(dissenting):
The defendants herein for value received at the city of New York drew a bill of exchange in duplicate parts of even tenor and date upon the Société Générale of Paris, France, requiring it to pay in Paris, at sight, to the order of J. Palau & Co., a .firm of Barcelona, Spain, the sum of 2,500 francs in French currency. Such parts were both mailed on March 28, 1905,.to said J. Palau & Co.'; one part being sent per “ S. S. Baltic,” and the other per “ S. S. La Bretagne.” Ho instructions had been given by the payees as to the method of delivery of the bill and they were unaware of its existence until the second part thereof was delivered to them through the mail at Barcelona, the said bill having been remitted by the defendants to J. Palau & Co. in payment of a debt due the latter by a third party, who had placed the defendants in possession of funds for the purpose, and had instructed them to make the said remittance, which defendants undertook to do and for which they charged and received from said third party the usual rate of exchange.
The first part of said bill of exchange was never received by J. Palau & Co., and when the second part received by them, had been duly indorsed and negotiated in the course of business, it was, on April 12, 1905, duly presented by a subsequent indorsee to the drawee for payment, and payment thereof was réfused upon the ground that the first part of said bill had, in the course of business, been presented for payment to said drawee on April 11, 1905, and on that date paid to the holder thereof, whereupon the second part was duly protested and notice of dishonor duly-given.
It is further alleged that when the first part of said bill was pre: sented to the drawee for payment and paid it bore several indorsements, each following the other, and all apparently correct on their face; and the drawee paid said bill over its counter in good faith to *304the person presenting the same, in the - belief that it. was making payment of said bill to the lawful holder thereof-, although before-making such payment it did not take any steps to ascertain the identity of the person presenting the same or the genuineness of the indorsements ¿hereupon. All of such indorsements on- said first part of the bill are alleged to be forgeries and the names of all the indorsees thereon, except that of J. Palau & Co., are alleged to be the names of fictitious persons. It is conceded that the-payment as aforesaid of the first part of the bill was made without opposition and at maturity, and the defendants upon whom demand has ..been made, as well as the drawee, refuse to pay the second part of the bill on the ground that the payment of the first part of the bill was a valid payment under the French law, by virtue of the provisions of articles 144 and 145 of section 9 of title 8 of the French Code of Commerce then and now in force, and that consequently the defendants are discharged from all obligations to pay the second part of said bill. Such sections of the French law, translated into English, read as follows:.
“ Section 144.'-The party who pays a bill of exchange before its maturity is responsible for the validity of the payment.
“Section 145.- The party who pays a bill of exchange at its maturity and without opposition is presumed validly discharged.”
The plaintiff is the assignee and indorsee of the setiond part of the bill, and of the cause of- action thereupon, and his complaint sets forth substantially the foregoing facts-.
To this complaint the defendants demur .and the question presented is whether such facts set forth a good cause of action. Under section 111 of the Negotiable Instruments Law of this State the defendants would be liable as drawers of the bill in suit, unless they have been discharged by a valid payment made by the drawee. It cannot be doubted that, so far as the payment of this bill, is concerned, its validity is to be determined by the law of France, being the place whereat payment was to be, made. Under the French Code of Commerce it seems clear that a rule of evidence has been laid down whereby the burden of proof is upon the drawee to establish the validity of the payment made by him if he pays the bill before maturity. If, on the other hand, the bill is paid at maturity and without opposition, then a different rule applies and *305a presumption is created of a valid payment, which puts the burden of proof upon the payee of proving that the payment was, in fact, unlawfully made.
It is difficult to see upon what theory the presumption created under section 145-of the Code of Commerce can be held to be a conclusive one. It would seem that such presumption is like any other which can be met and overcome by proof. In this case the plaintiff sets forth acts of negligence upon the part of the drawee, which, if proven, would be sufficient to make the payment of the first part of the bill, unavailable as' a defense to payment of the second part. This would seem to be clear on reason and is supported by the French commentators. G-oirand in his commentary on “French Commercial Law” (2d ed. p. 210), treating of article 145, says: “ When the payment has been made at the date of maturity, it cannot be disputed, nor can the drawee be compelled to pay over again. It is otherwise, however, when the drawee has been served with an opposition to the payment of the bill. It must be remarked that this presumption of payment having been validly made, ceases if grave negligence can be imputed to the drawee; consequently, the drawee, in order to pay with full security, must take certain precautions. Thus, he. must on presentation of the bill, examine it, in order to convince himself that the holder is the rightful owner. He must verify the chain of .endorsers, and, if it be broken, refuse payment. In other words, he must examine if all the signatures of the endorsers follow each other regularly and correspond, and whether each endorsement is followed by the signature of the endorser whose name is mentioned in the preceding endorsement, as it is this latter only who is the proprietor of the bill, and who has the right to transfer it.”
For these reasons it appears that the complaint sets forth a good cause of action, and that the determination of the Appellate Term and the judgment of the Municipal Court should be reversed, with costs in this court and in the Appellate Term, and the demurrer overruled, with costs, with leave to the defendants to withdraw the demurrer and to answer upon payment of said costs.
Laughlist, J., concurred.
Determination affirmed, with costs.