Russell v. First Nat. Bank

• Citation: 2 Ala.App. 342,56 So. 868
• Parties: RUSSELL v. FIRST NAT. BANK OF HARTSELLE.
• Decision Date: 14 November 1911
• Court: Alabama Court of Appeals

56 So. 868

2 Ala.App. 342

RUSSELL v. FIRST NAT. BANK OF HARTSELLE.

Court of Appeals of Alabama

November 14, 1911

Rehearing Denied Dec. 14, 1911.

Appeal from Law and Equity Court, Morgan County; Thomas W. Wert Judge.

Action by T. J. Russell against the First National Bank of Hartselle, Ala. Judgment for defendant, and plaintiff appeals. Reversed and remanded.

A. J. Harris, for appellant.

Tidwell & Sample, for appellee.

DE GRAFFENRIED, J.

Frank Framhold is now and has been for the past 21 years a resident of Cincinnati, Ohio. During that period he has owned 160 acres of land, which is situated near Hartselle, in Morgan county, Ala., and which appears to be valuable principally for its timber. During the period above referred to, no one has been in the actual occupancy of the land, and Framhold's possession of it was that possession which is referable to his title. So far as the record discloses, he possesses and has possessed, during the above period, an unincumbered feesimple title to the land. He appears to have had relatives in Alabama, but seems to have known but little of them, and was himself a stranger to the people of Morgan county. It further appears from the evidence that he had no agent representing him in Morgan county. It seems that it was the custom of the tax assessors of that county to annually forward to him, at his address in Cincinnati, an assessment blank, and upon such blank he assessed the lands for taxation, and returned the assessment to the assessor at Hartselle. It seems that his taxes were paid by him direct to the tax collector, but whether by checks or post office orders we do not know.

It further appears from the testimony that Framhold had an uncle, who was about 65 years of age, and who resided certainly for a part of the above period, in different parts of Alabama; and that the name of this uncle was Frank Framhold. There is some evidence tending to show that Frank Framhold, the uncle of the Framhold who owned the land resided for 5 or 6 years in Birmingham; and it may be that he resided at that place during that period which is covered by the transaction out of which arose this controversy. Frank Framhold, the nephew and the owner of the land, does not seem to have known much of his said uncle, as it appears from the testimony that he had not seen him for 16 or 17 years.

One Claud Harris, who was the son of a man who appears to have been the tax assessor of Morgan county for a period of six years, resided in Hartselle, and it appears from the evidence that he aided his father in the performance of his duties as such tax assessor. It further appears from the evidence that the father of Claud Harris died while he was the tax assessor of said county, and that Claud Harris acted as such tax assessor from the time of his father's death until his successor was duly and regularly appointed. We gather from the evidence that the transaction out of which this litigation arose either occurred while Claud Harris was in the tax assessor's office, or shortly thereafter.

The appellant, desiring to buy the said 160 acres of land, went to the said Claud Harris, and asked him if he knew who owned the land, and whether it was for sale. Claud Harris informed appellant that the land belonged to Frank Framhold; that it was listed with him for sale for $640, and that Frank Framhold lived in Birmingham; and that if he desired the land he could get it at that price. Thereupon appellant told Harris that he was willing to pay $640 for the land, and would do so upon the execution and delivery to him of a good and sufficient deed, signed and executed by Frank Framhold and conveying a fee-simple title to the land. Harris then told appellant that he would go to Birmingham and get the deed; and there is evidence tending to show that Harris, about that time, went to Birmingham, and that, in the meantime, appellant had the title investigated, and found, upon investigation, that the title to the land was good in Frank Framhold. It further appears from the evidence that Claud Harris, who was then in Hartselle, called appellant up over the telephone, and told him that he had obtained the deed from Frank Framhold, and was ready to deliver it to him upon the payment of the money. Thereupon appellant met the said Harris in the banking house of appellee, and Harris exhibited to him a deed, which was regular on its face, and which purported to be signed by Frank Framhold, and which purported to convey to appellant an unincumbered fee-simple title to the said land, and which purported to have been duly witnessed by two witnesses, and to have been duly acknowledged before a notary public in Birmingham, Ala. Claud Harris stated to appellant, at the time he handed appellant the deed, that his commission for making the sale was 10 per cent. and that he desired two checks; one payable to the said Claud Harris for the 10 per cent., and the other to said Frank Framhold. Appellant declined to do this, stating that he knew nothing of the arrangement which had been made between Claud Harris and Frank Framhold, and thereupon drew a check in favor of Frank Framhold for $640, and had the appellee to certify the check, and then delivered the check to Harris, to be by him delivered to Frank Framhold. Thereupon appellant took his alleged deed, assumed such possession of the land as it was capable of, assessed it for taxation, and in the fall of the year filed the deed for record in Morgan county, and it was recorded there.

The check was, it appears, first negotiated in Birmingham, Ala. It appears to have been indorsed by Frank Framhold, Claud Harris, J. B. Hopkins, the First National Bank of Birmingham, which guaranteed all prior indorsements, and by the People's Savings Bank, which also guaranteed all prior indorsements. It was paid by the appellee upon the faith of the guaranty as to prior indorsements by the above Birmingham banks. The appellee did not know Frank Framhold or his signature, and made no inquiry as to the genuineness of his signature appearing on the back of said check; but it did know the Birmingham banks, knew that they were solvent, and relied exclusively upon their guaranties.

About a year after the payment of the check, Frank Framhold came to Hartselle, and appellant then learned, for the first time, that said Frank Framhold had not only not signed the deed, but that he had never heard of it, and that he had not only not indorsed said check, but that he had never heard of it. In other words, appellant then learned, for the first time, that said deed was a forgery, and that said Framhold's signature as the indorser of said check was also a forgery. Thereupon appellant immediately withdrew any claim that he had previously been making to said land on account of said deed, and immediately demanded of appellee the payment of said $640 which it had paid on said check and charged to appellant's account. The appellee refused to pay appellant said sum, and this suit was brought by appellant against appellee for its recovery.

1. As a general rule, where a check is drawn, payable to the order of any actually existing person, if the order or indorsement of such payee is forged, payment by the bank on which it is drawn is not an acquittance. The depositor has directed payment to be made in a certain manner; a payment made otherwise than according to his directions is no discharge of a bank's obligation towards him. A check or bill, payable to order, is authority to the banker only to pay it to the payee, or to a person who becomes the holder by a genuine indorsement. Morse on Banks and Banking, vol. 2 (3d Ed.) § 474.

2. The appellee...