(v) Goupy v. Harden, 7 Taunt. 159. In this case it was held, that an agent purchasing foreign Kills for his principal, and indorsing them to him without qualification, is liable to the principal on bis indorsement, however small bis commission, payment demanded; and notice of the demand and non-payment must be given to [the drawer and indorsers in order to charge them]. And this requirement is very precise as to time, and somewhat so as to form, as we shall presently see.

1 See ante p. n. 1.

It has been said that every party so indorsing a bill or note may be regarded as making a new bill or note; (w) this, though true in general, may not be precisely and exactly the rule of law; still important consequences sometimes flow from it. Thus an indorsement is said to imply that all previous parties could do validly what they did, and that the present indorser has power to make a valid indorsement. (x) And an acceptor is bound, although the name of the drawer is forged, and an indorser, although the maker's name is forged; for by acceptance and by each indorsement, a new contract is formed. (y) And the same rule would apply to a party who intervenes and accepts or pays supra protest. (z) But a distinction has been taken between a bill with the signature forged, and one of which the whole body is forged, holding that the implied admission or warranty of the acceptor does not apply in the latter case. (a) And if a prior indorsement be forged, it has been held that the second indorser cannot be charged as promisor or indorser. (aa) A drawee is bound to know the signature of his drawer, and if he pays the amount of the bill cannot recover it back;1 but this obligation does not go beyond the signature, and if the amount of the hill is increased by a forgery, he has been permitted to recover from the payee the original amount, and whatever more he paid.(ab) If an acceptor gives to a holder for value a new bill in payment of a forged one, which he had accepted, not knowing it to be forged when he gives the new bill, he is bound on the new bill. (b) So, if a bank pays a forged check, it bears the loss. (c) And a party cannot be held liable upon paper on which his name is forged, merely because he has paid, without objection, other notes forged by the same person.(d) And if a bank receive payment of an amount due to it in its own bills, which turn out to be forged, it is bound. (e)1 But, in general, payment of a debt in forged bills, both parties being innocent, is no payment, nor is a bank bound by discounting a forged note; (f) and it has been held that a depositor owes the bank no duty which requires him to examine his pass(w) Chitty & Hulme on Bills, p. 241, and cases cited. See also Pease v. Turner, 3 How. (Miss.) 375. - In Gwinnell v. Herbert, 5 A. & E. 436, it is said that the indorser of a promissory note does not stand in the situation of maker relatively to his indorsee, and the latter cannot declare against him as maker.

(x) McNeil v. Knott, 11 Ga. 142; Beal v. Alexander, 6 Tex. 531; Delaware Bank v. Jarvis, 20 N. Y. (6 Smith) 226.

(y) Wilson v. Lutwidge, 1 Stra. 648; Jenys v. Fawler, 2 Stra. 946; Price v. Neal, 3 Burr, 1354; Smith v. Chester, 1 T. R. 655, per Buller, J.; Bass v. Clive, 4 M. & Sel. 15 per Dumpier, J.; Smith v. Mercer, 6 Taunt. 76; Robinson v. Reynolds, 2 Q. B. 196; Canal Bank v. Bank of Albany, 1 Hill (N. Y.), 287; Goddard v. Merchants Bank, 4 Comst. 147; Hamilton v. Fearson, 1 Cart. (Ind.) 540. So also the acceptor undertakes that the drawer has the capacity to draw and indorse. Drayton v. Dale, 2 B. & C. 299, 3 Dow. & R. 534, per Bayley, J.; Smith v. Marsack, 6 C. B. 486; Mather v. Maidstone, 18 C. B. 273.

(z) Goddard v. Merchants Bank, 4 Comst. 147.

(a) Bank of Commerce v. Union Bank, 3 Comst. 230. But see Hall v. Fuller, 5 B. & C. 750.

(aa) Howe v. Merrill, 5 Cush. 80.

1 Hoffman v. Milwaukee Bank, 12 Wall. 181; Young v. Lehman, 63 Ala. 519, 523; First Nat. Bank v. Ricker, 71 Ill. 439, 441; First Nat. Bank v. Indiana Nat. Bank, 30 N. E. Rep. 808, (Ind.); National Bank v. Tappan, 6 Kan. 456; Hardy v. Chesapeake Bank, 51 Md. 562, 585; Manufacturers' Nat. Bank v. Swift, 70 Mo. 515, 518; National Bank v. Bangs, 106 Mass. 441, 444; First Nat. Bank of Danvers v. First Nat. Bank of Salem, 151 Mass. 280, 282; Bernheimer v. Marshall, 2 Minn. 78; Northwestern Nat. Bank v. Bank of Commerce, 107 Mo. 402; Star Fire Ins. Co. v. New Hampshire Nat. Bank, 60 N. H. 442, 446; Nat. Park Bank v. Ninth Nat. Bank, 46 N. Y. 77; Ellis v. Ohio etc. Co. 4 Ohio St. 628, 652; Levy v. U. S. Bank, 1 Binn. 36; People's Bank v.

(ab) National Park Bank v. Ninth National Bank, 55 Barb. 87; but this decision was reversed by the Court of Appeals, 46 N. Y. 77. See Clews v. Banking Assoc. 89 N. Y. 418; 105 N. Y. 398; 114 N. Y. 70; and cases cited in 4 Harv. L. Rev. 306

(b) Mather v. Maidstone, 37 E. L. & E. 335; s. c. 18 C. B. 273.

(c) Levy v. Bank of United States, 1 Binn. 27; Bank of St. Albans v. F. & M.

Bank, 10 Vt. 141; Orr v. Union Bank of Scotland, 29 E.L. & E. 1.

(d) Walters v. Harvey, 17 Md 150.

(e) United States Bank v. Bank of Georgia, 10 Wheat. 333.

(f) Stedman v. Gooch, 1 Esp. 5; Markle v. Hatfield, 2 Johns. 455; Young v. Adams, 6 Mass. 182; Eagle Bank v. Smith, 5 Conn. 71.

Franklin Bank, 88 Tenn. 299; Rouvant v. San Antonio Bank, 63 Tex. 610; Bank of St. Albans v. Farmers', etc. Bank, 10 Vt. 141; Johnston v. Commercial Hank, 27 W. Va. 343, 348, 359; Ryan v. Bank of Montreal, 12 Ont. R, 39. A contrary decision is McKleroy v. Southern Bank, 14 La. An.458, and in Pennsylvania by statute the drawee may recover. Corn Exchange Nat. Bank v. Nat. Bank of Republic, 78 Pa. 233.

But if the holder was negligent in taking the bill, as where a banker buys a draft for a large amount from a stranger without inquiry, he must repay the drawee. National Bank v. Bangs, 106 Mass. 441; First Nat. Bank v. First Nat." Bank. 151 Mass. 280; Ellis v. Ohio, etc. Co. 4 Ohio St. 628; People's Bank v. Franklin Bank, 88 Tenn. 299; Rouvant v San Antonio Bank, 63 Tex. 610. But see Howard v. Mississippi Valley Bank, 28 La. An. 727; Commercial, etc. Nat Bank v. First Nat. Bank, 30 Md. 11; Allen v. Fourth Nat. Bank, 59 N. Y 12; St. Albans Bank v. Farmers', etc Hank, 10 Vt. 141. Likewise, if the holder discovers the forgery before payment by the drawee, the latter may recover what he has paid. First Nat. Bank v. Ricker, 71 Ill. 439; National Bank v. Bangs, 106 Mass 441, 444.

1 So an individual who pays a bill or note on which his name appears as a party, cannot recover the amount paid on discovering his name to be forged if the person receiving the payment was a holder for value without notice. Mather v. Maidstone, 18 C. B. 273; Young v. Lehman, 63 Ala. 519, 523; Tyler v. Bailey, 71 Ill. 34, 37; Allen v. Sharpe, 37 Ind. 67, 73; Third Nat. Bank v. Allen, 59 Mo. 310, 315; Lewis v. White's Bank, 27 Hun, 396; Johnston v. Commercial Bank, 27 W. Va. 343; contra is Welch v. Goodwin, 123 Mass. 71.

If the drawee pays a bill on the faith of forged bills of lading attached thereto, he cannot recover the payment from one who purchased the bill and received payment in good faith. Thiedemann v. Goldschmidt, 1 DeG. F. & J. 4; Leather v. Simpson, L. R. 14 Eq. 398; Hoffman v. Bank of Milwaukee, 12 Wall. 181; Young v. Lehman, 63 Ala. 519; First Nat. Hank v. Burkham, 32 Mich. 323; Craig v. Sibbett, 15 Pa. 240; Randolph v. Merchants' Nat. Bank, 7 Baxt. 456.

Nor has the drawee who accepts a bill under similar circumstances any defence to an action on the acceptance. Robinson v. Reynolds, 2 Q. B. 196; Baxter v. Chapman, 29 L. T. Rep. 642; Goetz v. Bank of Kansas City, 119 U. S. 551.

book or vouchers, with * a view to the detection of forgeries of his name. (g) But the loser by forged paper can recover it back only by showing proper diligence in detecting the forgery and in giving notice to those who might be affected by it. (h)

It has been held that a note made by a corporation in violation of a statute, is void in the hands of an innocent holder. (i) And this has been held also, where the signature of the promisor was obtained by fraud. (j) But where one whose name was forged took security for the note, it was held to be a ratification by him. (k)1 And it is also held that mere illegality of consideration - if the note be not declared void by statute - will not affect the rights of one who holds it for value and in good faith. (l)

Whether payment of a debt in bills of an insolvent bank, both parties being ignorant of the fact, is payment, seems not to be quite settled. It must depend upon the question (which in each case may be affected by its peculiar circumstances), whether the payee takes the bills as absolute payment at his own risk, or takes them only as conditional payment, he to be bound only to use due diligence in collecting the bills, and if he fails, the payment to be null. Perhaps the weight of authority, as well as of reason, is in favor of this last view predominating where there is no sufficient evidence of a contrary intention. (m) How far a bill or note received by a creditor is considered in law as a payment of the debt, will be treated hereafter. (n)

The liability of an indorser may be considered, first as depending on the demand of payment, and then as to notice of non(g) Weisser v. Denison, 10 N. Y. 68; Manufacturers Bank v Barnes, 65 Ill. 69.

(h) Gloucester Bank v. Salem Bank, 17 Mass. 33; Canal Bank v. Bank of Albany, 1 Hill (N. Y.), 287; Pope v. Nance, 1 Minor (Ala.), 299; Schroeder v. Harvey, 75 Ill. 638.

(i) Root v. Godard, 3 McLean, 102.

(j) Dunn v. Smith, 12 Sm. & M. 602.

(k) Fitzpatrick v. S. Commissioners, 7 Humph. 224.

(l) Norris v. Langley, 19 N. H. 423; Johnson v, Meeker, 1 Wis. 436.

(m) Ellis v Wild, 6 Mass. 321; Ontario Bank v. Lightbody, 11 Wend. 9, 13 Wend. 101; Wainwright v. Webster, 11 Vt. 576; Gilman v. Peck, id. 516; Fogg v. Sawyer, 9 N. H. 365; Frontier Bank v. Morse, 22 Me. 88 Timmis v. Gibbins, 14 E. L. & E. 64, n. Contra, Lowrey v. Durrell, 2 Port. (Ala.) 280; Scruggs v. Gass, 8 Yerg 175; Bayard v. Shunk, 1 W. & S. 92. See p. *257, note 1, ante.

(n) Post, Chap. on Defences.

1 One who, knowing the signature to a promissory note to be forged, and intending to be bound by it, acknowledges it as his own, assumes the note as his own, and is bound by it just as if it had been originally signed by his authority. Wellington v. Jackson, 121 Mass. 157. But Shisler v. Vandike, 92 Penn. St. 447, declared that where a fraud is of such a character as the forged indorsement of a note, its ratification by the person whose name is forged is opposed to public policy, and cannot be permitted.- K.

payment, and the proceedings necessary thereon. But bills of exchange must also, in some instances, be presented for acceptance, * when they are made payable at a certain time after sight, in order to fix the day of their maturity. If payable in so many days after date this is not necessary. But the holder may present any bill for acceptance at any time, even the last clay before it is due; and if not accepted may sue the drawer and indorser. It is prudent and usual to present a bill for acceptance soon after it is received, as the holder thereby acquires the security of the acceptor. (o)