Wilson v. Alexander

• Decision Date: 31 December 1842
• Citation: 4 Ill. 392,1842 WL 3782,3 Scam. 392
• Parties: James Wilson, administrator of Samuel Wilson, plaintiff in error,v.David C. Alexander, defendant in error.
• Court: Illinois Supreme Court

3 Scam. 392

4 Ill. 392

1842 WL 3782 (Ill.)

James Wilson, administrator of Samuel Wilson, plaintiff in error,

v.David C. Alexander, defendant in error.

Supreme Court of Illinois.

December Term, 1842.

Error to Tazewell.

Where a forged note is paid by the administrator of the person whose name appears to the note, in ignorance of the forgery, he may, on discovering that the note is not genuine, recover back the amount paid. ^a

This cause was heard in the court below, at the September term, 1841, before the Hon. Samuel H. Treat and a jury.

A. Lincoln, for the plaintiff in error, cited Markle v. Hatfield, 2 Johns., 455; Young v. Adams, 6 Mass., 182; Jones v. Ryde, 5 Taunt., 488.

J. B. Thomas, for the defendant in error.

TREAT, Justice, delivered the opinion of the court:

James Wilson, as the administrator of Samuel Wilson, brought an action of assumpsit against Alexander, in the Tazewell Circuit Court. The declaration contains a count on a note made by Alexander to the plaintiff's intestate, and the common money counts. The defendant pleaded non assumpsit and payment. On the trial before a jury it was proved that the plaintiff held a note on the defendant, made to the plaintiff's intestate; that the defendant paid the plaintiff the amount of the note, and took it up, passing to him in part payment, a note for $150, purporting to be executed by the intestate, payable to Isaac Krieder, by him assigned to Joseph Allen, and by Allen assigned to the defendant. It was further shown that the note was a forgery; but it was admitted by the parties, that the defendant, at the time of the transfer, had no knowledge that it was forged. At the instance of the defendant's counsel, the court instructed the jury, that unless they believed, from the evidence, that the defendant knew the note to be forgery, at the time he passed it to the plaintiff, they were to find for the defendant. The jury found for the defendant, and judgment was rendered accordingly. The plaintiff having excepted to the instruction, brings the case to this court, and assigns this decision of the court as cause for reversing the judgment.

The instruction given in the court below was founded on the authority of the case of Levy v. The Bank of the United States, reported in 1 Binney, 27; and 4 Dallas, 234. In that case, Levy received, in the course of business, a check drawn on the bank, and presenting it for payment, was credited with the amount. The check was afterwards discovered to be a forgery, and the bank refusing to pay the amount thus credited to Levy, he brought suit and recovered; the court placing his right to recover principally on the ground that it was a duty incumbent on the bank to be satisfied of the drawer's handwriting, before accepting or paying the check; and if the bank failed to attend to that, it was justly chargeable with neglect, for which it, and not the innocent holder, should suffer. That as the bank was presumed to know the handwriting of the drawer, it had, by the payment of the check, taken this knowledge upon itself, and was estopped from asserting the forgery, as against the party who had passed it in good faith to the bank. That case is fully supported by various other adjudications, both in England and this country. The case of Price v. Neal,¹ decides that a drawee accepting and paying a forged bill of exchange, to a bona fide holder, can not recover back the money paid. In Smith v. Mercer,² it was held that bankers who paid to an innocent holder a forged acceptance of one of their customers, could not recover back the money, for the reason that it was their duty to have ascertained the authenticity of the acceptance before honoring it. In the case of The Bank of the United States v. The Bank of Georgia,³ the bank of the United States had deposited with the bank of Georgia certain notes, purporting to be the notes of the latter bank, which it received and credited as so much cash. It turned out that a portion of the notes had been fraudulently altered to larger amounts than they were issued for; and the bank of Georgia, upon the ascertainment of the forgery, refusing payment of the credit, it was decided by the court that the bank of the United States was entitled to recover the full amount of the credit.

It results from these decisions that a person who appears to be a contracting party to forged negotiable paper, is charged with a knowledge of its genuineness, and acts at his peril, when called upon by an innocent holder for performance of the contract. If he accepts, or promises to pay, he is not permitted to repudiate his act because of the forgery, but is bound to perform it. If he pays, he can not recover back the money; he takes upon himself the risk of the genuineness of the instrument.

As between other persons, who are not connected with the paper as parties, and stand in equal relations, each having the...