
    Frederick B. Dodge v. The National Exchange Bank of Columbus, Ohio.
    1. The duty oí a banker is to pay tbe checks and bills of Ms customer drawn payable to order, to the person who becomes holder by a genuine indorsement ; and he cannot charge Mm with payments made otherwise, unless the circumstances amount to a direction from the customer to the banker to pay the paper without reference to the genuineness of the indorsement, or are equivalent to a subsequent admission that the indorsement is gen nine, in reliance on wMch the banker is induced to alter his position.
    
      2. "When there is no fraud, or special understanding between the banker and his customer, the liability of the banker for paying a check upon a forged indorsement, cannot be affected by conduct of the customer in drawing the check, of which the banker had no notice.
    3. The drawer of a check payable to the order of the plaintiff, delivered it to a third person in exchange for property of the plaintiff, such third person claiming to be the plaintiff, and saying that he could identify himself at the bank. In ignorance of the circumstances under which the check was given, the bank paid the check to the bearer without inquiry, on the forged indorsement of the plaintiff’s name. Held:
    
    (1.) That the plaintiff could ratify the act of the drawer in giving the check, and by such ratification the check became his property, for the amount of which he could maintain an action against the bank.
    (2.) The fact that the drawer, with notice of the plaintiff’s claim against the bank, subsequently lifted the check and was charged with its amount in his settlement with the bank, did not affect the rights of the plaintiff.
    Error to tbe district court of Eranklin county.
    The original action was brought, in the court of common pleas, by Frederick B. Dodge against The National Exchange Bank of Columbus, Ohio, to recover of the bank $600 damages for that, without the knowledge or consent of the plaintiff, the bank had wrongfully paid to a stranger, not entitled thereto, but who, in fraud of the plaintiff’s rights, had forged the plaintiff’s name thereon, the amount of a certain check of which the plaintiff was then the legal owner, and of which the following is a copy, as set out in the petition :
    “ No. 8609. “ Columbus, O., Jcmuwi'y 22$, 1866.
    “ The National Exchange Bank and Depository of the United States, Columbus, Ohio.
    “ Pay to Frederick B. Dodge, or order, four hundred and eighty-six -^¶ dollars.
    “ William S. Stryker,
    “ $486^- Paymaster U. S. Army.”
    The pleadings in the action were the petition and answer.
    The case was tried May 30, 1866, in the common pleas on the following agreed statement of facts:
    
      
      “ Frederick B. Dodge, the plaintiff, resides at Toledo, Ohio. A few days prior to the 22d of January, 1866, being the owner of a certificate of indebtedness due to him from the United States for the sum of $186^(1;-, he indorsed the same in blank, and inclosed it in a letter which was sent by mail from Toledo to Cincinnati, O., to Dwight Bannister, paymaster U. S. A., then stationed at Cincinnati, requesting him to pay the same and return the money to him, by draft or check, by mail. This letter, with the certificate indorsed, was stolen from the mail or post-office at Cincinnati, and the certificate was presented for payment to said Bannister, at Cincinnati, by the thief, who falsely represented himself to be Frederick B. Dodge. The paymaster declined to pay the certificate to him without proof of identity, and the person holding it went out professedly to procure such proof, but did not return. On the 22d of January, 1866, the same person presented the said certificate for payment to W. S. Stryker, paymaster U. S. A., at his office in Columbus, O. The said paymaster received the said certificate and, on requiring proof of identity, was told by the said person that he could identify himself at the bank. The said paymaster thereupon, in payment of said certificate, gave to him the said check on the defendant, a copy of which is set out in the petition. He presented the said check to the defendant on the same day, representing himself to be Frederick B. Dodge, the plaintiff; indorsed the said check in that name, and received the said money, to wit, from the defendant in payment of said check. The said plaintiff had no knowledge whatever of the said person; never gave him any authority to act for him; and the entire transaction was wholly without his knowledge or consent. The said defendant had ho knowledge of the said plaintiff at the time of the payment of said check, nor of any of the foregoing facts that have transpired prior to the presentation of said check for payment, nor of the object or purpose of said Stryker in drawing said check payable to order. The said defendant, as a national bank and United States depository, had a running account with said Stryker, as paymaster, and paid the checks of said paymaster given to soldiers from all parts of the State; and tlie same party presenting the check aforesaid claimed to be a soldier. The handwriting of plaintiff differs entirely from that of the person who received payment of the check. After the payment of said check by the defendant in manner aforesaid, and before this action was commenced, the said Stryker, with knowledge of the claim of the plaintiff, settled his account with the defendant, and received and credited said check in said settlement. We agree that the above facts may be considered in the above ease as duly proven for the purpose of the first trial of this cause, subject to exceptions for competency and relevancy. And it is further agreed that either party may offer further evidence on the said trial.”
    The case was submitted upon the agreed statement of facts, and the court found for the defendant, and the plaintiff excepted, and moved for a new trial on the ground that the decision of the court was not sustained by sufficient evidence, and was contrary to law. This motion was overruled and exception taken, and judgment entered for the defendant.
    On a petition in error filed by the plaintiff in the district court this judgment was affirmed. To reverse the judgment of affirmance a petition in error is filed in this court.
    
      G. AT. Olds for plaintiff in error:
    1. As to the liability of the bank.
    A stranger presents a check for payment, payable to Dodge, or order. He claims to be Dodge, and indorsed the check as such, and the bank pays it. Now the law imposes upon the bank the responsibility of identifying the payee, and of obtaining his genuine indorsement. In this case the stranger was a thief, and his indorsement was aforgery; consequently the bank paid out the money wrongfully. The following authorities are conclusive, as to the liability of the bank. Vanbibber & Co. v. Bank of Louisiana, 14 La. An. R. 481; Graves v. The American Exchange Bank, 17 N. Y. 205; Mead v. Young, 4 Tenn. R. 28; 2 Parsons on Bills, 64, 81, 284, 584, 595, 596; Chitty on Bills, 64, 261; 1 Duer, 434; Story on Notes and Bills, p. 480, sec. 375, p. 483, sec. 379, and p. 492, sec. 385 ; 1 Hill, 287; 2 Sandford, 247; Shaffer v. MeKee, 19 Ohio St. 526; 1 Parsons on Bills, 277, 278.
    2. As to the relation of Stryker, the paymaster and drawer, to this check.
    He has acted in good faith in the issuing of the check; has issued it on a good consideration; has received full value for it; has acted with proper care and prudence; and has recognized its validity in the hands of the bank. His conduct, in all these particulars, can be sustained on careful scrutiny. The voucher, on presentation to him, had the genuine indorsement of its true owner, Dodge. This was authority to the paymaster to write over such genuine signature the proper receipt from Dodge to make the paper a good voucher for the paymaster in the settlement of his accounts. And the possession of the voucher indorsed in blank was pri/náfaoie authority to the holder of it to receive the money; and if it had been paid in money there would have been, I admit, an end of this case.
    The paymaster is transacting such business hourly with soldiers and their friends from all parts of the State. He has no means of knowing whether the party presenting a government voucher is the owner thereof, or merely acting as the agent of the owner. He, therefore, requires the party to identify himself as the owner, or he issues the check payable to the order of the owner. In this case he took the latter course. It was his duty to pay Frederick B. Dodge; he issues his check payable ,to him or his order, and, not knowing whether the party presenting himself was Dodge or not, left him to identify himself at the bank, as Dodge, or to give the check to Dodge for his indorsement, as he was the man the paymaster intended 1 j pay.
    And the very fact that the voucher was indorsed in blank vohen presented was, of itself, an intimation that the person presenting it was not Dodge, but was merely acting as his agent; and, therefore, prompted the paymaster to draw his check payable to the order of Dodge, and shows that when he delivered it to that person he intended to deliver it tc him as the agent only of the real owner.
    
      That is the effect of his check drawn to Dodge or order, and it places upon the bank the responsibility of testing the identity of the person and the genuineness of the indorsement "When the check is afterward found in the possession of the bank, he has the right to assume that they have exercised that responsibility, and to settle his accounts with them accordingly. And it makes no difference in their liability, even though they do not know the object of the drawer in making the check payable to order, for the simple fact that it is so made puts upon them the legal responsibility both of testing the identity of the person and the gewwmeness of the indorsement.
    3. As to the thief, and his relationship to the paper, it is sufficient to say, “ he has no rights which any court is bound to respect.”
    The delivery of the check to him, so far as the paymaster was concerned, was a perfect and complete delivery, for it was delivered in good faith, on a good consideration, and passed the title out of the hands of the paymaster. But it did not necessarily vest the title in the thief; he had no right to it, as against the real owner, Dodge, the payee. Is it not perfectly certain that Dodge might have maintained an action at once against him to recover the possession of the paper %
    
    4. And this brings us to consider the relationship of Dodge to the paper.
    I claim that the moment the paymaster issued this check and delivered it in return for the receipted voucher, Dodge, the payee, became the owner of the check and entitled to the immediate possession of it.
    It was not necessary that it should actually pass into his hands, and be reduced to'tangible possession. It is sufficient, if he had a right to claim and hold it.
    I refer to the following authorities: 1 Parsons on Bills, 253; 2 Parsons on Bills, 256; Howe v. Hartness et al., 11 Ohio St. 456; Graver v. American Exchange Bank, 17 N. Y. 207; Vanbibber & Co. v. Bank of Louisiana, 14 La. An. 481.
    It will not do to say that as the check was actually paid to the identical person to whom it was delivered by the drawer, the bank is released from all liability. Under the facts of the case, in the light of the authorities, a privity was estab lished between the plaintiff and the bank, and the bank assumed to pay to him, or on his genuine order, the money thus set apart by the check for his benefit.
    On the question of negligence, as between the plaintiff and defendant, I claim, both as a matter of Icm and of fact: 1st. That there was no negligence on the part of the plaintiff in sending this government voucher, indorsed in blank, to the paymaster by mail. That was not an unusual thing to be done among business men. And it is a safe as well as usual course of business. The transmission of such paper by mail, in the aggregate of such transactions over the United States, is safer than the transmission by private hands. 2d. There was actual and positive negligence on the part of the bank in paying this check without any attempt to identify the person presenting it, or of testing the genuineness of the indorsement. This bank is not a mere private agency, and the transaction is not to be construed by the limited range of liability between private individuals. It is a corporation created by public law, and a recognized depository of the United States. Its obligations to the public and to individuals, in all its business transactions, are clearly defined by rules and usages clearly established by law. The payment of this check was in direct and open violation of one of these rules and usages. It was gross negligence to make payment in the manner it was done; and payment thus made is a mere nullity, so far as the plaintiff’s rights are concerned. .
    
      Henry G. Hollé for defendant in error:
    
      We call the attention of the court to the following'propositions of fact as deduced from the agreed statement:
    1. This defendant has paid the money sued for once, on a check of the depositor, to the satisfaction of the depositor, who accepted the payment as a debt in his settlement with the bank before this suit was brought.
    2. The bank paid the check to the very person to whom the paymaster delivered it, as his own, in the name the paymaster designated him by, which payment the paymaster afterward ratified.
    3. The check was never delivered to the plaintiff, actually or constructively, nor to any one acting for the plaintiff or by him authorized to receive it.
    4. The plaintiff did not know of the existence of the check until it was paid, and never ratified the delivery to the person who got it, before bringing this action.
    5. The bank was ignorant of any claim of the plaintiff, until after the check was paid, and had no knowledge of the fraud perpetrated by the thief on the paymaster until after the payment of the check.
    
      We submit the following propositions of law:
    1. The bank is the agent (bailee) of the depositor, charged" with the duty of receiving the deposits, taking and keeping a correct account thereof, and paying out the same on the order of the depositor. It is a private agency, and, like all private agencies, the agent is not responsible to third parties for mere misfeasance or negligence in the discharge of its duties.
    2. If the bank was negligent in identifying the payee of a check, yet if the depositor was satisfied therewith, and ratified the act of the bank, no third party, whose rights had no legal or equitable existence at the time of payment, can complain of the act, either as a breach of contract or as a tort.
    3. There can be no contract rights in a check, in a third party, unless the check be delivered' to such person, actually or constructively, or to some duly appointed or authorized agent to receive the same.
    4. The cases cited for the plaintiff all show that the paper sued on was actually or constructively delivered to the plaintiffs in those eases, and, in that, essentially differ from this case.
    5. The agreed facts here show that the check in question, was never delivered to the plaintiff, actually or constructively, nor to any one by him authorized to receive it, and that,. therefore, the plaintiff was not the legal holder of the check, as averred in the petition.
    6. Such payment, in an ordinary transaction, would not have discharged the debtor, and could not, therefore, have vested any right of action in the plaintiff, on account of the check, against any one.
    
      1. If such payment bound the plaintiff in this case, as admitted by plaintiff’s counsel, it was not because the thief was the agent of the plaintiff to receive the payment, but because the plaintiff’s gross carelessness in sending his voucher by mail, indorsed in blank, would prevent his recovery of the paymaster, on the principle of contñbuti/oe negligence. If the plaintiff could not recover of the paymaster, d fortiori, he cannot of the bank, with which no privity whatever is shown.
    8. If the plaintiff could find the thief he could waive the tort, and sue him for money had and received, but not so the bank, who had a duty alone to the depositor in this matter, which it duly discharged.
    9. A person may ratify the unauthorized acts of an agent, or the act of one assuming to act as agent. But such ratification must be before the rights of third parties intervene. The rights of third parties cannot be injuriously affected by such subsequent ratification.
    The only question in this case is what relation has the plaintiff to the check ; but as counsel for plaintiff considers .other points, we do likewise.
    1. The relation of the bank to the check.
    A bank in such transaction acts “ only as the agent of the depositor or drawer (2 Parsons on Bills, 60), and is not -even bound to the check-holder unless it does some act of acceptance ” (Ib. and note j). The bank, therefore, owes its dirty in the first instance to the depositor; and if the depositor forbid the check to be paid, the bank may (must probably) refuse to pay the check (Ib.). If, on the other hand, the bank pay the check to the satisfaction or acceptance of the depositor, no third party whose rights, as against the bank, have not become absolutely vested, can sue the bauk. One to whom the check was not delivered certainly has no right of action against the bank in such case, and one to whom the check was delivered cannot have such action unless the refusal to pay was wanton and malicious (2 Parsons on Bills, 61), and not merely negligent, amounting to a malfeasance, and not simply a misfeasance, because no agent is liable to a third party for mere misfeasance or neglect in the discharge of duty. Story on Agency, sec. 308 et seq.; Henshaw v. Noble, 7 Ohio St. 226-231; Cogill v. American Exchange Bank, 1 Comstock, 113.
    The holder of the check in this case, the thief, claimed to have the name of Frederick B. Dodge. If he had such name, the check was properly made payable to him by that name. If he had not that name, but falsely assumed it, and by means thereof obtained a check of the paymaster, upon which he procured the money of the bank, we do not see how such a fraud redounds to the benefit or right of action of a third person against the bank, especially if the third person never saw the check or expressly or impliedly authorized the thief to receive it. There was, in a word, as we claim, no delmery of the check to the plaintiff; and, therefore, no claim or right of action accrued to him either in contract or tort. Morgan v. The Merchants’ Exchange Bank, 1 Duer, 434, and same case, on appeal, 1 Kernan, 404; 1 Parsons on Promissory Notes, 48; Clark v. Boyd, 2 Ohio, 56.
    2. As to the right of the drawer" of the check.
    It might be argued that if the drawer had a right of action against the bank, and the plaintiff had an equitable claim to the money, then this court would grant a recovery by the plaintiff in this case to prevent circuity of action. There are two answers to this suggestion: (1) The depositor and drawer ratified the payment by the bank before this action was commenced, by taking up the check and allowing it as a credit to the bank. (2) If the paymaster had refused so to do, it would have raised a very important question, which was raised and decided favorably to the bank in the case of Smith v. The Merchchant's Bank of New Orleans, 6 La. An. 610. It would have been a gross fraud for the paymaster to have undertaken to hold the bank responsible to know whether he had given a check to a man by his true name or not, when the bank had no knowledge even of what the paymaster was trying to do, while he had before him tire true signature of Frederick B. Dodge, the plaintiff, on the voucher, and by a mere request to the thief to sign his name in his presence could have at once detected the fraud. By not doing so he was culpably negligent, and could not have recovered of the bank. But he did not try to do so, but accepted the check as properly paid.
    We claim, therefore, that whether the bank discharged its duty faithfully or not, it cannot be called to account by the plaintiff here.
    1st. Because he never was the legal owner of the check.
    2d. Because he has no right of action, in equity, by r&ason of the bank being yet liable to pay the depositor.
    3d. Because the bank has been discharged from liability by the depositor accepting and acknowledging the payment of the check made by it.
    4th. Because a third party has no right of action against an agent for mere misfeasance or neglect.
    What liability the paymaster might be under to the plaintiff is a question not necessary now to determine, but it might be said, were it not for the gross carelessness of the plaintiff in the transaction, that the paymaster would undoubtedly be liable to the plaintiff.
    3. As to the rights of the thief to the check.
    Plaintiff’s counsel says he had no rights a court is bound to respect. We concur in this. But the thief is the source of all the plaintiff’s woes in this case, and we think the plaintiff’s remedy is against the thief alone. If the plaintiff had not been so careless he might have sued the paymaster, but his carelessness was such that I doubt whether a court would hold a third party accountable to him.
    4. What relation did the plaintiff hold to the check ? We think none whatever. The check was made, paid, and taken up without either his knowledge or privity; and as it was never delivered to him or any one for him, it could not avail him anything.
    In such case, it may be asked, may not the person entitled to the money waive all tort and ratify the unauthorized act of the thief, and thus become entitled to the benefit of his action against third persons ? This may be so, subject, however, to this important qualification, provided the rights of third parties are not affected thereby injuriously. Story on Agency, secs. 246, 247.
    If the plaintiff had ascertained the facts as to the check before it was paid, and had notified the bank of the facts, then the bank might have been bound to some duty to the plaintiff; but as the bank was entirely ignorant of every fact affecting the plaintiff, until it had paid out its money, or, rather, the money of the paymaster, it is too late for the plaintiff to ratify the act of the thief in claiming the check in controversy, and attempting to hold the bank to liability for damages to him for an unauthorized payment of his check.
   White, J.

This case is not free from difficulty, and its determination has engaged the most attentive consideration of the court.

We do not propose, however, to enter into a detailed examination of the authorities cited and relied upon by the counsel of the respective parties; but shall content ourselves mainly with stating the grounds upon which our conclusion is founded.

1. The undertaking of a banker to his customers is to pay their checks or bills according to the law-merchant. If the bill or check is payable to order, it is an authority to pay to any person who becomes holder by a genuine indorsement.

If the paper is originally payable to bearer, or if there is afterward a genuine indorsement in blank, it is an authority to pay to the person who seems to be the holder. Robarts v. Tucker, 16 Q. B. 560 (71 Eng. C. L. 559).

In this case it .was laid down that the banker cannot charge his customer with any other payments than those made in pursuance of that authority, unless (1) the circum stances amounted to a direction from the customer to the banker to pay the paper without reference to the genuineness of the indorsement; or (2) were equivalent to a subsequent admission that the indorsement was genuine, in reliance on which the banker was induced to so alter his position as to preclude the customer from showing the indorsement to be forged.

Applications of the general rule are found in the following cases:

In Graves v. The American Exchange Bank (17 N. Y. R. 205), it was held that the drawee of a bill of exchange is bound to ascertain that the person to whom he makes payment is the genuine payee or is authorized by him to receive it. And that it is no defence against such jayee that the drawee, in the regular course of business, and with nothing to excite suspicion, paid the bill to a holder in good faith and for value under the indorsement of a person bearing the same name as the payee.

Morgan v. The Bank of The State of New York (1 Kernan’s R. 404), was a suit against the bank for money deposited with it by the plaintiff. The defendant produced a check upon the bank, which it had paid, for the amount of the money, signed by the plaintiff and payable to the order of Oorless & Co., and with the name of this firm written upon it; it was proved that this was not the indorsement of the firm, and that it never owned or had any interest in the check. The court held the payment of the check to be no defence.

In Vanbbiber v. The Bank of Louisiana (14 La. An. R. 481), it was held that a bank is liable to the payee of a check made payable to his order, when the check is paid on a forged indorsement made by the collector of the payee, who received the check in payment of a bill of merchandise entrusted to him for collection by his employer.

In the opinion in this case the court say: “ The bank holds the money of its depositors, subject to be checked for, as their agent. When, then, the bank receives a check instructing them to pay a certain part of the deposit of the drawer to a third party, and the bank agrees so to do by its general custom, and by undertaking to pay it upon the sup* posed indorsement of the third party, the amount of the money represented by the check, and on deposit as that of the drawer, becomes eo instante the property of the payee, and the bank, from the moment it undertakes to pay the check, holds the amount of the cheek as the agent of the payee, and is responsible to the payee, as his agent, if it pays it upon a forged indorsement.”

In Talbot v. Bank of Rochester (1 Hill R. 295), the prin ciple was decided that the owner of negotiable paper had his election to sue the party taking and collecting it under a forged indorsement, either in trover for its conversion, or to recover its amount in an action for money had and received. See also Shaffer v. McKee, 19 Ohio St. 526.

2. Do the facts of this case bring it within either of the exceptions, before stated, to the general rule as to the liability of the bank to its customer, the drawer?

As to the first exception named, it seems to us they do not. We find nothing in the agreed statement amounting to a direction from Stryker, the drawer, to the bank, to pay the check without reference to the genuineness of the indorsement. On the contrary, the circumstances negative the idea of the existence of any such direction or authority. Stryker, the paymaster, on receiving the voucher required the person presenting it to identify himself as Frederick B. Dodge. This the person said he could do at the bank; and, thereupon, the check was given to him payable to the order of Frederick B. Dodge, with the understanding and expectation that it would be paid only in case he identified himself as the payee, or procured the indorsement of the latter.

If the person in presenting the voucher had been in fact authorized by Dodge, or had assumed to be his mere agent instead of assuming to be Dodge, himself, the check might properly have been given in the way it was. In such case, if the bank had paid the check on the forged indorsement, we dc not understand it to be claimed that such payment would have discharged the bank from liability. Yet the facts known to the bank and on which it acted in making the payment in the present case do not differ from what they would have been in the case supposed. From the agreed statement it appears that the bank paid the check on the representation of the bearer that he was the payee, and on his indorsing it with the payee’s name, without exercising any other precaution or making any further inquiry.

The ground on which the bank is claimed to be discharged from liability, is the alleged negligence of Stryker in not requiring the person to whom the check was given to identify himself as Frederick R. Dodge, the owner of the voucher. It is not claimed that any fraud was intended, or that the drawer, in the manner of giving the check, violated any arrangement or understanding between himself and the bank.

On this branch of the case wo are not unanimous. But it seems to a majority of the court that as it was competent fox the drawer to make his check payable to the order of Dodge and devolve the duty on the bank of paying only on Dodge’s genuine order, the liability of the bank cannot be affected or discharged by any act or omission of the drawer in issuing the check, of which the bank had no notice, and which in no way influenced its conduct. This principle is distinctly recognized in Robarts v. Tucker, supra.

In regard to the application of the second exception above stated, to this case, viz.: the evidence of the subsequent implied admission of Stryker that the check had been paid to the proper party, arising from his taking up the check on settlement with the bank, it is sufficient to say, that whatever might be the effect in a controversy between the bank and Stryker, it cannot impair the rights which the plaintiff was then known to assert against the bank.

'It appears, by the agreed statement, that Stryker settled with the bank with knowledge of the “ claim of the plaintiff.” We understand “the claim of the plaintiff” to rcfei to his claim against the bank, and which he, shortly afterward,, brought his suit in the court below to enforce. The bank had charged the check against the drawer, and on the settlement, received credit for the amount as so much of his deposit appropriated to its payment.

3. The remaining question is whether the plaintiff could ratify the giving of the check in his name, and thus make it his own.

We think he could, as well against the bank as against Stryker, and that by the agreed statement he is shown to have done so.

It is a maxim that a subsequent ratification has a retrospective effect, and is equivalent to a prior command.

An instance of the application of the maxim is, that if the goods of A. are wrongfully taken and sold, the owner may bring trover against the wrongdoer, or may elect to consider him as his agent — may adopt the sale and maintain an action for the price.” Broom’s Maxims, *p. 834.

So in this case, though the possession of the voucher by the person presenting it to the paymaster was tortious, the plaintiff could adopt its surrender and the receipt of the check in exchange, as the act of his agent.

The thief, if such he was, had no right to the check, either as against the plaintiff or the paymaster. As against him the plaintiff could ratify the exchange of the voucher for the check and claim the check; and such ratification would be good against the paymaster while he retained the voucher. As against the plaintiff the paymaster could not claim both check and voucher.

The effect of the ratification was to make the check the property of the plaintiff; but he did not thereby impliedly authorize the indorsement of the check. An agency to receive a check payable to order implies no authority to indorse it in the name of the principal.

The transaction with the paymaster is distinct from that with the bank. The ratification of the former excludes the idea of a ratification of the payment by the bank. The check was made payable to the order of the plaintiff for his protection and benefit; the bank paid it in its own wrong without authority from him or the drawer.

But it is said that if a ratification be allowed, as between the plaintiff and the paymaster, it ought not to affeet the bank, a third party.

The answer to this is, that the bank dealt with the trans action as it was finally ratified, and did nothing on the idea of its being unauthorized.

In the opinion of a majority of the court the judgment of the district court and of the court of common pleas must be reversed and the cause remanded for a new trial.

Brinkerhoff, C.J., and Scott and Day, .J.J., concurred.

Welch, J.,

dissenting:

I concur with the district court, in holding that Dodge had no right of action against the bank. He was no party to the check. It was not delivered to him, 1ns agent, or any one assuming to act as his agent. To talk about his “ confirming ” the agency, is to talk about his confirming nothing, for there was no agency to confirm. The whole transaction began and ended without the remotest connection with Dodge, and his rights were not in the least degree affected by it. To say that he was, in any sense, a party to the transaction, because the thief falsely personated him, by assuming his name, is to confound a person with a na/me. The delivery of the check to the thief, no matter whether drawn payable to “ order ” or to bearer, gave Dodge no rights which he had not before; nor did the delivery of the receipted voucher by the thief to the paymaster take away any of Dodge’s rights. He could have prosecuted his claim against the paymaster, or the government, equally after the receipt of the voucher and delivery of the check, as before; and the paymaster, had he discovered the fraud before payment by the bank, could have controlled the check, by countermand, cancellation, or otherwise, in spite of Dodge. The money drawn upon in the bank was still the money of the paymaster, and the voucher was still the property of Dodge. If there was any right of action against the bank, that right was in the paymaster, and not in Dodge. The paymaster, however, has settled with the bank, and credited it with the check. Possibly it would bo but fair to assume that this settlement was made under the belief that whatever right of action there might be against the bank would be in Dodge, and not in the paymaster, and that, therefore, it amounted to a transfer of the right from the paymaster to Dodge. On any theory of the case, however, Dodge could rise no higher in right than the paymaster; and I do not think the latter ever had any right of action, for the reason that he was more at fault than the bank officer. The paymaster’s money was paid upon his own check, to the person to whom that check was delivered, and to whom it was delivered with a knowledge that the person was no agent of Dodge. Why did he make the check payable to order, and not in the usual form payable to bearer % lie knew the pai'ty to be no agent. He knew that he was either Dodge himself, or a thief. If he was Dodge, it mattered not what was the form of the check. If he was a thief, Dodge would never have an opportunity to indorse his “ order ” upon the check. The only possible object, therefore, in making the check payable to order, was to jeopard the rights of the bank, without in the least protecting the rights of Dodge. Had the paymaster /mown the party to be a thief, of course he would have delivered him no check, even payable to order; and if he had done so, no one would deny but he should suffer the loss. Having a suspicion that the party was a thief, he should have settled the question of personal identity at once, and not have dodged the difficulty by casting the responsibility upon the bank officer. He should have refused the check, equally in the one form as in the other, until the party proved himself to be Dodge. With a suspicion that he might be an adroit thief, he puts into his hands an instrument by which, with a little carelessness or over confidence of the bank officer, he might defraud the bank, and that without any possible benefit to Dodge. He should, at least, have sent his clerk to the bank to notify them of his suspicion, or to inform them that this man was no agent of Dodge, but was either Dodge himself, or a thief, and that the fact of the delivery of the check to the party, as and by the name of Dodge, must not be taken by the bank as evidence that the paymaster was satisfied that he was in fact Dodge himself.

It seems to me, therefore, that neither party had any just ground of action against the bank.  