Mills v. Barney

Crocker, J. delivered the opinion of the Court—Cope, C. J. and Norton, J. concurring. In the year 1859, Joseph Cox, deposited with the plaintiffs, who are bankers, in the City of Sacramento, the sum of $2,000, for which they issued to him a certificate of deposit, in the usual form. Afterwards, in 1861, the certificate was presented for payment at their banking house, indorsed as follows : “ Pay to the order of Daniel Clark. “ JOSEPH (his X mark) COX. “ Pay to the order of Wells, Fargo & Co. “DANIEL CLARK. “ Indorsement of Daniel Clark is correct. “ W. F. & CO.—ELDRIDGE.” It was duly paid upon presentation, to the agent of Wells, Fargo & Co., the defendants. Immediately after the payment, it was noticed that the indorsement of Wells, Fargo & Co. did not certify to the genuineness of the signature of Cox, and one of the plaintiffs proceeded with the certificate to the office of the defendants, and there found one Hayden, an agent of defendants, from whom they demanded a repayment of the money, or a guarantee of the genuineness of Cox’s signature. Hayden thereupon wrote upon the back of the certificate, “ For Wells, Fargo & Co.—Hayden,” and handed it back, saying, “ That makes it all right,” and he then returned with it. It seems that the certificate had been lost by or stolen from Cox, and that his pretended signature was a forgery. After the payment of the certificate to Wells, Fargo & Co., Cox sued the plaintiffs to recover the amount of the certificate, and they gave immediate notice thereof to Wells, Fargo & Co., and endeavored, unsuccessfully, to make them parties to the action, the motion to that effect being opposed by the defendants. Cox recovered judgment in that suit against the plaintiffs on the first day of November, 1861, for $2,125 53, which they paid. They then demanded of the defendants the repayment of the amount thus paid by them, which was refused, and the plaintiffs then brought this action to recover the same. At the trial the jury found the following special verdict: — 247 — 1st. Did the defendants receive from plaintiffs, on delivery of the certificate of deposit in evidence in this case, the sum of $2,000 ? Answer—Yes. 2d. Did the defendants receive said sum as principals, or as agents for Daniel Clark ? Answer—As agents for Daniel Clark. 3d. Did D. 0. Mills & Co. know at the time the money was paid to the defendants that the defendants were only acting as agents ? Answer—No. 4th. Did the defendants, in the course of business, pay the money collected by them to said Daniel Clark ? Answer—Yes. 5th. Did the plaintiffs have notice at or before they paid the said $2,000 to defendants that the indorsement of Cox on the certificate was a forgery ? Answer—No. 6th. Had the plaintiffs notice before such payment that Cox had lost said certificate ? Answer—No. 7th. How much money did plaintiffs pay to Cox in the suit of Joseph Cox v. I). O. Mills $ Co. ? Answer—$2,125 53. 8th. Did the defendants, by their agent, Hayden, guarantee the genuineness of the signature of Joseph Cox? Answer—Yes. 9th. Did defendants, by indorsement, contract with plaintiffs to idemnify them against loss by reason of the want of indorsement of Joseph Cox ? Answer—Yes. 10th. Were the plaintiffs guilty of any negligence in paying the money, on presentation of the certificate, without verifying the signature of Joseph Cox ? Answer—No. Judgment was rendered on this verdict in favor of plaintiffs, from which defendants appeal. The first error assigned is that the complaint does not state facts sufficient to constitute a cause of action. In support of this it is argued that the right to recover depends upon two grounds, either that the money was paid by mistake, or that the defendants are liable as guarantors of the genuineness of the indorsement of the payee, and that the facts upon which these different claims of recovery are founded are all stated in one complaint. We do not deem these valid grounds of objection. It was only necessary for the plaintiffs to state the facts of their case in ordinary and concise language, and if such facts showed that they had a right of action — 248 — against the defendants, it is clearly sufficient, even though it also showed that they had a right to recover upon two different legal grounds. It may be that the plaintiffs paid the money to the defendants by mistake, and also hold them liable as indorsers or guarantors. Either would constitute a good cause of action, and it does not make their complaint insufficient because they have two good grounds of recovery instead of one. The next point urged is that there was no evidence to show that Hayden was authorized to bind the defendants by giving a guarantee or indorsement, and that the special findings of the jury upon that point are not sustained by the evidence. It is not denied that there was some evidence to support these findings, and in such cases, when the evidence is conflicting, this Court will not disturb the verdict, especially when it is sustained by the Court below, on motion for new trial, as in this case. It is also contended that there was no evidence to show that the defendants were guarantors or indorsers of the genuineness of Cox’s signature. The certificate was indorsed by Clark, payable to the order of Wells, Fargo & Co., and the plaintiffs were not bound to pay it until indorsed by them. (Canal Bank v. Bank of Albany, 1 Hill, 287.) Their indorsement by Hayden was found to have been made by their authorized agent, and, therefore, binding upon them by the special verdict. By this indorsement the defendants, in contemplation of law, undertook that they possessed a clear title to the certificate deduced from and through all the antecedent indorsers, and they agreed thereby to clothe the holder under them with all the rights which legally attach to genuine indorsements against themselves and all the antecedent indorsers. As such indorsers, they cannot complain if called upon to repay the money which they have received upon their indorsement of a title which turns out to be void on account of the forgery of the antecedent indorsement, for there is a total failure of the consideration on which the transfer was made. (Story on Prom. Notes, Sec. 380 and note.) The law upon this point seems to be well settled, as applicable to bills of exchange and promissory notes, and certificates of deposit stand in these respects upon the same footing as promissory notes. (Welton v. Adams, 4 Cal. 30; McMillan v. — 249 — Richards, 9 Id. 418; Coye v. Palmer, 16 Id. 159.) This objection, therefore, is not a valid one. The law relating to guarantees has no bearing upon the present case. The fact that the special verdict refers to the liability of the defendants as being a guarantee, does not bring the case within the rales of law relating to guarantees. The evident meaning is, that the defendants, by their agent, Hayden, undertook and agreed that the signature of Cox was genuine. Such is clearly the rule of law applicable to cases of this kind. The case of the Canal Bank v. The Bank of Albany (1 Hill, 287) is very similar to the present, and many of the points insisted on by the appellants were passed upon and ruled against them by that Court. The opinion delivered by Justice Cowen in that case is a masterly exposition of the law upon the subject. (See, also, Dick v. Leverich, 11 Louis. 576; Talbot v. Bank of Rochester, 1 Hill, 295; Hartsman v. Henshaw, 11 How. 183; Harris v. Bradley, 7 Yerg. 310; Olivier v. Andy, 7 Louis. 496; Herrick v. Whiting, 15 Johns. 240; State Bank v. Fearing, 16 Pick. 533.) If the jury had used the word “ warranty ” instead of guaranty, it would have more clearly expressed their meaning, but the difference in the terms used is not sufficient to avoid the effect of the verdict. It is also objected that the third finding of the special verdict is contrary to the evidence. It is not contended that there was any direct proof that the plaintiffs knew at the time the money was paid to the defendants that they were only acting as agents, but it is urged that it is fairly to be inferred from the evidence. It was for the jury to determine this matter, and we see no good reason for setting aside them finding upon this point, or upon the question whether the plaintiffs were guilty of negligence in paying the money. The next error assigned is the admission in evidence of the judgment roll in the case of Cox v. Miller & Co., the defendants not being parties thereto. We do not see how the defendants were prejudiced in any way by the admission of this evidence. It is true they were not parties to that action, but the plaintiffs endeavored to make them parties, and they had full notice of the suit, but refused to become parties to it. The plaintiffs in their complaint — 250 — averred that such a suit was commenced, prosecuted, and a judgment rendered therein, and it was certainly admissible to prove those allegations, whatever its effect may have been, by way of concluding the defendants, or estopping them from denying the truth of the issues found and determined in that action. If this judgment roll was not necessary to make out the plaintiffs’ case, its admission was merely surplusage, and could not injure the defendants. If it was necessary, then they have no right to have it excluded. It was not necessary to introduce it to prove that Cox’s signature was a forgery, for that fact was not in issue, it being averred in the complaint and not properly denied by the answer, the pleadings being sworn to. It is also assigned for error, that the costs paid by plaintiffs in the case of Cox v. Mills & Co. were included in the judgment. It seems to have been held that in actions like these against the indorser of a note or bill, the indorser is liable for such costs (Scott v. McLellan, 2 Green. 199; Hubbly v. Brown, 16 John. 70; Jones v. Brooke, 4 Taunt. 464; Birt v. Kershaw, 2 East. 458; Edmunds v. Lowe, 8 Barn. & Cress. 467), and we therefore overrule that objection. The last objection of the appellants is that a demand is necessary in this case to hold the defendants liable, that no special demand is averred in the complaint, and none proved on the trial. It is doubtful whether a special demand was necessary in this case; but if necessary, the objection is not valid. The complaint avers that soon after the suit of Cox was instituted, they notified the defendants of the action, and moved the Court to make them parties, of which motion they were duly notified, and they appeared and opposed the same. After setting forth the facts relating to the liability of the' defendants, and stating the amount, the complaint avers—“ which, although requested, they have hitherto and still do refuse to pay.” These averments are not denied by the answer, and no objection was made to the sufficiency of the averments in the complaint by demurrer, answer, or otherwise, either before or at the trial, or at any time in the Court below. Nor was a want of demand set up as a defense; but it is now, in this Court, for the first time, insisted that the averment of demand is insufficient, — 251 — because if does not state when or by whom made. There is no doubt that in pleadings in common law actions, whenever a special demand was necessary, that it was required to be stated in that mode, and that the general averment of “ although often requested” was not sufficient, but such pleadings were not required to be sworn to. In the present case there is a specific averment in the complaint, duly sworn to, that the defendants were requested, and refused to pay the amount claimed; and this fact, not being denied, is admitted by the answer. The objection is that the averment is not sufficiently certain, because it does not state the particular circumstances of time and the parties to the demand. We think that objection can only be raised by demurrer, for want of certainty, that any such defective averment is cured by the verdict and judgment, and the objection cannot be raised in this Court for the first time. Had it been pointed out in the Court below, it could have been cured by amendment. Judgment affirmed.