1 Bank of U. S. v. Bank of Georgia, 10 Wheat. 333; Price v. Neal, 3 Burr. 1355; Smith v. Mercer, 6 Taunt. 76.
"Against the pressure of these authorities there is not a single opposing case; and we must, therefore, conclude, that both in England and America, the question has been supposed to be at rest. The case of Jones v. Ryde, 5 Taunt. 488, is clearly distinguishable, as it ranged itself within the class of cases where forged securities of third persons had been received in payment. Bruce v. Bruce, 5 Taunt. 495, is very shortly and obscurely reported; but from what is there mentioned, as well as from the notice taken of it by Lord Chief Justice Gibbs, in Smith v. Mercer, 6 Taunt. 77, it must have turned on the same distinction as Jones v. Ryde, and was not governed by Price v. Neal.
"But if the present case is to be considered, as the defendants' counsel is most solicitous to consider it, not as a case where the notes have been paid, but as a case of credit, as cash, upon the receipt of them, it will not help the argument. In that point of view, the notes must be deemed to have been accepted by the defendants as genuine notes, and payment to have been promised accordingly. Credit was given for them, as cash, by the defendants, for nineteen days, and, during all this period, no right could exist in where the payee of the note or bill is an innocent party, and where the person making the mistake is a party to the bill, or the plaintiffs to recover the amount against any other person, from whom they were received. By such delay, according to the doctrine of Lord Chief Justice Gibbs, in Smith v. Mercer, 6 Taunt. 76, the prior holders would be discharged; and the case of the Gloucester Bank v. The Salem Bank, 17 Mass. 33, adopts the same principle; so that there would be a loss produced by the negligence of the defendants. But waiving this narrower view, we think the case may be justly placed upon the broad ground, that there was an acceptance of the notes as genuine, and that it falls directly within the authorities which govern the cases of acceptances of forged drafts. If there be any difference between them, the principle is stronger here than there; for there the acceptor is presumed to know the drawer's signature. Here, a fortiori, the maker must be presumed, and is bound to know his own notes. He cannot be heard to aver his ignorance; and when he receives notes, purporting to be his own, without objection, it is an adoption of them as his own.
"The general question as to the effect of acceptances, has repeatedly come under the consideration of the courts of common law. In the early case of Wilkinson v. Lutwidgo, 1 Str. 648, the Lord Chief Justice considered that the acceptance of the bill was, in an action against the acceptor, a sufficient proof of the handwriting of the drawer; but it was not conclusive. In the subsequent case of Jenys v. Fawler, 2 Str. 946, the Lord Chief Justice would not suffer the acceptor to give the evidence of witnesses, that they did not believe it the drawer's handwriting, from the danger to negotiable notes; and he strongly inclined to think that actual forgery would be no defence, because the acceptance had given the bill a credit to the indorsee. Subsequent to this was the case of Price v. Neal, already commented on, in which it was thought that the acceptor ought to be conclusively bound by his acceptance. The correctness of this doctrine was recognized by Mr. Justice Buller, in Smith v. Chester, 1 T. R. 655; by Lord Kenyon, in Barber v. Gingell, 3 Esp. 60, where he extended it to an implied acceptance; and by Mr. Justice Dampier, in Bass v. Clive, 4 M. & S. 15, and it was acted upon by necessary implication by the court, in Smith v. Mercer, 6 Taunt. 76. In Levy v. The Bank of the U. S., 1 Binn. 27, already referred to, where a forged check, drawn upon the bank, had been accepted by the latter, and carried to the credit of the plaintiff, and on the refusal of the bank afterwards to pay the amount, the suit was brought, the court expressly held the plaintiff entitled to recover, on the ground that the acceptance concluded the defendant. The case was very strong, for the fraud was discovered a few hours only after the receipt of the check, and immediate notice given. But this was not thought in the slightest degree to vary the legal result. 'some of the cases,' said the court, ' decide that the acceptor is bound, because the acceptance gives a credit to the bill, etc. But the modern cases certainly notice another reason for his liability, which note, or negotiable paper. And,' therefore, if a person, not being a party thereto, discount it, supposing it to be good, and it prove to be a forgery, he may recover it on the ground that it is paid under a mistake of fact, for such person is not bound to know whether the bill is a forgery or not, in like manner as if he were a party on the face of the note or bill.1 And in case a bill or note should be discounted by a third person, the money paid on it could be recovered, if it prove to be a forgery, although it be not indorsed by the person in whose behalf it was discounted.2 For the vendor of any bill of exchange impliedly warrants it to be of the kind and description it purports we think has much good sense in it, namely, that the acceptor is presumed to know the drawer's handwriting, and by his acceptance to take this knowledge upon himself.' After some research, we have not been able to find a single case, in which the general doctrine, thus asserted, has been shaken, or even doubted; and the diligence of the counsel for the defendants on the present occasion has not been more successful than our own. Considering, then, as we do, that the doctrine is well established, that the acceptor is bound to know the handwriting of the drawer, and cannot defend himself from payment by a subsequent discovery of the forgery, we are of opinion that the present case falls directly within the same principle. We think the defendants were bound to know their own notes, and having once accepted the notes in question as their own, they are concluded by their act of adoption, and cannot be permitted to set up the defence of forgery against the plaintiffs.