Dick v. Leverich

Bullard, J., delivered the opinion of the court. This is an action by the acceptors of a bill of exchange, to recover back from the defendant the amount of it, upon an . ... allegation that the endorsement of the original payee was forged, and that the plaintiffs had been compelled to pay him a sec011d time the amount of the bill. The bill appears to have been drawn by Craighead on the plaintiffs, payable to the order of one Troy, and it purports to bear the endorsement s 0f Troy, and afterwards of Henry Haines & Co., from J 3 J 7 whom it was received by the defendant. It was paid to the defendant at its maturity. The district court gave judgment in favor of the defendant, and the plaintiffs appealed. ^ *s a we^ setded principle of the commercial law, that when a bill is assignable only by endorsement, a person who . ., j. , , , 1 obtains possession of it by a forged endorsement, acquires no interest in it, although ignorant of the forgery, and that the . . . . ’ b b , original holder may recover of the acceptor, although the latter,may have paid it. Chitty on Bills, 162. It follows, therefore, that the acceptor, who paid in error to one who . , . , , . , had no right to receive, has a right to recover back the amount. Bui; the only evidence in the record, to prove the forgery 1 ° J of Troy’s signature, is contained in the record of the suit instituted by him against the plaintiffs in Tennessee, to which the defendant was not a party. The verdict and judgment in that case was, perhaps, admissible, to prove the fact that such a recovery had been had, rem ipsam; but we cannot agree ^ie judge of the district, that they are conclusive upon .Leverich, unless he can prove fraud and collusion. He had [577] no opportunity to cross-examine the witnesses and to offer rebutting evidence. As to him, the whole proceeding was ex parte. To give to the judgment recovered against the plaintiff in Tennessee, the effect of res judicata, in relation to the defendant, as to all the facts in controversy in the case, who was neither cited nor notified of the proceedings, would be, in our opinion, to give a much greater faith and credit to the judicial proceedings of a sister state, than is contemplated by the act of congress. We have not inquired whether the right of the plaintiffs to recover in this case, depends upon their proving that they gave notice to the defendant, of the forgery, as soon as they discovered it. It is not pretended they knew it before the maturity of the bill. We think that the judgment, under the circumstances of this case, should be one of non-suit. It is, therefore, ordered, adjudged and decreed, that the judgment of the District Court be reversed, and that ours be for the defendant, as in case of a non-suit, with costs in the District Court, those of the appeal to be paid by the appellee.