dissenting. The facts out of which this suit has arisen, are as follows: On the 7th of November, 1850, a person unknown to Smith, who is a *623money broker, offered to him for discount, a bill of exchange for $3000, at ninety days after date, purporting to be drawn at Donaldsonville, November 5th, 1850, by W. C. S. Ventriss, in favor of W. P. Goddard, and by the payee endorsed, upon and accepted by Payne and Harrison, óf New Orleans. It is admitted, that the names of the drawer and acceptor are forged. Smith discounted the bill, and gave his check for $2908 67, on the Mechanics and Traders’ Bank, payable to the order of Payne and Harrison. The check was paid at the bank on the same day, to an unknown holder, the name of Payne and Horrin (or Horrim) being written thereon. Both the acceptance of the bill, and the endorsement on the check, are proved, by a member of the house of Payne and Harrison, to be forgeries. Payne and Harrison are not customers of the bank; but, being a prominent house, they pay, as testified by one of the house, large amounts of their discounted and collection paper in that bank. It is in evidence, that Smith had been for many years a customer of the bank, and was in the frequent habit of drawing his checks to order, when lie discounted mercantile paper. The motive would seem to have been, (though there is no admission or direct proof as to this particular case,) to guard against any want of title on the part of the person getting the discount, by making it necessary for him to go to Payne and Harrison, and get their endorsement. That Smith had doubts whether the acceptance was genuine, is quite improbable, considering he took it at a rate which is not pretended to be unusual. It is proper to add, that the appearance of the bill, which has been exhibited to us in the original, is not suspicious. The body and signatures, it seems to me, have a free and genuine character to one not acquainted with the handwriting of the parties. We may here observe, asa matter not proved in this case, but familiarly known to those who are acquainted with the daily course of business in New Orleans, and frequently shown by our own records, that money is raised, by or for the planter, through the accommodation acceptance of his factors, discounted in the New Orleans market; or the planter gives such bills for purchases, at his plantation, of western produce, pork, corn, horses, &c., from the passing flatboatman or drover. The acceptor, himself, is sometimes the party who gets the acceptance discounted, and puts the proceeds to the planter’s .credit in account.
The question we have to decide is, whether the bank has a right to charge Smith’s check, so issued and paid, to his debit in account. The district judge has decided in the plaintiff’s favor, and the bank has appealed.
It is said, that Smith committed the first fault in permitting himself to be imposed upon for want of proper previous inquiry; that he gave this stranger the means of imposing upon the bank, by the forged endorsement of a house whose signature was not in the bank; that he is'a broker, who receives propositions at his leisure, can tell the applicant to call again, and meanwhile inquire; that the paying teller is confined to his counter, and having a great press of business, cannot stop to verify every signature, and is only bound to know that the drawer’s name is genuine.
Some of these propositions are certainly not without force; but, it seems to me, that they cannot control the case, when we analyze the nature of the contract between the bank and Smith. What was it? The defendant agrees to receive his money on deposit, which is an advantage to the bank, because it has the use of the money, the deposit not being special; and agrees to pay it out as he may order. Now, here Smith ordered th’e bank to pay the sum to Payne and Harrison, or their order, to be shown by their endorsement. But the bank *624has not paid it to Payne and Harrison; but has paid it to soma one without their endorsement, and upon an endorsement which does not even purport to be theirs. The duty, therefore, which the bank, for a valuable consideration, undertook to perform, has not been fulfilled. Instead of paying as he directed, it has paid against his directions; and my brethren, as 1 understand, all think that in the payment of this check, “ there was gross negligence on the part of the clerk of the bank.”
As long as Smith kept himself within the terms of his contract with the bank, they would seem to have no right to inquire into, and find fault with his reasons for drawing the check to Payne and Harrison's order.
Smith had no intention to do the bank an injury in the course he pursued ; he merely used the right given to him, under his contract with the bank, for his own protection. If the bank had fulfilled its duty, by requiring a genuine endorsement, the guilty person would have been foiled.
The precaution taken by the plaintiff is not unusual. People frequently do it, without intending any wrong to the banks, or any idea that they are doing an act of which the propriety could be questioned. A person, for example, whom you do not know, brings you a tradesman’s account, which you pay by check to the tradesman’s order, thus guaranteeing yourself that the check must go into his hands, or else not be paid, and so you cannot be defrauded by a person untruly representing himself as the tradesman’s clerk. A business man would hardly say, that this was negligent or wrong.
My impression is, that it is not unusual among merchants, if a stranger presents a bill of exchange for payment, to ask him, if he is acquainted with any .respectable house or person, and if he names one, to give him a check to the order of such person or house. We are not informed, by the evidence, what passed between Smith and this stranger, and cannot know, since Smith could not offer himself as a witness; and no one else appears to have been present. For aught we know, Smith may have put this question to the stranger, and the check thus have taken the form it presents; or Smith might have supposed the person sent by the acceptors to get the bill discounted. We are not to presume bad faith on Smith’s part.
The learned counsel for the defendants, has asked us to apply to this case, the well settled rule respecting fictitious payees, to wit, that if a bill or note import to be payable to a person not in esse, or his order, and is issued with an.endorsement, in blank, purporting to be made thereon by him, it is, as against the drawer or maker, to be considered as a bill or note payable to bearer; and so is a bill as against the acceptor, if he knew, at the time of his acceptance, that the payee was a fictitious person. But this assumes that Payne and Harrison were fictitious payees. On the contrary, they were persons in esse, and the plaintiff intended that the stranger, who negotiated their acceptance, should go to them and get their endorsement.
It is said, there is no case in the books where the drawer has recovered, when the bill has been paid on a forged endorsement, and that Payne and Harrison are the only persons who could maintain an action against the bank. The reason why the books do not show such actions, is because the payee or endorsee, whose endorsement has been forged, is generally the party who, having been the holder of it, has lost its possession by accident or theft, and so has suffered the loss. But here Payne and Harrison never owned the check, but were merely intended by the drawer as intermediaries through whom the check should pass. The testimony of one of their house shows, that the only lawful *625interest is in the plaintiff, and, of course, by their intervention through one of their own house as a witness in this cause, they would be estopped from ever making any claim against the bank. .
Without being considered as expressing a positive opinion upon the point, I think it proper to add, that I am not prepared to say, that if the bill had been a genuine bill, which had been lost or stolen, and got unlawfully into the possession of this stranger, the true owner could have recovered the bill from Smith, upon the evidence we have before us. See the cases and authorities cited in Wilcox v. Beal, 3d Ann. 407.
In the case of Beal v. Wilcox, we said, that we did not consider it necessary under the facts of the case, to say, whether we were prepared to go to the full extent of the doctrine recognized by Mr. Story and in the English courts. We, however, noticed in that case, the opinion of that author, and the present condition of the law in England. It is not improper to refer to them again.
In his Treatise on Bills, § 194, Mr. Story observes: “For a considerable length of time the doctrine prevailed, that if the holder took the bill, under suspicious circumstances, or without due caution and inquiry, although he gave value for it, yet he was not to be deemed a holder bond fide, without notice. But this doctrine has since been overruled and abandoned,'upon the ground of its inconvenience, and obstruction to the free circulation and negotiation of exchange and other transferable paper.”
In the note to be found in the forly-fourth lecture of Mr. Kent, edition of 1844, are the following remarks: “In Backhouse v. Harrison, 3 Neville and Mann., 188, the case required the endorser, who lost his bill by accident, to show, in his defence, gross negligence, imputable to the holder, in order to impeach his title. The same principle was followed in Cook v. Jadis, 3 Neville and Manning, 257. 2 Mylne and Keene, 638. Goodman v. Harvey, 6 Neville and Manning, 372; so that the case of Gill v. Cubitt seems to be somewhat weakened, if not destroyed, as authority.”
In Goodman v. Harvey, 4 Adol. and Ellis, 877, Lord Denman uses the following language: “ The question I offered to submit to the jury was, whether the plaintiff had been guilty of gross negligence or not. I believe we are all of opinion, that gross negligence only would not be a sufficient answer, where the party has given consideration for the bill. Gross negligence may be evidence of mala fules, but is not the same thing. We have shaken off the last remnant of the contrary doctrine, where the bill has passed to the plaintiff without any proof of bad faith in him, there is no objection to his title. The evidence in this case, as to the notarial marks, could only weigh as rendering it less likely that the bill should have been taken in perfect good faith.” In that case, we find Sir John Campbell admitting in argument, that “ it can no longer be maintained as law, that the holder of a bill is disabled from recovering it, if he has taken it under circumstances which might reasonably have awakened suspicion,” but, he contended, that there had been gross negligence, having the effect of fraud.
In Ulher v. Rich, 10 Adol. and Ellis, 784, Lord Denman observed: “ With respect to the doctrine laid down in Gill v. Cubitt, 3 B. and C., 466, and other cases, we adhered to the more recent decisions, and to what is said in Goodman v. Harvey, 4 Adolp. and Ellis, 870, that gross negligence alone would not be a sufficient answer; that it may be evidence of mala fides, but is not the same thing. It follows, that the pleading mala fides must be distinctly alleged, and the sole question is, whether mala fides is alleged by the words, that “the plaintiff was not the bond fide holder of the bill,
*626This case certainly shows that banks, by permitting their depositors to draw checks to order, expose themselves to an increased responsibility ; but if they do not choose to take deposits on those terms, it is in their own power to remedy the inconvenience by requiring their customers to draw their checks to bearer.
I think, the judgment should be affirmed.