Rouvant v. San Antonio Nat'l Bank, Case No. 5144.

• Decision Date: 06 February 1885
• Docket Number: Case No. 5144.
• Citation: 63 Tex. 610
• Court: Texas Supreme Court
• Parties: L. ROUVANT v. SAN ANTONIO NATIONAL BANK.

63 Tex. 610

L. ROUVANT

v.SAN ANTONIO NATIONAL BANK.

Case No. 5144.

Supreme Court of Texas.

Feb. 6, 1885.

APPEAL from Bexar. Tried below before the Hon. Geo. H. Noonan.

William C. Igel brought this suit to recover $550 claimed to be a balance of a deposit still due him. The bank claimed that it had paid out the amount to appellant on a draft drawn in his favor by Igel, and set forth the draft. Igel claimed that the draft was a forgery. The bank then made Rouvant a party, claiming that the money had been paid to him by reason of his having received and indorsed the draft, etc., and prayed for judgment over against him, in the event Igel recovered against it. Rouvant claimed that the bank ought to have detected the forgery, etc.; that it delayed five or six weeks in the discovery of the forgery.

It seems that Rouvant was slightly acquainted with both Igel and a man by the name of Nichols; that the latter, late one evening, purchased of Rouvant a fine watch and diamond, and gave him the check in payment. He wrote and signed the check in Igel's name in the presence of Rouvant.

Upon the trial the court rendered judgment in favor of Igel against the bank, and in favor of the bank over against Rouvant, and the latter appealed.

Tarleton & Foreman, for appellant, cited, on the proposition that the bank must know the signature of its depositor: City Bank v. National Bank, 45 Tex., 203 [see lower half of p. 218]; Morse on Banks and Banking (2d ed.), pp. 327-341; American Decisions, vol. 39, pp. 521, 522 (note); Bank of United States v. Bank of Georgia, 10 Wheat., 333;National Park Bank v. Ninth National Bank, 46 N. Y., 77;Goddard v. Merchants' Bank, 4 N. Y., 147;Bank of St. Albans v. Farmers' & Mechanics' Bank, 10 Vt., 141;Weisser v. Dennison, 10 N. Y., 69;Bernheimer v. Marshall, 2 Minn., 78;First Nat. B'k v. Ricker, 71 Ill., 439;Espy v. Bank of Cincinnati, 18 Wall., 604; Price v. Neal, 3 Burr., 1355; Smith v. Mercer, 6 Taunt., 76; Levy v. Bank of United States, 4 Dall., 234.

That the negligence of the bank was fatal to its right to recover, they cited: 2 Daniel, Neg. Inst. (2d ed.), secs. 1654, 1655, note 3; Morse on Banks and Banking (2d ed.), pp. 341-344; Smith v. Mercer, 6 Taunt., 76; Cocks v. Masterman, 9 Barn. & Cress., 96; Bank of St. Albans v. Farmers' & Mechanics' Bank, 10 Vt., 141;First National Bank of Quincy v. Ricker, 71 Ill., 439; Price v. Neal, 3 Burr., 1354; Gloucester Bank v. Salem Bank, 17 Mass., 33.

Shook & Dittmar, for appellee, that the judgment below was proper, cited: National Bank of North America v. Bangs, 106 Mass., 106, 443-446; Daniel on Neg. Inst., vol. 2, § 1361, p. 325; § 1657, pp. 569 and 570.

WATTS, J. COM. APP.

A bank, in accepting and paying a draft drawn by a customer, is generally held to know the signature, and, if a forged draft is accepted and paid, the bank, as a general rule, will not be heard to assert a mistake as to the signature. City Bank v. National Bank, 45 Tex., 218; Price v. Neal, 3 Burr., 1354; Levy v. Bank of the United States, 1 Binn., 27.

To that general rule, however, there are certain exceptions. In National Bank of North America v. Bangs, 106 Mass., 444, it was said: “But this responsibility, based upon presumption alone, is decisive only when the party receiving the money has in no way contributed to the success of the fraud, or to the mistake of fact under which the payment was made. If the loss can be traced to the fault or negligence of either party, it shall be fixed upon him.” Gloucester Bank v. Salem Bank, 17 Mass., 33. In the absence of actual fault or negligence on the part of the drawee, his constructive fault in not knowing the signature of the drawer and detecting the forgery will not preclude his recovery from one who has received the money with knowledge of the forgery, or who took the check under circumstances of suspicion, without proper precautions, or whose conduct has been such as to mislead the drawee, or to induce him to pay the check without the usual scrutiny or other precautions against mistake or fraud.” See, also, Ellis v. Insurance & Trust Co., 4 Ohio St., 628.

Here the check had not gone into circulation; it was drawn in favor of Rouvant and was indorsed and collected by him. At that time he was a responsible merchant in the city of San Antonio,...