Price v. Neal
3 Burr. 1354
(King’s Bench, 1762)
Facts:
The bill was drawn to the order
of Mr. Rogers Ruding or order for value six weeks after November 22, 1760. The
drawer, Benjamin Sutton, to drawee, John Price, signed the draft. The draft was
indorsed by “R. Ruding, Antony Top-ham, Hammond and Laroche. Received the
contents, James Watson and Son, witness Edward Neale.” The bill was indorsed to
Neal for a valuable consideration and, was then brought to Price’s home on the
date it became due. Price had his servant call on Neal to pay the bill’s sum of
40£ and take up the said bill, which was done accordingly. The second draft was
dated February 1, 1761 with the same language except the indorsement. This bill
was indorsed by “R. Ruding, Thomas Watson and Son. Witness for Smith, Right and
Co.” Price accepted this bill by printing “Accepted John Price:” and on the
back printed “Messieurs Freame and Barclay, pray pay forty pounds for John
Price.” The second bill was indorsed to Defendant for a valuable consideration,
and left at his bankers for payment. A man named Lee forged both bills.
Defendant acted innocently and bona fide, and had no knowledge of the bills
forgeries, which he paid full value for.
Procedural History:
Price’s argument:
that Defendant, Neal, was indebted to him for 80£ for money had
and received: and damages were laid to 100£. Plaintiff should recover back the
money as he paid them by mistake believing “that these were true genuine bills.”
Plaintiff “could never recover it against the drawer, because no drawer existed;
nor against the forger, because he is hanged.” The jury found a verdict for the
Plaintiff; and assessed damages of 80£ and costs 40s.
Neal’s argument:
that the Plaintiff was not entitled to recover back this money
from the Defendant.
Issue:
Can a person acting as drawee recover from an opposition the money paid for the
bill(s)?
Holding:
No. If there is any fault or negligence in a drawee by not inquiring the authenticity of the bill(s) from the drawer, then that person in fact must pay the bill(s).
Rationale:
Jenys v. Fawler – “an action by an indorsee of a bill of exchange brought against
the acceptor.” The forgery of the bill does not rest in belief and opinion only,
but has been actually proved, and the forger executed for it.
Since the drawer accepted the second bill, it stands. The Plaintiff’s case is
much stronger against the bill that was not accepted or bearing the statement
“that this bill was accepted before it was negotiated.” It was Plaintiff’s
incumbency to be satisfied that the bill was issued by the drawer before he
accepted or paid it. It was not mandatory for Defendant to inquire about the
bill before he paid value for it. Plaintiff neglected to make any objections to
the bills at the time of paying them.
Disposition:
In favor for Defendant.
Notes:
(concur/dissent)
-Defendant took the
bill upon the credit of the indorsers, not upon the credit of the drawer or
Plaintiff.
- “It is an action upon the case, for money had and received to the Plaintiff’s use. In which action,
the Plaintiff can not recover the money, unless it be against conscience in the
Defendant, to retain it.”