
    Simon Perkins v. H. C. White.
    11. An. indorser oí a negotiable promissory note is liable to his indorsee, without demand oí payment from the maker and notice of non-payment, in cases where the maker is not liable to a bona fide indorsee before maturity, and for value.
    
      % And, to exonerate the maker from liability to such indorsee, on a note which he signed and delivered, believing at the time that the paper signed and delivered was another instrument, it is necessary to show that the maker was without fault or negligence in the premises.
    3. But in a special finding of facts by the court, a finding that such maker was unable to read or write, is not equivalent to a finding that he was free from fault or negligence.
    4. Where a bona fide indorsee of a negotiable note, after becoming such indorsee, acquires knowledge of a fraud practiced by the payee upon the maker in obtaining the note, which fraud, however, could not be made a defense by the maker against such indorsee, the subsequent indorsement of the note by him without communicating such knowledge to his indorsee, does not excuse demand and notice in order to charge the indorser.
    ■5. Under the statute prescribing the jurisdiction and procedure of justices of the peace, passed March 14, 1853 (S. & 0. 769), and sections ill and 133 thereof, as amended March 30, 1875 (73 Ohio L. 159), an appeal did not lie from a judgment of a justice of the peace (where the case was • not tried by a jury) for a less sum than one hundred dollars exclusive of costs, either under said amended sections, or original section 90 of .said act.
    Error to the District Court of Portage County. .
    ■On October 25, 1875, the plaintiff in-error brought an action ¡against Jacob Hively, W. H. Robinson and II. C. White, before a justice of the peace of Portage county, on a negotiable ^promissory note for $100.00, payable three months after date, made by Hively to Robinson and indorsed, in blank, by Robinson to White, and by White to plaintiff, before maturity, for .a valuable consideration. Service of process was made upon Hively and White, but not upon Robinson. During the pen•dency of the action before the justice, the action, as to Hively, was dismissed. White filed a bill of particulars of set-off ¡amounting .to .$115.50. On the trial, judgment was rendered in favor of the defendant for the sum of $60.00, on November 6, 1875. From this judgment plaintiff appealed to the court of common pleas. The defendant moved to dismiss the appeal for want of jurisdiction in the court of common pleas. This motion was overruled. Whereupon plaintiff filed his petition on said note against White as indorser, alleging, among other things, that said note, as to Hively, “ was a forgery and void, and for that reason demand and notice of non-payment were unnecessary,” and also alleging that demand of payment from Hively had been duly made and 'notice of non-payment duly given to White. To this petition defendant answered, admitting that he had indorsed the note to plaintiff before maturity for a valuable consideration, but denying each and ' every other allegation in the petition, save only that the note was unpaid. The defendant also pleaded the same set-off as before the justice, which, however, before trial was withdrawn without prejudice.
    On the trial in the court of common pleas, the court made the following finding of facts, to wit:
    “ And now come the said parties in person and by their attorneys, and neither party requiring a jury, submit the facts as well as the law to the court upon the pleadings, exhibits, testimony in open court and was argued by counsel; on consideration whereof the court find that said Jacob Hively, the maker of the note, could neither read or write; that in the highway near his residence on the day the note in suit was dated he entered into a contract with one W. H. Robinson, the payee of the note, by which said Hively was to act as agent for said Robinson in the sale of 50 pairs of pruning shears, and to pay said Robinson one-half the proceeds thereof, to wit: $100 after the same were sold. That one pair of shears which said Robinson had then as a sample was delivered to said Hively, and the said Robinson agreed to furnish said shears immedh ately, and the said Hively and the said Robinson then and there 'agreed that said Hively would act as such agent and then and there order said shears, and undertake to sell the same and pay for the same when sold the sum of $2 each. But in case no sale could be made by said Hively of said shears, that the same should be returned to said Robinson and none paid for except those which he could sell.
    “ The said Robinson then and there had some blanks partly printed which he then and there filled up with pen and ink which said Robinson had with him, and then and there read the same to said Hively, which contract as read embraced the terms as above set forth, and an order to ship said shears, and said Robinson asked said Hively to sign said contract, and the said Hively then and.there agreed and undertook to sign said contract and to order said shears and no other, and did sign a paper by making his mark, which he understood to be said contract, which he supposed was said contract and order for shears.
    “ The court further find that said Hively did in fact then and there sign the promissory note in question, and not any contract appointing him as agent as aforesaid. And the court further finds that said Hively did not intend to sign said-note, nor did he suppose that he was signing said note at the time he made his mark to the paper presented by said Robinson.
    “ But the court finds that said Jacob Hively did intend to obligate himself to pay to said Robinson $100 in accordance with the terms of the contract hereinafter set out, a copy of which is given in the finding of fact. The court further find that said Robinson and said Hively immediately went to the home of said Hively, where they found W. B. Hively,' a son of said Hively, and in the presence of said son said Robinson stated the contract as above set forth, and also read over the contract as given above, and asked the son to witness the signature of his father to said contract, and thereupon said son did sign as witness some paper which he understood was a contract appointing his father to sell shears as above set out, and which he supposed was said contract. But the court find that he did in fact sign his name as a witness to the note in question, but that he did not intend to witness a note. The court further find that at said time Robinson did sign and deliver to said Jacob Hively and left with him a contract of which the following is a copy:
    
      Whereas, I, W. Robinson, of Batavia, Ohio, am the owner and manufacturer of a certain pruning shear, and whereas, Jacob Hively, after having examined said shear, is desirous of obtaining an agency for the sale thereof in the township of Suffield, Portage county, Ohio: Now, therefore this indenture witnessed that for and in consideration of one-half of the proceeds of the sale of fifty pair of shears sold on trial, being the sum of one hundred dollars to me in hand secured by order, I have this day delivered to Jacob Hively one pair of said shears and appointed him my true and lawful agent to sell the above named shears in the above named territory, and in no other place or places, upon the following conditions, viz. : I, W. H. Robinson, do hereby agree with Jacob Hively that if, after using due diligence he shall fail to sell fifty pair of the above named machinery for $200 dollars within three months from date, I will take the same back at the same price or give him a longer time to sell by his giving me one-half the proceeds on what he has sold, or two dollars per pair — all shears warranted and sent to the agent when ordered by him.
    “ ‘ Dated May 14, 1874. W. H. Robinson.’
    “The court further finds that the said Robinson was a stranger traveling through the country; that no shears was ever delivered or sent by him to said Hively except said sample pair, and that Robinson' was never heard of afterward. And the court further finds that by some trick or manipulation of said Robinson unknown to the court, the said Hively did sign said note, and his son did witness the same, but they both did it without intending to sign or witness a promissory note, nor did either of them intend to deliver to said Robinson a promissory note. But the court finds that under the circumstances given above the said Hivelys did sign and deliver a paper which turned out to be a promissory note.
    “ The court further finds that the said H. C. White became the bona fide owner and holder of said note for a valuable consideration before due in the usual course of trade and without any notice of any defense thereto. After the purchase of said note by said White, and before the said White transferred tlie same to Perkins, the said White was notified by W. B. Hively that said Jacob Hively did not sign a note but had only signed a contract as above set forth.
    “ The court further finds that this conversation occurred at a time when said White called on said Jacob Hively to inform him that he had purchased his note. The court further finds that said White was then and there notified of the fact that said Hively never intended to sign a note and if one was ever given it was obtained without his knowledge or consent, and also farther notified that the note would not be paid unless the maker was compelled to pay it by law. But before the parties separated the said Hively informed said White that if the shears should come according to contract his father would pay the note.
    “ The court further finds that said Jacob Hively immediately after said supposed contract was entered into, sold a number of shears to his neighbors to be delivered by him and paid for when they should be received from Robinson.
    “ The court further finds that before the maturity of said note the said White transferred and indorsed said note to the plaintiff. That said plaintiff took the same as a bona fide purchaser from said White for a valuable consideration in the usual course of trade before due and without any knowledge of the .defense which the maker thereof had to the note.
    “ The court further finds that there was no demand of payment of said note from the maker thereof by said plaintiff on the day it fell due, nor any notice of non-payment given to said White until many weeks after the note fell due.
    
      “ The court further finds that a few days before said note fell due the said plaintiff by his agent, David Perkins, called upon said Jacob Hively to see if said note would be paid, and the said Hively then and there informed the said plaintiff’s agent that lie never gave the note, but that the same was a forgery, and further -informed the said plaintiff’s agent that said note would not be paid, and thereupon the same day the said plaintiff’s agent communicated to said White that said Hively declared that said note was a forgery and would not be paid. The court does not find that said White at any time waived demand of payment or notice of non-payment. The court further finds that said White had for a long time been acquainted with the handwriting of said W. B. ilively. They had been schoolmates together and he believed the handwriting of said W. B. Ilively to be genuine upon said note.
    “ By consent of parties and of the court the said White has leave to withdraw his counter-claim without prejudice and said counter-claim is not adjudicated upon. Whereupon it is the opinion of the court that the said plaintiff ought to recover, and it is considered by the court that the said plaintiff recover of the said defendant White the sum of $112.75 and his costs taxed at $47.55. To all of which said White excepts. Defendant White filed his motion for a new trial for the causes specified in said motion, on consideration whereof the. court overrule the motion. Defendant White excepts.”
    On proceedings in error prosecuted by the .defendant below the district court reversed the judgment- of the common pleas and remanded the cause for further proceedings. This proceeding is now prosecuted by the plaintiff to reverse the judgment of reversal.
    
      Upson <& Baird, and J. B. Ilorton, for plaintiff in error :
    I. Was the cause, under the justice act of March 14, 1853, as amended March 30, 1875, appealable ? We think it was. The trial before the justice was by the court, both parties by their bill of particulars claiming more than $100. Section 90 of the act of 1853 was not repealed by the act of 1875. Is the section applicable to this case ? The limitations upon the right of appeal created by the act of 1875 are in sections 111-123 and do not affect this action, section 111 being limited in its operation to “ cases not otherwise specially provided,” whereas this case is otherwise specially provided for by section 90. Section 123 as amended no doubt has the effect to modify section 90, but the modification only applies to cases tried by a jury. Vogel v. Haffy, 29 Ohio St. 439, would seem to be decisive upon this question.
    II. Was demand and notice necessary ? The only additional fact not expressly found by the court, necessary to bring this case as against ITively fully within the rule of De Camp v. 
      Hanna, 29 Ohio St. 467, is upon the question of negligence, and upon this point, although the court does not expressly negative negligence on the part of Hively, still it states facts which do; the maker of the note could neither read nor write, but relying entirely upon the representations of the payee, he signed what he understood to be a simple agreement to act as an agent, and if any case can arise where negligence cannot be imputed to a man this would seem to be one.
    We think in fact this note should be held as a forgery. 1 Bouv. Law Dict. 54, § 5 ; Caulkins v. Whisler, 4 Am. R. 236; 29 Iowa, 465 ; State v. Woodard, 20 Iowa, 542 ; 1 Parsons on Bills, 275. Or at least absolutely void as to the maker. Chapman v. Rose, 56 N. Y. 137; Gibbs v. Linabury, 7 Am. R. 675 (22 Mich. 469); Taylor v. Atchinson, 58 Am. R. 118 (54 Ill. 196). It was at all events not a genuine note, and of no validity against its maker.
    The only object of notice is to enable the indorser (White) to protect .himself by obtaining payment or secmity from the parties liable to him. Demand and notice is excused if the instrument is void for want of consideration, fraud or forgery. 1 Parsons on Bills, 444; Bailey on Bills, 273; 9 Mass. 1; 5 Cush. 80; 6 Gray, 90. 'If, as we claim, Jacob Hively is not liable on this note to a bona fide holder, demand and notice would be of no benefit to defendant as to any claim against the maker. Robinson, however, was no doubt liable upon his indorsement, — a liability' which, by reason of his fraudulent conduct, would hold without demand and notice. Defendant, however, being an indorser, would be entitled to notice to enable him to proceed at once against Robinson if he were in good faith and not guilty of any fraud.
    The record, however, shows that the defendant, when he transferred the note to plaintiff, had actual notice of'the fraud and want of consideration in obtaining the same, and had been “ notified that the note would not be paid unless the maker was compelled to pay it by law.” He knew the note was without consideration, that it was obtained by fraud, and would 'not be paid, and his indorsement thereof was a deliberate act of fraud; by it he made himself a party to the original fraud, and was not entitled to notice. This proposition we submit is a vital one and decisive of the case. Daniels on Neg. Instruments, 730, 1033; Edwards on Bills, § 452; Farmers’ Bank v. Van Meter, 4 Rand. 553; 2 Pars, on Notes and Bills, 554, 555, note J, 560, 648 ; Sisson v. Tomlinson, 1 Sel. N. P. 256; 2 Smith Lead. Cas. 29.
    The plaintiff took this note in good faith and for valuable consideration, from the defendant, who had full knowledge of its fraudulent character, who by its transfer deliberately perpetrated an act of fraud, and who now seeks by this defense to escape immunity from the results of that fraud. Instead of being discharged we submit that, waiving the question of indorsement, he is held and should be held responsible to plaintiff upon his fraud for the amount of the note.
    Again, the defendant, having negotiated the note, impliedly warranted its genuine character, and is liable upon this warranty to return the money received upon it even though not liable as an indorser. Ellis v. Ohio Life Ins. & Trust Co., 4 Ohio St. 651; Dumont v. Williamson, 18 Ohio St.. 515, and eases cited; 2 Pars, on Notes and Bills, 37, 39, 588, 590; Story on Prom. Notes, § 118 ; Daniels on Neg. Inst. 545.
    
      W. B. Thomas, for defendant in error :
    I. The law does not apply for an appeal of this cause.
    See sections 90, 111 and 123 of justice act, March 14, 1853, and amended sections 111 and 123, Laws of 1875, page 161.
    II. "Was the note a forgery?
    The record shows that Jacob Hively did sign this identical note at the time and as a part of his contract with Robinson; that the note when signed was filled out in every respect. It was the same as when produced upon trial. The court finds that the signature was genuine. The paper signed was the same. The contents exactly the same, and was voluntarily delivered. No counterfeit making. No alteration. No subsequent act changed the terms, or its legal effect. But they say that Hively’s signature was obtained by falsely representing the instrument signed to be one of a different nature. That is not forgery. It is procuring a genuine signature to a genuine note. 1 Daniel Neg. Inst. (2d Ed.) 327; Commonwealth v. Saw 
      key, 22 Pa. St. 390 ; 6 Mich. 496; 2 Parson N. & B. 586 ; Bishop Crim. Law, 549.
    III. "Without regard to the pleadings, or who the parties are, or what the respective findings are, does the finding show a good defense for the maker of the note, as against a Iona fide holder ? The supreme court of Ohio have examined the various decisions of different States on this question in the two cases in 29 Ohio St. 467, 473.
    Can the maker be said to be guilty of no negligence under the finding of the court ? It is conceded and determined that the intention of the maker in signing is no defense; that if fraud be practiced in obtaining the signature by falsely representing the instrument to be signed to be one of different import, will not prevent recovery, unless the maker' of the note Gim further show that he was guilty of no negligence. The bur-then is upon him to show that he was guilty of no negligence. It is his defense. 56 N. Y. 137; Winchell v. Crider, 29 Ohio St. 480.
    There is no exception to the old and just rule, that “ where one of two innocent persons must suffer by the fraud of a third person, he who trusted such third person, and placed in his hands the means which enabled him to commit the wrong, must bear the loss.” Selser v. Brock, 3 Ohio St. 302.
    This defendant was the Iona, fide owner and holder of • a promissory note of Jacob Ilively, who was competent to make a contract. The consideration was legal, and defendant’s title good. He sold it to plaintiff before due, and received no notice of dishonor of the note, and is therefore not liable in any way to anybody. See, also, 15 Ohio St. 299, and 27 Ohio St. 374.
   McIlvaine, J.

Having first considered this case upon the merits, the court is of opinion, that the judgment of reversal by the district court was right. - While it is clear, from the finding of facts by the court of common pleas, that the instrument sued on was fraudulently obtained from Ilively by Robinson, and that Hively, when he signed the same, believed, from the representations of Robinson, that he was signing an instrument other than a promissory note, and that he did not intend to sign or deliver a promissory note, it was not found, in express terms, that he was free from negligence in the premises. In order to exoúerate Iiively from liability to an innocent jrolder for value, to whom the note was indorsed before maturity, as was held in the case of De Camp v. Hamma, 29 Ohio St. 467, it was necessary to show that he was without negligence, and the burden of this showing rests upon the defense. True, the circumstances set out in the finding tend to prove that Iiively was free from carelessness, but the essential fact, to wit: freedom from negligence, was .not found, and a reviewing court is not authorized, upon such findings, to weigh the testimony for the purpose of determining probabilities. The finding that Hively could not read and write was not equivalent to a finding that he was free from carelessness in signing and delivering the instrument. And aside from his inability to read, the circumstances detailed in the findings of fact, tend, at least, to show that the exercise of ordinary prudence, on his pail,would have prevented the consummation of the fraud.

In view of the circumstances disclosed, we think, the indorsee was not excused from his duty to his indorsor to make demand of payment from Hively and give due-notice of non-payment, as he would have been, if the signature of Hively had been a forgery, or if he had not been liable to an innocent indorsee.

Nor is the contention of plaintiff in error, that White fraudulently concealed, at the time of the transfer, his knowledge of the fraud committed by Robinson upon Hively, of any avail in excuse for failing to make demand and to give notice of non-payment. It was found by the court, that White was an innocent indorsee of the note from Robinson, before maturity, and for a valuable consideration. Subsequent notice to him of Robinson’s fraud upon Hively did not affect his title or right as innocent holder, and, therefore, his indorsee, Perkins, with or without notice of such fraud, succeeded to the rights of an innocent holder, and could have enforced payment from Hively free from the defense of fraud on the part of Robinson. Perkins was not prejudiced by such concealment on the part of White. If Hively was liable on the note to an innocent holder, Perkins obtained all he bargained for, and if Hively was not so liable, White was not entitled to notice of non-payment upon duo demand, whether ho had knowledge of Robinson’s fraud at the time of the transfer by him, or not; and whether he communicated such knowledg'e to Perkins or not. The note, being free from the defense of fraud on the part of the payee, in the hands of White as innocent indorsee, could not be made subject to such defense in the hands of a subsequent holder, although such subsequent holder had knowledge of the fraud at the time he received it. The mere fact, therefore, that White had acquired knowledge of Robinson’s fraud upon Hively, after he had become an innocent owner of the note, and the further fact that he did not communicate such knowledge to Perkins when he indorsed the note to him, did not relieve Perkins from the duty of making demand and giving notice to White, if he intended to look to White for payment of the note as indorser.

Upon this view of the case, the judgment of reversal should be affirmed; but inasmuch as the district court remanded the cause to the common pleas for a new trial, it becomes necessary to inquire, whether or not the appeal from the judgment of the justice of the peace was authorized by law; and, if not, .an additional reason exists for affirming the judgment of reversal, and it also affords ground for reversing the order remanding the cause for a new trial.

The law regulating appeals from justices of the peace, at the time this was attempted, was found in act of March 30, 1875 (73 Ohio L. 159), amending sections 111 and 123 of the act of March 14, 1853, and section 90 of the last named act (S. & 0. 785). The state of the law, under these sections, has given rise to much perplexity in the minds of the profession. It has heretofore been held by this court, that under these provisions an appeal would not lie in an action for the recovery of specific personal property which proceeded to trial for damages (where the property was not delivered) before a jury whose verdict was for less than $100.00 — there being no claim in the bill of particulars for damages exceeding $100.00. Ohio & Toledo R. R. v. Bates (26 Ohio St. 32). And it has also been held in Vogel v. Haffy (29 Ohio St. 439), that an .appeal will lie in a case tried by a jury where the damages claimed exceeded §100.00, although the judgment was for less than §100.00.

In the case now before us, the trial was by the justice, and not by a jury. Section 111, as amended, provides : “ That in all cases not otherwise specially provided by law, either party' may appeal from the final judgment of any justice of the peace to the court of common pleas of the county whore the judgment was rendered, when such judgment, exclusive of costs, amounts tonot less than one hundred dollars.” And section 123, as amended, reads: “Appeals in the following cases shall not be allowed: ... 2. In jury trials, where neither party in their bill of particulars claim a sum exceeding one hundred dollars, and the judgment, exclusive of costs, is less than ono hundred dollars.” It being conceded, as it is and must be, that appeals are only allowed in cases wherein the right is given by statute, it is quite clear, that under the provisions above quoted, the appeal in the case before us was not authorized, although the amount claimed in the bill of particulars was greater than one hundred dollars; because the judgment was for less than one hundred dollars, and the case was not'tried by a jury.

It remains, therefore, only to inquire whether such appeal was authorized by section 90 of the original act, March 14, 1853.

In Vogel v. Haffy, supra, it was held that section 90 was so modified by section 123, as amended March 30, 1875, as to substitute “ one hundred dollars ” for “ twenty dollars,” so that section 90 should be read: “ If either the plaintiff or defendant in their bill of particulars claim more than one hundred dollars, the case may be appealed to the court of common pleas,• but if (neither) party demand a greater sum than one hundred dollars, and the case is tried by a jury, there shall be no appeal.”

In Vogel v. Haffy, a cause tried by a jury and the claim being more than §100.00, although the judgment less, the light of appeal was found in this section so modified.

The correctness of that decision is a matter of some doubt; but without undertaking to overrule it, we are satisfied that section 90, unrepealed by the act of 1875, but modified as above stated, did not confer the right of appeal from a judgment in a case not tried by a jury. This is quite apparent from the history of legislation on the subject of appeals from justices’ judgments.

The act of March 14,1831, defining the power and duties of justices of the peace, and constables, in civil cases, by section 40, regulated the whole subject of appeals, in these words: “Appeals shall be allowed to the court of common pleas from the final judgment of any justice of the peace, rendered under the provisions of this act, except from judgments rendered on confession.”

On February 14, 1840, the right of trial by a jury of six good and lawful men was introduced in the courts of justices of the peace. The right of appeal in cases tried by a jury was then limited by section 7 of the act of that date (38 Ohio L. 27) as follows: “ That when the amount found by the jury shall not exceed the sum of twenty dollars, exclusive of costs, there shall be no appeal from the judgment of the justice thereon, any fofmer law to the contrary notwithstanding.” By this statute no right of appeal was given, — the only provision on the subject being a limitation upon the right as given by section 40 of the act of 1831.

By the act of March 4, 1845 (43 Ohio L. 57) to amend the act of 1840, “to allow juries before justices of the peace,” it was provided : “and when in case of appeal from the judgment of any justice of the peace under the before recited act, it shall appear that the plaintiff by his bill of particulars before such justice claims more than twenty dollars, and the verdict of the jury was either in favor of the defendant, or in favor of the plaintiff for a less sum than twenty dollars, said cause shall be entered in the court of common pleas and shall be proceeded upon in all respects as other cases of appeal.” Evidently this amendment was intended to modify the limitation ‘upon the right of appeal in jury cases as declared by the act of 1840, leaving the right of appeal in cases tried by a jury, as before, to rest upon section 40 of the act of 1831 — which section alone continued to be the sole rule regulating appeals in cases not tried by a jury.

By the act of March 14, 1853 (S. & C. 769), which repealed the acts of 1831, 1840 and 1845, the entire practice before justices of the peace was revised, and the general right of appeal was re-enacted in section 111, as follows : “ In all cases not otherwise provided for by law, either party may appeal from the final judgment of any justice of the peace to the court of common pleas of the county where the judgment was rendered.” And by section 123, it was “ otherwise specially, provided -for by law ” that “ appeals in the following cases shall not be allowed: 1. On judgments rendered on confession. 2. In jury trials where neither party claim in their bill of particulars a sum exceeding twenty dollars.' 3. In the action for forcible entry and detention, or the forcible detention of real property. 4. In trials of the right of property, under the statutes, either levied upon by execution or attached.”

It would thus appear that the whole subject was provided for by sections 111 and 123 of this act. Nevertheless, in arranging and compiling this statute from former laws, among the provisions relating to trial by jury, the subject of appeal as limited by the act of 1840 as amended in 1845, was re-enacted and formed section 90, as above quoted. If, therefore, it be true that section 90 of this act can not give to the statute any operation, on the subject of appeals, that it would not have under sections 111 and 123, and if it be true, as held in Vogel v. Haffy, that the right of appeal in cases tried by a jury, where the claim was more, hut the judgment less, than one hundred dollars, was found in section 90, as modified in 1875, still, we are unable to find in it (section 90) any authority for an appeal in a like case tried by the justice and not by. a jury — and such is the case before us.

Judgment of district court reversing judgment of common pleas affirmed, and order of the district court remanding the case reversed, and said cause dismissed for want of jurisdiction in the common pleas.  