TURNBULL v. BOWYER, N.Y., Judgment, Law, casemine.com

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Attorney(S)

Francis Byrne, for the appellant. Wheeler H. Peckham, for the respondent.

Judges

Charles Mason

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Smart Summary

Factual and Procedural Background

This case involves a dispute over a commercial check which was indorsed in blank by the defendants and subsequently transferred by a person named Miaglia. The plaintiff, Andrew Turnbull, purchased the check in good faith and for value from Miaglia. The defendants did not object when Miaglia received the check after their indorsement. The key issue arose because the indorsement of the payees on the check was found by the jury to be a forgery. The trial court submitted the question of the genuineness of the payees' indorsement to the jury, which found it forged. The defendants appealed the judgment against them.

Legal Issues Presented

Whether a bona fide purchaser of commercial paper obtains good title even if prior indorsements are forged.
Whether the defendants, as indorsers of the check, are liable to the plaintiff despite the forgery of the payees' indorsement.
Whether the defendants' liability is affected by Miaglia’s possession and transfer of the check without their objection.
Whether the plaintiff was obligated to protest the check to hold the defendants liable.
Whether the check was payable to fictitious persons and if that affected the plaintiff’s title or the defendants’ liability.

Arguments of the Parties

Appellants' Arguments

The defendants argued that the indorsement of the payees was a forgery and thus they should not be liable.
They contended that Miaglia may have taken the check feloniously and without their consent, which should absolve their liability.
They requested the court to charge the jury that the defendants were not liable if the indorsement was forged or if Miaglia took the check without consent.
They claimed the check was payable to fictitious persons, implying Miaglia could transfer it without the payees' indorsement, thus affecting the plaintiff’s title.

Respondent's Arguments

The plaintiff contended he was a bona fide purchaser for value and relied on the implied warranty by the defendants that all prior indorsements were genuine.
He argued that the defendants, having indorsed the check in blank and allowed Miaglia to take it without objection, were liable as indorsers to subsequent bona fide holders.
The plaintiff maintained he was under no obligation to protest the check to hold the defendants liable.
He disputed the claim that the check was payable to fictitious persons, relying on evidence that the check was intended to be payable to the payees named in the Martin check.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Edwards on Bills and Promissory Notes, pp. 308-310	A bona fide purchaser of commercial paper obtains good title even if the paper was stolen and transferred by a thief.	Established that bona fide holders after the defendants must be regarded as holding under valid indorsements despite the forgery issue.
Story on Promissory Notes, §§ 135, 379, 380, 387	An indorsement of commercial paper is a contract guaranteeing the genuineness of the instrument and prior signatures to subsequent holders.	Supported the court’s finding that defendants, as indorsers, impliedly warranted the genuineness of all prior indorsements.
Goddard v. The Mechanics' Bank, 4 Comst. R., 147	Indorsers are liable for forged prior indorsements under implied warranty even without protest by the holder.	Confirmed the defendants' liability was fixed prior to presentment and did not depend on protest.
Coggill v. The American Exchange Bank, 1 Comst. R., 113	Evidence of the drawer’s intent regarding payee’s identity is competent to establish the validity of the payee’s indorsement.	Supported admission of evidence showing the check was not intended to be payable to fictitious persons or Miaglia, undermining appellants' argument.

Court's Reasoning and Analysis

The court began by reaffirming the principle that a bona fide purchaser of commercial paper obtains good title, even if the paper was stolen and transferred by a thief. However, the check in question was not stolen from the defendants, and they indorsed it in blank and allowed Miaglia to take it without objection. Therefore, subsequent bona fide holders, including the plaintiff, must be regarded as holding under valid indorsements from the defendants.

The court emphasized that an indorsement constitutes a contract guaranteeing the genuineness of all prior signatures on the instrument. Since the jury found the payees' indorsement to be a forgery, the defendants, as indorsers, were liable to the plaintiff under an implied warranty that the indorsements were genuine.

The plaintiff, having purchased the check in good faith and for value, was entitled to recover from the defendants despite the forgery. The court rejected the defendants' argument that the plaintiff was required to protest the check, holding that the defendants' liability was fixed before presentment.

The court further analyzed the defendants' contentions that Miaglia took the check without consent and that the check was payable to fictitious persons. It found no evidence that Miaglia feloniously took the check; rather, the defendants indorsed it in Miaglia’s presence and allowed him to retain it without objection. Regarding the payee issue, evidence showed the check was intended to be payable to the named payees, not fictitious persons or Miaglia, which was relevant to the validity of the indorsement and the plaintiff’s title.

Accordingly, the court found no error in the trial court’s refusal to charge the jury as requested by the defendants, and affirmed the judgment in favor of the plaintiff.

Holding and Implications

Judgment Affirmed.

The court held that the defendants, as indorsers of the check, were liable to the plaintiff, a bona fide purchaser, for the amount of the check due to their implied warranty that all prior indorsements were genuine. The plaintiff was not required to protest the check to establish liability. The defendants’ liability was not negated by Miaglia’s possession or transfer of the check nor by arguments that the check was payable to fictitious persons. This decision directly affects the parties by confirming the defendants’ liability and upholding the plaintiff’s recovery. The opinion does not establish new precedent beyond reaffirming existing principles regarding bona fide purchasers and indorser liability in commercial paper transactions.

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ANDREW TURNBULL, Respondent, v. MARCK BOWYER and PIERRE ROUTEY, Appellants.

MASON, J.

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.

TURNBULL v. BOWYER