acceptor, although the forged name was on the bill at the time of the acceptance. Mead v. Young, 4 T. R. 28; Esdaile v. La Nauze, 1 You. & Coll. 400; 8 Man. Gr. & Scott 870. And if the holder has received the money from the acceptor, and the forgery is afterwards discovered, he will be compelled to repay it, if on such discovery reasonable diligence is used in giving notice of the forgery. Canal Bank v. Bank of Albany, 1 Hill 287; Talbot v. Bank of Rochester, Id. 295; Dick &c. v. Levinck, 11 Louis. 576. The reason of the rule is obvious. A forged endorsement cannot transfer any interest in the bill, and the holder therefore has no right to demand the money. If the bill is dishonoured by the drawee, the drawer is not responsible. And if the drawee pays it to a person not authorized to receive the money, he cannot claim credit for it in his account with the drawer. Taney, C. J., 11 How. 183. This view is consistent with-indeed goes to sustain the judgment in the case of the Bank of Commerce v. Union Bank, cited ante, p. 158; for that was the case of a payment to a person not authorized to receive the moneya case therefore in which for what was so paid, the drawee could not claim credit in his account with the drawer.

5. Acceptor liable to holder where bill is drawn payable to a person having no existence.

When an action is brought on a bill payable to a person having no existence, great consideration is given to this fact; especially if it was known to the party who received the value of the bill and is called upon to repay it. Stone v. Freeland,

3 T. R. 316, note.

It was decided in Lord Raymond's time that indebitatus assumpsit would lie to recover the value of a bill of exchange drawn payable to bearer. Ward v. Evans, 2 Ld. Raym. 930. That doctrine was confirmed in Grant v. Vaughan, 3 Burr. 1517. "Undoubtedly," says Lord Mansfield, "an action for money had and received to the plaintiff's use may be brought by the bona fide bearer of a note payable to bearer. It was certainly money received to the use of the original advancer of it; and if so it is for the use of the person who has the note as bearer." Yates, J., expressed a similar opinion. Id. 1529. On this decision Lord Kenyon grounded his opinion in Taplock v. Harris, 3 T. R. 182. In an action against acceptors of a bill payable to a fictitious person, the plaintiffs recovered on a count stating the bill as drawn payable to bearer. Vere &c. v. Lewis &c. 3 T. R. 182; Minet &c. v. Gibson &c. Id. 481.

Bills to the value of near a million a year had passed through the houses who were parties to the bills in the last cause. Id. 483. There was an appeal from the decision of the king's bench to the house of lords; and pending that appeal the question was before the common pleas.

Livesey & Co. having a power broad enough to admit of their drawing a bill in the name of John Emett payable to bearer, drew it payable to G. C. or order, and endorsed it in the name of G. C. when in fact there was no such person. This instrument coming to the hands of a bona fide holder for value, and it being impossible to prove the order of a person who had no existence, the common pleas, like the king's bench, adjudged it to have the same effect as if it had been made pay-ble to bearer. "A bill of exchange," Ld. Loughborough said, "is an authority to pay pursuant to the order of the payee; and it is also an undertaking to pay pursuant to that order. But if there be no person who by any possibility can give such order, the engagement must be to pay the bill. If the order of the person cannot be procured, and with the knowledge and privity of the parties who make the bill such a name is put in as cannot give an order, it is in effect, and in point of law, the same thing as if they had made it payable to the person who held the bill, namely the bearer." Collis v. Emett, 1 H. Bl. 321.

In the house of lords after hearing the opinions of the judges, Lords Kenyon, Loughborough and Bathurst expressing themselves in favour of the judgment of the king's bench and Lord Thurlow against it, that judgment was affirmed. Gibson &c. v. Minet &c. 1 H. Bl. 569-625, 2 Brown's Par. Cas. (Tomlin's edi.) 48-61. This decision soon reached the United States and was adopted by the supreme court of Pennsylvania in an action against the acceptor of a bill drawn by the same house of Livesey, Hargreave & Co. Hunter v. Blodget, 2 Yeates 480.

Under such circumstances as existed in these cases, no distinction can be made between the drawer and acceptor of the bill. Price v. Neale, Burr. 1354; Gibson &c. v. Minet &c. 1 H. Bl. 590; Gibson &c. v. Hunter, 2 H. Bl. 187, Brown's Par. Cas. (Tomlin's edi.) 235. A bill of exchange, payable to a fictitious payee or order, and endorsed in his name by concert between the drawer and acceptor, is considered as a bill payable to bearer, whether the action be against the drawer or acceptor of the bill, if the plaintiff in such action be an endorsee for valuable consideration without notice of the fictitious nature of the bill. S. C. It is otherwise if the VOL. II.-11

plaintiff when he took the bill had such notice. Hunter v. Jeffery, Peake's Add. Cas. 146.

When the bill is drawn in the name of, as well as payable to a fictitious person, and the acceptance is given on the credit of the person who in fact made and endorsed it, the acceptor may then be considered as undertaking to pay to the signature of that person. Cooper v. Meyer &c. 10 Barn. & Cress. 468, 21 Eng. Com. Law Rep. 116; 2 Bingh. N. C. 544.

6. Acceptor liable to holder though payee's name be forged, if with that name on it bill was passed by drawer to holder.

If the persons in whose name the bill is drawn and to whom it is made payable really existed, but their signature was forged, then it is a question in England whether the acceptor is to be considered as having undertaken to pay to any one who held the bill by an endorsement in the same handwriting. Beeman v. Duck, 11 M. & W. 251. On the part of the defendants it was insisted in this case that though the acceptance of the bill drawn and endorsed in the name of B & W, admits that the bill was drawn in the name of B & W, by themselves or some agent authorized to draw in their name, it does not admit that it was endorsed by themselves, or some agent authorized to endorse, which is a different species of authority. "We cannot," said Parke, B. "help thinking there is great weight in that argument if the defendant accepted the bill in ignorance of the forgery; but if he knew of it and intended that the bill should be put into circulation by a forged endorsement in the name of the said firm, by the same party who drew it, the case seems to fall within the principle of that of Cooper v. Meyer."

In the United States, it is not necessary to shew that the acceptor knew of the forgery. It is enough that the holder. has a good title to the bill so that the acceptor on paying it can properly charge the amount against the funds of the drawer in his hands, if there be any; and if there be none, that he may have an action against the drawer for money paid to his use. Bronson, J. in Coggill v. Am. Exch. Bank, I Comstock 118. Such is the condition of the parties when the drawer has passed the bill to the holder, with the name of the payee endorsed upon it; thereby affirming that the endorsement was genuine, so that the bill might be negotiated by delivery, and by such representation inducing the holder to take it. S. C. 119.

Proof that the payees of a note had parted with their interest by endorsement is not necessary if the maker of a note

make it payable to a fictitious name, which he writes on the note and then puts it in circulation; or if he make it payable to a real person and forge his endorsement, or procure it to be done, and then put it in circulation. In these cases the drawer is estopped to say that endorsement was not genuine which he has represented to be so, by putting it in circulation. Meacher v. Fort, 3 Hill's (S. C.) Rep. 229.

This rule is applied when the payee had no interest in the note, and it was not intended that he should become a party to the transaction. Foster v. Shattuck, 2 N. Hamp. 446; Coggill v. Am. Exch. Bank, 1 Comstock 118. Notwithstanding what was said in Dana v. Underwood, 19 Pick. 99, this is considered sound doctrine. It is not important to know who put on the bill the name of the payee.

If the payee named in the bill never was the owner of it— if it was not drawn with the intent that he should either endorse it, or have any interest in or concern with it-the acceptor, after paying the money to a holder for value, will not be allowed to recover it back from such holder, because of the forgery of the name of a payee, who, having no title, could, in no event, have a legal claim to the money. As against the drawers it is different. The acceptor having paid money for them in pursuance of their request, has the same remedy against them that he would have had if the endorsement had been genuine. Coggill v. Am. Exch. Bank, 1 Comstock 117. Such are the principles established in the highest courts of several states. A like doctrine is maintained in the supreme court of the United States. The decision in Coggill v. Am. Exch. Bank, though made in November 1847, does not appear to have been cited in the supreme court, when in December 1850 it decided the case of Hortsman v. Henshaw &c. 11 How. 183; but the judgment is alike in each case, and the conclusion arrived at by a similar course of reasoning.

"We take the rule," says Taney, C. J., "to be this: whenever the drawer is liable to the holder, the acceptor is entitled to a credit if he pays the money; and he is bound to pay upon his acceptance, when the payment will entitle him to a credit in his account with the drawer. And if he accept without funds, upon the credit of the drawer, he must look to him for indemnity, and cannot upon that ground defend himself against a bona fide endorsee. The insolvency of the drawer can make no difference in the rights and legal liabilities of the parties." Hortsman v. Henshaw &c. 11 How. 183.

CHAPTER XX.

EFFECT OF THE STATUTE OF ANN ON A PROMISSORY NOTE; WHAT IS A NEGOTIABLE INSTRUMENT ON WHICH AN ACTION MAY BE BROUGHT UNDER THAT STATUTE OR THE VIRGINIAN STATUTE.

1. Cases before the statute of Ann; effect of the decisions.

At common law though a bond without consideration was good, yet a note without consideration was not good; not even by custom. Pearson v. Garret, Skinn. 398. Hence there was difficulty in sustaining an action on the note itself. In the 3 W. & M., an action of assumpsit was brought on the note of a goldsmith promising to pay £ 55 to W. B. or the bearer; but notwithstanding the custom of London set forth in the declaration, the plaintiff failed. Horton v. Coggs, 3 Lev. 299. The bearer, it was admitted, could not sue upon such a note in his own name. Gould, J., did not regard Horton v. Coggs as resolving that the party himself (to whom such a note was payable) could not have an action upon it on the custom of merchants, but Holt, C. J., considered that case to hold that the note was not a bill of exchange. Clerke v. Martin, 2 Ld. Raym. 758, 1 Salk. 129. In this case one count was on the custom of merchants, as upon a bill of exchange, and shewed that the defendant gave a note promising to pay to the plaintiff or his order. This count and a like count in Williams v. Cutting, 2 Ld. Raym. 825, were adjudged bad.

Thus, in the 1st year of the reign of Ann, it was settled that at common law no suit could be maintained on a promissory note as such by the payee against the maker. Nolan v. Ringgold, 3 Har. & Johns. 217.

Judge Cranch (in 1 Cranch 462, note B.) has expressed the opinion that the case of Clerke v. Martin was directly contrary to the whole current of authorities prior to that time, particularly to the case of Williams v. Williams, 5 W. & M., Carth. 269. He does not assent to the correctness of Lord Holt's opinion, that at common law, though a promissory note might have been evidence of a debt, it did not constitute a debt per se, and would not sustain an action upon it, whether brought by the maker or payee. But Lord Holt's view has been since sustained in England. Frier v. Bridgman, 2 East 359. It certainly caused resort to the legislature for a remedy. 4 T. R. 151; 3 Har. & Johns. 217.