which was then and there paid by the plaintiffs to said Furbish, Butler & Oakes; that said Furbish, Butler & Oakes at once remitted the amount to the Phillips National Bank, and they to the National Bank of the Commonwealth, where it was received and paid to the Bay State Trust Company, where it was received and credited to the account of said H. C. Haven, on August 5, 1895; that the plaintiffs offered to return said check to the defendant, and demanded a return of the amount of him, on July 31, 1895, and the defendant agreed to pay the same, and did pay thereon the sum of one hundred dollars, but subsequently refused to pay the balance; that the defendant required no identification of said Crew, nor his right or title to said check, before taking the same; that said Haven has now drawn upon said Bay State Trust Company about 650 checks, and had at the time of the forgery drawn about 350; that said Crew, on June 19, 1895, called at the cottage of said Haven, and procured three genuine checks, as an accommodation, he said, to send away, one for $50, and two for $25 each, paying the money for the same, and at the same time stole three blank checks from the back of said Haven's check book, namely, Nos. 998, 999, 1,000; that the check in suit is the blank numbered 1,000; that said Crew, at the time of transferring said check to the defendant, said that Haven wanted him (said Crew) to hold said check until about the 1st of August, before collecting the same, and that he (Crew) would like to have him (defendant) hold the same until that time; that said defendant did not impart or make known said request to said plaintiffs. Copy of check to be a part of the case, and original to be transmitted to law court. Upon the foregoing facts, it is agreed that the law court may render such judgment as the law and facts require. If the action is maintainable, defendant to be defaulted for $150, and interest from date of writ; if not maintainable, plaintiffs to become nonsuit."

Argued before PETERS, C. J., and EMERY, HASKELL, WHITEHOUSE, STROUT, and SAVAGE, JJ.

F. E. Timberlake, J. C. Holman, and F. W. Butler, for plaintiffs.

H. L. Whitcomb and J. P. Swasey, for defendant.

EMERY, J. Haven was a depositor in the Bay State Trust Company, a bank in Boston. A written instrument purporting to be his check upon that bank, payable to Crew or order, was by Crew indorsed for value to Coburn, the defendant Coburn indorsed it for value to Neal & Quimby. That firm indorsed it for value to Furbish, Butler & Oakes. The latter firm indorsed it for collection to the Phillips National Bank. The Phillips Bank indorsed it for collection to the Commonwealth Bank of Boston, which bank presented it for payment through the clearing house to the Bay State Trust Company, the bank upon which it was drawn. The Bay State Trust Company paid it as Haven's check, marked it "Paid," and charged the amount to Haven's account. Three days afterwards it was discovered that the drawer's (Haven's) signature was forged, and the paper was returned through the same channel to Neal & Quimby, the plaintiffs, who refunded the amount, and in their turn presented it to Coburn, the defendant, and demanded of him to refund the amount in his turn, which he refused to do; hence this action for money had and received to enforce such refunding.

It is conceded that Neal & Quimby cannot maintain this action unless the Bay State Trust Company could do so had all the intermediate indorsers refused to refund. The question therefore is: Assuming the good faith of all parties, who shall bear the loss in such case,—the first innocent indorser for value, or the bank which accepted the paper as genuine, and paid it as the check of its depositor?

Since a check belongs to that class of written instruments called "commercial paper," the question stated is not so much one of abstract justice in the particular case, as it is of what is the established or workable rule in this class of cases. Commercial paper has long been governed by special rules, which, while designed to insure justice, are also designed to insure the free and safe use of an indispensable commercial agency. The commercial world needs and seeks for the plain workable rule, rather than for the somewhat uncertain abstract right in each case. We think such a rule, decisive of this case, has been long and firmly established.

A check is in form and nature a species of bills of exchange, and is pro tanto governed by the same rules (Foster v. Paulk, 41 Me. 425); hence decisions as to bills of exchange upon this question are applicable to this case. In 1715, in an action by an indorsee against the acceptor of a bill of exchange, tried before Lord Raymond in the king's bench court, sitting at Guildhall, to hear commercial cases, it was held that, the acceptance sufficiently proved the signature of the drawer. Evidence offered by the acceptor to affirmatively prove the bill to be a forgery was rejected, one of the reasons given being "the danger to negotiable notes." Jenys v. Fowler, 2 Strange, 931. In 1762, before Lord Mansfield, in the king's bench, then also sitting at Guildhall, was tried an action for money had...