I agree that the judgment entered in this cause should be affirmed, but I prefer to base the affirmance on other and different grounds. It was incumbent upon the drawee-bank (plaintiff) to prove that the indorsement of Hazen Spears was a forgery. There is no record evidence that the man who presented the check to the defendant Bloomfield Bank for cashing was not "Hazen Spears." The proof shows that the presenter purporting to be "Hazen Spears" said to the cashier of the cashing bank that his name was Hazen Spears. There is no evidence that the man did not tell the truth. *Page 823 The fact that a man by the name of Hazen Speer lived in the community is not proof that the man who presented the check for cashing was not Hazen Spears. It was conceded by both parties that the signature "Hazen Spears" appearing on the reverse side of said check is not the genuine signature of Hazen Speer, nor made by the authority nor within the knowledge of Hazen Speer. There is no record evidence that would permit the inference that these two names represented one and the same person, and under these circumstances, the doctrine of idem sonans is not applicable. There is no occasion to make any pronouncement whether a right of recovery would exist if the facts upon which appellant's proposition is grounded were established by competent proof. It is sufficient to state that there was no proof that Hazen Spears's signature was a forgery. The original decision in this case, as reported in 226 N.W. 119, which gives rise to the instant petition for rehearing, was based on a hypothesis not sustained by the record, in this: that it was assumed that the indorsement of the payee, Hazen Spears, was a forgery.
A second proposition relied upon by the plaintiff-appellant is that the indorsement by the cashing bank, "Prior indorsements guaranteed," constituted a contract between the plaintiff bank and the defendant bank, amounting to a warranty that the indorsement of Hazen Spears was genuine. It is sufficient to state that an indorsement on a check is for the benefit of subsequent holders, and not for the drawee. Every indorser who indorses without qualification warrants to all subsequent holdersin due course the matter specified in Section 9526, Code, 1927, and in the preceding Section 9525. It is quite obvious that a drawee-bank who has paid a check is not a subsequent holder in due course. When the check is paid, it becomes a dead instrument. There is no longer a "holder," as defined by Section 9652, Code, 1927. It is self-evident that a person could not be a holder in due course of an instrument unless he is a holder.
A third proposition, under the allegations in the petition, relied upon by plaintiff-appellant, is that the act of the defendant bank in cashing the check without requiring the presenter to be identified was an act of negligence which was the proximate cause of the payment by the drawee in the amount of the forged check, resulting in the prayed damage to plaintiff. There is *Page 824 no merit, under the facts, in this proposition. There is no evidence that placed the cashing bank on suspicion at the time the check was presented at its counter for payment. It was done in the usual course of banking business. Full value was paid the presenter for the check. The cashing bank had no notice or knowledge of any infirmity in the instrument or defect in the title of the person negotiating it. The cashing bank did become a holder, and it became a holder in due course. We are not dealing with a liability on the part of the cashing bank to an intermediate holder by reason of the forgery of the drawer's name. Here, the defendant cashing bank was a bona-fide non-negligent holder, and the rule is that, under such conditions, the doctrine of Price v. Neal, 3 Burr. (Eng.) 1355 (1 W. Bl. 390, 97 Eng. Reprint 871), finds application. It is the controlling proposition of law in the instant case. There is no doctrine of contributory negligence involved here, and, although the trial court reached the right conclusion, the judgment entered was not predicated on the right reasons. The doctrine ofPrice v. Neal, supra, is a rule of the Law Merchant, and, under the Uniform Negotiable Instruments Law, Section 196 (Section 9657, Code, 1927), the Law Merchant governs in any case not provided for in the Negotiable Instruments Statute. The doctrine of Price v. Neal has been stated and approved by this court.First Nat. Bank v. Marshalltown State Bank (1899), 107 Iowa 327 (44 L.R.A. 131). The latest pronouncement and approval of Pricev. Neal are found in Cherokee Nat. Bank v. Union Trust Co. (1912), 33 Okla. 342 (125 P. 464), which case is quite analogous, on the facts, to the instant case. In brief, Price v.Neal has been adopted by all states in the American Union except Pennsylvania, whose legislature expressly abrogated the rule (Pennsylvania Statutes 1920, Section 16011 [Act of April 5, 1849, P.L. 426, Section 10]), and except North Dakota, which state by judicial interpretation has repudiated the doctrine. First Nat.Bank v. Bank of Wyndmere (1906), 15 N.D. 299 (108 N.W. 546, 10 L.R.A. [N.S.] 49, 125 Am. St. 588).
The plaintiff failed to establish any proposition relied upon for a reversal, and, under the record, the rule of Price v. Neal, supra, is determinative of this cause. *Page 825