In Turnbull v. Bowyer (40 N.Y. 456) it was held that an indorsement of negotiable paper was a warranty in law by the indorser to the holder in good faith, that the paper itself and all the antecedent indorsements were genuine, and even if they were all shown to be forgeries the indorsers would be liable to the holder for the amount of the paper.Summary of this case from Lennon v. Grauer
Argued April 2, 1869
Decided June 12th, 1869
Francis Byrne, for the appellant. Wheeler H. Peckham, for the respondent.
In the case of commercial paper a bona fide purchaser gets a good title, although it may have been stolen and is transferred by the thief. (Edwards on Bills and Prom. Notes, 308, 309, 310, and cases there cited.) This check was not stolen, however, from the defendants, and they, without any objections made, allowed Miaglia to receive it and depart, after they had indorsed it in blank. As to all subsequent bona fide holders, therefore, they must be regarded as indorsers. The rule is well settled also that an indorsement of commercial paper is a contract with every subsequent holder, that the instrument itself and all the antecedent signatures thereon are genuine. (Story on Prom. Notes, §§ 135, 379, 380, 387, and cases there referred to.)
The plaintiff was proved to be a bona fide purchaser of this check; and as the judge submitted the question, whether the indorsement of the payees was genuine or a forgery to the jury, and the jury found that such indorsement was a forgery the liability of the defendants to the plaintiff was fully established. The plaintiff having purchased this check of Miaglia, in good faith, and paid value for it, there was an implied warranty in law on the part of the defendants to the plaintiff, as holder, that the indorsement of the payees was genuine. The plaintiff acquired no title to the check as against Ball, Black Co., and was entitled to recover of the defendants, the amount of the check, upon their implied warranty. The plaintiff was under no obligation to protest the check, and the defendants have lost nothing by his omission to do so. The defendants' liability was fixed before presentment of the check. They contracted that the signature of the payees was genuine, and it turned out to be a forgery; that alone rendered them liable. ( Goddard v. The Mechanics' Bank, 4 Comst. R., 147.) The judge committed no error in refusing to charge the first request of the defendants, for the reason that there was no evidence in the case that would have justified any such finding by the jury; and besides, as to negotiable paper, the rules of law would not justify such a charge. If the signatures of all the prior parties to the check were in fact forged by Miaglia, the defendants are notwithstanding liable, as by their indorsement, they impliedly guaranty, the genuineness of all the prior signatures to the paper. The next request is equally untenable; first, for the reason that the evidence would not justify a verdict that Miaglia feloniously, and without the consent of the defendants, took the check with their indorsement from them, and the defendants' liability would not be changed, even did he take the check without their consent; but it is apparent that he did not do so. The defendants indorsed the check in the presence of Miaglia, and presented it to the bank, and the cashier inquired of the defendant presenting the same, if he was acquainted with the payees, and when he told the cashier he was not, but that he knew Ball, Black Co., and they said the check was all right, the cashier, finding that they did not know the signatures of the payees, and whether the same was genuine, very properly advised the defendants not to have the check cashed; and thereupon Miaglia took the check and put it in his pocket, without any objection from the defendants. The defendants had paid nothing for the check, and as regards them, the check belonged to Miaglia, and if they saw fit to allow him to take it, and retain it with their indorsement upon it, they must be held liable to any subsequent holder in good faith, as indorsers of the check. The third request to charge is wholly untenable, when the indorsement of the payees is found by the jury to be a forgery, as we have shown. No error was committed in the charge. There was certainly nothing in the case that should have put the plaintiff upon inquiry as to this indorsement of the payees.
The evidence to show that Ball, Black Co. intended to make this check payable to the payees in the Martin check, which they then received from Miaglia, and that the clerk was so directed to fill it out, was properly received. The evidence had no materiality, so far as it went to explain the discrepancy in the spelling of these names, but it was material to show that it was not intended to make it payable to Miaglia, or to fictitious persons, so that Miaglia could use it without the indorsement of the payees. Miaglia was a stranger to them, and they took the precaution, probably, to make their check payable to the indorsers upon the check which they received from him, so that he would have to procure their indorsement before using it. The case of Coggill v. The Am. Ex. Bank (1 Comst. R., 113) shows that this evidence was competent. That this evidence was competent is pretty apparent, I think, to the appellant's counsel, for it furnishes a perfect answer to his fourth point made upon this appeal, which is that this check was payable to fictitious persons, and Miaglia could transfer it so as to give a good title without any indorsement. The judgment of the Superior Court was right and should be affirmed.
All the judges concurring, judgment affirmed.