Western Union Telegraph Co. v. Bimetallic Bank

• Decision Date: 10 March 1902
• Citation: 17 Colo.App. 229,68 P. 115
• Parties: WESTERN UNION TEL. CO. v. BIMETALLIC BANK.
• Court: Colorado Court of Appeals

68 P. 115

17 Colo.App. 229

WESTERN UNION TEL. CO. v. BIMETALLIC BANK.

Court of Appeals of Colorado

March 10, 1902

Appeal from district court, El Paso county.

Action by the Western Union Telegraph Company against the Bimetallic Bank to recover money paid on a check. From a judgment in favor of defendant, plaintiff appeals. Reversed.

I.N. Stevens and F.W. Lienau, for appellant.

J Stanley Jones and Charles C. Butler, for appellee.

WILSON P.J.

This suit grows out of the alleged payment of a check drawn by the plaintiff telegraph company upon the defendant bank to a person other than the payee, and without his indorsement. The main facts were contained in an agreed statement, that portion which is deemed material to the determination of this appeal being as follows: "(1) That on or about the 12th day of December, 1895, the agent and manager of plaintiff's office at the town of Cripple Creek was telegraphically instructed by the plaintiff to pay to one William H. Daily, at Cripple Creek, the sum of one hundred and seventy-two dollars ($172.00). (2) That a person presented himself at the office of said plaintiff at Cripple Creek, representing himself to be said William H. Daily, and was so identified by one S.J. Polin. (3) That the agent of the plaintiff thereupon drew a check on defendant's bank for one hundred and seventy-two dollars ($172.00), to the order of William H. Daily, and handed it to the person so representing himself as such William H. Daily. (4) That said person was not the William H. Daily for whom the money was intended by said telegraphic message. (5) That said check bearing indorsements as follows: 'Wm. H. Daley, S.J Polin, Blum,' and stamped 'Paid' by the First National Bank of Cripple Creek, was paid by the Bimetallic Bank, the defendant herein, December 14, 1895. (6) That none of the indorsements on said check were made in the presence of, or with the knowledge of, the plaintiff's said agent. (7) That the name of the person who so received said check from plaintiff's said agent is William H. Daley." In addition to this, one witness, the agent or manager of plaintiff who drew the check, testified. His evidence was to the effect, in substance, that upon telegraphic instructions to pay a certain amount of money to W.H. Daily he sent out a notice to that person. Afterwards, in answer to the message, a man presented himself, and stated that he was the person to receive the money. He brought with him another man for identification, but the agent, not being satisfied with the identification, and knowing the person brought in for that purpose, as he stated it, to be "no good," he drew up a check for the amount to be paid, naming as payee the person named in the telegraphic transfer, spelling the name as there spelled, Daily, and gave it to the man who represented himself to be Daily; that he did this for the purpose of having the bank identify the payee, he not being satisfied himself. It also appears from his testimony that upon delivering the check he took from the person representing himself to be the individual for whom the money was intended a receipt for the money, which receipt was signed, "Wm. H. Daley." The check seems first to have been cashed by another bank. In due course of business it reached the defendant bank, the drawee, bearing upon its back the indorsements of Wm. H. Daley, S.J. Polin, Blum, and the "Paid" stamp of the First National Bank of Cripple Creek, and was by it paid and charged to the account of the plaintiff.

The contract between a bank and a depositor is that it will pay out his money only upon and in accordance with his express direction. A check drawn in favor of a particular payee or order is payable only to the actual payee or upon his genuine indorsement, and if the bank mistake the identity of the payee, or pay upon a forged indorsement, it is not a payment in pursuance of its authority, and it will be responsible. It is also true, however, that the bank may be relieved from liability for payment to the wrong person, or under an indorsement not genuine, when the circumstances of the case amount to a direction from the depositor to the banker to pay without reference to identification or to the genuineness of the indorsement. These rules are well settled, and are supported by a long line of decisions of the highest authority. We cite a few: Dodge v. Bank, 20 Ohio St. 246, 5 Am.Rep. 648; Id., 30 Ohio St. 1; Pickle v. Muse, 88 Tenn. 382, 12 S.W. 919, 7 L.R.A. 93, 17 Am.St.Rep. 900; Jackson v. Bank, 92 Tenn. 155, 20 S.W. 802, 18 L.R.A. 663, 36 Am.St.Rep. 81; Crippen v....