3 Roberts v. Fisher, 43 N. Y. 159 (1870). See also Baldwin v. Van Deusen, 37 N. Y. 487; Leger v. Bonnaffe, 2 Barb. 475; Lightbody v. Ontario Bank, 11 Wend. 11; 13 ib. 101.
1 Bell v. Gardiner, 4 Man. & Grang. 11. In this case, Tindal, C. J., said: "The question before the court arises upon a plea in answer to a declaration against the maker of a promissory note; in which plea the defendant alleges that the note was given under a mistake as to the facts, and, in effect, states that the defendant having indorsed a bill of exchange for the accommodation of the drawer, the bill was afterwards, without the defendant's knowledge, altered in a material point, so as to relieve him from his liability; that a demand being made upon him in respect of the bill, he gave the note in satisfaction of that demand, being ignorant at the time that he had been discharged from liability by the alteration of the bill. That is the general substance of the plea. Then the question is, whether this plea is sufficient without further alleging that the defendant, at the time he.gave the note, was also without the means of knowledge of the alteration of the bill -Whatever doubts might have been created by the dicta in Bilbie v. Lumley, 2 East, 469, and other cases, it appears to me that the late case of Kelly v.
as the settled English doctrine that money paid under a mistake of fact may be recovered back, although the party paying it may have had the means of ascertaining the error, but neglected to avail himself of it.1
§ 530. An exception to this rule obtains in cases where the party making the mistake wilfully assumes the fact, or declines examination in respect to it, after his attention has been called thereto.2 So, also, an exception would obtain, if the mistake or ignorance were in respect to a matter which the party is bound by law imperatively to know, unless fraud or imposition were directly practised upon him. Yet this last exception applies principally, if not solely, to cases where public policy requires that the party mistaken should bear the consequences of his mistake, and where the other party is not at all in fault; such as a mistake in the payment of bank-notes and negotiable paper. Thus, if a bank receive payment in counterfeit notes, purporting to be its own issue, it will be bound thereby, because, by a rule of public policy, the officers of a bank are bound absolutely to know whether notes presented to them as their own are spurious or not.1 Again, if the drawee of a bill of exchange accept a counterfeit bill, or if the maker of a promissory note, or drawer of a bill of exchange, pay a spurious note or bill, he cannot recover the money paid; because public policy
Solari, 9 M. & W. 54, is decisive upon the point, and establishes that it is not necessary to the validity of such a plea that it should negative the existence of the means of knowledge as well as actual knowledge. We can, in fact, regard the possession of the means of knowledge only as affording a strong observation to the jury to induce them to believe that the party had actual knowledge of the circumstances; but there is no conclusive rule of law that, because a party has the means of knowledge, he has the knowledge itself. There is no ground, therefore, for a rule for judgment non obstante veredicto. There may be cases where the existence of the means of knowledge might lead irresistibly to the inference that the party had actual knowledge; but I think, as the jury have found that the defendant had not knowledge, in fact, when he gave the note, that this rule must be discharged. I may add, however, that the case of the present defendant is, in my opinion, stronger in his favor than if the money had been actually paid over and was sought to be recovered back; for here the defendant stands upon the invalidity of the document which he is called upon to pay."
1 Townsend v. Crowdy, 8 C. B. (n. s.) 477 (I860). Money paid under a mistake of fact may be recovered back, although the mistake of the plaintiff arose from want of care and attention on his part. Union Nat. Bank v. Sixth Nat. Bank, 43 N. Y. 452 (1871). And see Kelly v. Solari, 9 M. & W. 54; Kingston Bank v. Eltinge, 40 N. Y. 391.
2 Kelly v. Solari, 9 M. & W. 54.
1 Gloucester Bank v. Salem Bank, 17 Mass. 33; Levy v. Bank of U. S. 4 Dall. 234; Bank of U. S. v. Bank of Georgia, 10 Wheat. 333. In this case Mr. Justice Story said: "This is a case of great importance in a practical view, and has been very fully argued upon its merits. The Bank of Georgia having originally issued the bank-notes in question, they were, in the course of circulation, fraudulently altered, and having found their way into the Bank of the United States, the latter presented them to the former, who received them as genuine, and placed them to the general account of the Bank of the United States, as cash, by way of general deposit. The forgery was not discovered until nineteen days afterwards, upon which notice was duly given, and a tender of the notes was made to the Bank of the United States, and by them refused. Both parties are equally innocent of the fraud, and it is not disputed that the Bank of the United States were holders bondjide, for a valuable consideration. Under these circumstances, the question arises, which of the parties is to bear the loss, or, in other words, whether the plaintiffs are entitled to recover, in this action, the amount of this deposit.
"Some observations have been made as to the form of the action, the declaration embracing counts for the balance of an account stated, as well as for money had and received, etc. But if the plaintiffs are entitled to recover at all, we see no objection to a recovery upon either of these counts. The sum sued for is the balance due upon the general account of the parties, and it is money had and received to the use of the plaintiffs, if the transaction entitled the plaintiffs to consider the deposit as money. It is clearly not the case of a special deposit, where the identical thing was to be restored by the defendants; the notes were paid as money upon general account, and deposited as such; so that, according to the course of business, and the understanding of the parties, the identical notes were not to be restored, but an equal amount in cash. They passed, therefore, into the general funds of the Bank of Georgia, and became the property of the bank. The action has, therefore, assumed the proper shape, and if it is maintainable upon the merits, there is no difficulty in point of form.