
    FRAUD IN SECURING A CHECK.
    Common Pleas Court of Montgomery County.
    Winters National Bank v. Jeff Roberts.
    Decided, April 7, 1909.
    
      Check — Issued to One who Assumed the Name of Another — Endorsement by the Party to Whom Delivered not a Forgery — Innocent Holders not Liable to the Drawer — Transaction not Void as to Them,
    
    Where B assumed the name of A, and procured the issuance and delivery to him of a genuine check drawn in the name of A, which he endorsed with the name of A, innocent holders of the check, including the bank upon which it was drawn and which paid it upon presentation, are not liable to the drawer on the theory that 1 he.endorsement of the name of A thereon was a forgery and the transaction involving its issuance void.
    
      Compton <& Funhhouser, for plaintiff.
    
      Fitzgerald & Sprigg, contra.
   Snediker, J.

It appears from the testimony in this case that the instrument itself, a check, is genuine and drawn by one Tolman in favor of the person who, by false and fraudulent representations, secured its issuance to him in name of ITiram Aughe. • Subsequently to its delivery to this 'person it was endorsed to the defendant Roberts for value, the • endorsement being in the name of Hiram Aughe. Roberts was an innocent holder, having no knowledge of .the circumstances and conditions under which the check was issued to the payee. Roberts after the receipt of the check presented it to the plaintiff bank for payment and received the amount.

The claim of the plaintiff is that the alleged endorsement by the payee, Hiram Aughe, was not genuine, but a forgery, and that plaintiff was thereupon compelled to repay and did repay to its depositor against whose account the check was drawn the amount of the check, and by reason of these things it asks for judgment against the defendant for said amount.

Does the fact that the person to whom the check was delivered assuming the name of another, thus falsely and fraudulently securing its issuance to him, vitiate the transaction so as to render its endorsement in such name to one acting bona fide■ a forgery and a void transaction?

Such does not seem to be the view of the Supreme Court of our own state in the ease of Forbes & King v. Espy et al, 21 O. S., 474.

Adopting and applying the language of the court in that case to the one at bar we may say that the person intended as payee by D. H. Tolman was a real person, the one actually making the application, really existing, but designated by a false or assumed name, of which last fact Tolman was ignorant. It matters not whether Tolman was induced to use that name in drawing the check through the fraud of the person making the application, or through mistake. The person so intended by such false or assumed name, subsequently by using such name, endorsed and delivered the check to an innocent purchaser, and Tolman would be estopped from denying Robert’s title or the title of the bank, his endorsee.

As has been said in effect by the Supreme Court of Nebraska in the 56th Neb., 149, the endorsement wou’d not be a forgery. It would be by the person to whom the check was in terms payable. The false representation and assumption of a false name would be'merely steps in defrauding, but the crime would not be forgery.

The person Tolman dealt with was the person intended by him as the payee of the check, designated by the name that he assumed in obtaining it, and his endorsement of it was the endorsement of the check by that name, and both Roberts and the bank having taken the check in good faith for value, Tolman could not recover his loss from either.

“.When all the parties to a transaction are innocent, and the loss must fall upon one, it should be upon the one who in law most essentially facilitated the fraud. Where one is bound to know and act upon his own knowledge, and the other has no means of knowledge, there is no reason in burdening the latter with the loss in exoneration of the former. If both are equally innocent and equally ignorant, then the loss should be made where the chances of business have placed it. ’ ’

In this case Tolman by his own acts, by his own carelessness -and failure to investigate and inform himself, made the fraud of the person obtaining this check possible upon him. He placed the check in the hands of such person, drawn to the order of Hiram Aughe, and .thus made it easy for him to endorse it, as he did, and send it into the hands of innocent holders.

There seems to us no question that so far as Tolman, the bank and Roberts are concerned, the loss, if any, should fall upon Tolman.

The foregoing will make it clear that it was not necessary for the bank to repay to Tolman the amount of the cheek upon the discovery of the fraud, and that it incurred no liability to Tolman by'paying the money to Roberts out of Tolman’s funds. Whatever the bank saw fit to do voluntarily can not in any way affect the rights of Roberts.

Our finding, therefore, in this case, is for the defendant.  