The opinion
Brannon, Judge,
(concurring in result) :
I cannot agree to a part of Judge Poffenbarger's opinion. It disregards the law as laid down in 1762 by Chief Justice Mansfield in Price v. Neal, 3 Burr 1355, which, as Justice Story said in U. S. Bank v. Bank of Georgia, 10 Wheat. p. 349, has ever since been recognized in England and America as a rale of comimercial law and of property. (That rale is, that the bank on which a cheek is drawn must know the hand writing of its depositor, and if it receives a check and pays it, it cannot recover back.from a tona fide holder for value. A multitude of decisions so hold. Our own case of Johnson v. Bank, 27 W. Va. 343 , strongly recognizes this rule. It is spoken of as law in 18 Grat. page 359. See U. S. Bank v. Bank of Georgia, 10 Wheat, page 349; Levy v. Bank, 4 Dallas 234 ; Hoffman v. Bank, 12 Wall. 181 ; Commercial Bank v. First Nat. Bank, 96 Amer. Dec. 554 and note; Dedham Bank v. Everett Bank, 83 Am. St. R. 286 ; Bank v. Bank, 44 L. R. A. 131; Germania Bank v. Boutell, 27 L. R. A. 635; Neal v. Coburn, 92 Me. 139 ( 69 Am. St. R. 495 ); Hardy v. Bank, 151 Md. 585 (34 Amer. R. 325); Crocker Bank v. Nevada, 96 Amer. St. R. 169, a strong case. The negligence which the opinion in this case imputes to the McDowell Bank is that it did not require Horner to identify himself. It cannot be claimed that it was the duty of the McDowell Bank to inquire as to the signature of Young, the maker of the check, and as the court said in Germania BanJc Case, above, the Williamson Bank had no right to suppose that the McDowell Bank had inquired as to the signature of the depositor of the Williamson Bank. Now, can we assume that inquiry as to the identity of Horner would have scared the forger away and prevented his leaving the check with the McDowell Bank? Is not this assumption too far fetched ? Shall this omission relieve the Williamson Bank from the duty of knowing Young’s signature ? *563 But for its negligence of a fixed duty tbe loss would not have occurred. This exception because of negligence in, the first bank is denied in Bank v. Bank, 10 Vt. 141 , and Commercial Bank v. First Nat. Bank, supra, and Howard v. Miss. Valley Bank, 26 Am. R. 105. In the well considered case of. Salt Springs Bank v. Syracuse Bank, 62 Baxbour 101, a bank paid a forged check, “without inquiry, supposing it to be genuine”. The presenter was a stranger. The court held that this did not take from the bank the character of a bona -fide holder, and it was held not liable. As said in note, 44 L. R. A. 637, a few cases make such exception to the general rule; but the older cases, the great current, do not make It. It us called the “modern rule” in Morse on Banks, section 466. Tinder the decision in this case a bank cannot buy, cash or take for collection a check without having its payee identify himself. After writing to this point I find the case of Farmers’ & Merchants’ Bank v. Bank of Rutherford, 115 Tenn. 64 ( 112 Am. St. R. 817 ) holding, contrary to Peoples’ Bank v. Franklin Bank, 88 Tenn. 299 (17 Amer. St. R. 884) and virtually overruling it. The case in both syllabus and opinion lays down this rule of law: “A check payable to a certain person or bearer need not be endorsed, nor need the holder be identified, and a bank paying such check without identification of the holder is not negligent, though the bank, in compliance with its custom, required it to be endorsed”. A check was presented by one bank and transmitted to- the banlc on which it was drawn and paid by it and the latter bank was-refused right to recover back, although the bank taking the check made no inquiry as to the presenter. The opinion seeks to make a distinction between the ease in hand and the former case on the ground that the check was payable to a person named, or bearer; but if inquiry as to the identity of the pre-; senter was necessary, why not in either case? The case in -88 Tennessee had held that the first bank must identify the presenter, but the later case pointedly dispenses with that and condemns the prior case of Peoples’ Bank v. Franklin Bank in the following strong language: “As an original propositon. we would not assent to the correctness of Peoples’ Bank v. Franklin Bank, 88 Tenn. 299 (17 Amer. St. R. 884), *564 and we think the ..great weight of authority is against it, and that • it is contrarjr to one of the most' important rules regulating the law of negotiable instruments, to-wit, that the drawee of the check should be held to know the signature of its customers and pay only such paper as has a genuine signature”.
Still later, just'now, I come across the case of Bank v. Bank, 58 Ohio St. 207 (41 L. R. A. 584), holding that ‘/The general rule that the drawee of a check, draft or bill of exchange, is held to know the signature of the drawer, and makes payment at his own peril has not been modified in this state, except by local custom, as held in Ellis and Morton v. Ohio Life Ins. & Trust Co., 4 Ohio St. 628 .” -So-, we see that the early Ohio case so often cited against the old rule has been disapproved in the later Ohio ease and made applicable only where local custom governs it. This old Ohio case cannot be cited-to support the other doctrine. It has been repudiated in the state of its birth. No case asserts with more force the old rule of Price v. Neal than this late Ohio case, and it deprives the former case of all force to impair that rule' by saying that local custom controlled it. Moreover, it says that .bank usage now does not allow the endorsement of “For Collection”, and it is not used now, and that a general endorsement does not warrant the payee bank in assuming that all.was .right, or change its duty of care to see that the drawer’s signature is genuine. This position is sustained by Woofman v. Bank, 12 Wallace 181 ( 20 L. Ed. 366 ). The very, late work, Joyce on Defences to Commercial Papers, section 99, lays it down as settled law.
Referring again to our own case of Johnson v. Bank, 27 W. Va. 343 , I assert that a careful reading will sustain my position. Its principles govern the case now in hand. In fact, the point of the decision governs this case. A negotiable note was forged. It was taken up by a bank. When presented Johnson paid it to the bank. Later he discovered that his name had been forged. He brought suit to recover back the money from the bank, but he was denied recovery. And why?' It was under the'old rule of Price v. Neal that the maker of the note was bound to know his signature and if he neglected to do so or *565 was mistaken, he could not recover the money back. So in the case of a bank check. The bank must know the signature of its depositor. What is the difference between the two cases? I do not see how the force of that decision can be evaded as applying to this case.
In the present case the McDowell Bank did not cash the check, but refused to do so, and received it for collection and sent it to the Williamson Bank to ask whether it was genuine or not, and the Williamson Bank pronounced it good, and on receiving information that the Williamson Bank had paid it, and not till then, the McDowell bank paid the nfoney to the man who left the check with it for collection. On reading some of the cases it will be found that there is a difference between the case where the first bank pays the check at once, and that where it waits till the bank on which the check is approves it. In Espy v. Bank, 18 Wall. 604 , it is held that “where the party to whom a check is offered sends it to the bank on which it is drawn for information, the law presumes that the bank has knowledge of the drawer’s signature, and of the state of his account, and it is responsible for what may be replied on these points.” There is another consideration here. Where the first bank has already paid, the mistake of the other bank does not hurt the former, does not alter its condition for the worse, because its money is gone into the rascal’s pocket, and the second bank can recover from the first because the first bank cannot say that it was led to its loss by the negligence of the second bank. It is a rule of estoppel that -to bind one making a mista,tement another must be induced by it to alter his condition for the worse. ' Such is a controling element in the case so much relied on, Canadian Bank v. Bank of Commerce, 30 Wash. 484 (60 L. R. A. 955), as the court states in the opinion, though not in the syllabus of the official report quoted by Judge Poeeenbabger. The syllabus in L. R. A. so qualifies, and correctly states the facts entering into the decision.
The leading case of McKleroy v. Southern Bank, 14 La. Ann. 458 ( 74 Am. Dec. 438 ), points out this distinction. On the facts of our case that case would deny recovery. Likewise Daniels Nego. Inst., section 1655a, (5th Ed.), and 185 N. Y. *566 368 . Neal v. Coburn, 69 Am. St. R. 495 , denies recovery back even where no loss occurs.
In a¡ note, just found, to First Nat. Bank v. Bank of Windmere, 10 L. R. A. (N. S.) 1 ( 108 N. W. 546 ), the North Dakota court admits the rule of no recovery back as fixed by the vast current of cases, but condemns the rule, and refuses to adopt it as the law of the new state. It holds that the drawee of a forged, check may recover back from an innocent holder, “Provided the latter has not been misled or prejudiced by the drawee’s failure to detect the forgery”. This makes recovery depend on whether the first bank has been harmed. The court said that the rule of negligence is uncertain, not simple as the old rule of Price v. Neal and therefore it refused to follow Price v. Neal. There will be found a full array of authorities upon all the views of this matter. On page* 65 it will be seen that many cases say that recovery back depends on whether the defendant would suffer loss. Of course, if the holder is guilty of fraud or gross negligence actually misleading the second bank, it would be different; but as the only negligence in this case is failure to identify Horner, and the check was taken for collection in usual course of business, I do not think recovery can be had. If the McDowell Bank had cashed the check before sending it on for inquiry and payment, it could not say that it Was prejudiced by the act of the Williamson Bank in honoring the check; but that is not the case we decide. “Where a bank on which a raised draft is drawn pays it through mistake upon its presentation to it by a correspondent bank, as agent, to which it is forwarded for collection, the collecting bank cannot be compelled to repay it if it has paid over to its principal before notice of the mistake”. National Park Bank v. Seaboard Bank, 114 N. Y. 28 (11 Amer. St. R. 612). 5 Cyc. 549 says, that the presenter must refund, “provided his condition has not in the mean timle changed so as to render repayment unjust.” This distinction is found in 5 Am. & Eng. Ency. L. 1071, where we read this: “As has been stated, the bank is bound to know the signature of its depositor, and therefore if it pays out money on a cheek to which its depositor’s name has been forged, to a bona fide holder for value, it cannot recover the money so *567 paid out. This has been Die rule almost universally laid down-by the courts, the law declaring that as between parties equally innocent the loss must remain where the course of business has placed it. With singular unanimity, however, the text writers have modified this rule with the proviso, ‘unless it can be shown that the payee or endorsee, the party receiving the money, will in no way be prejudiced by the re-payment, insisting that the general rule as to money paid under mistake of fact should apply5”. The Williamson Bank’s action in sending word that the check was good was the sole cause inducing the McDowell Bank paying out the money. It caused the loss.
¡Let me concede that the McDowell Bank was negligent, for argument’s sake. Nobody will deny that the Bank of Williamson was negligent in not knowing or ascertaining the true signature of the drawer of the check. Without question the primary duty was upon it. It was more its duty to inquire than that of the McDowell Bank. This being so, we have but to apply the common doctrine of contributory negligence to defeat the recovery; for in questions of negligence he who is guilty of any negligence that is a factor in the damage can not recover.
But aside from that reason against recovery, the very nature of the action of assumpsit for mpney had and received forbids recovery. ¡Remember that the McDowell Bank did not pay the check when asked to cash it, but waited till it could sendi the check for payment to the Williamson Bank, and only when the Williamson Bank pronounced it genuine did the McDowell Bank pay it. Thus the act of the Williamson Bank misled the McDowell Bank, and now to let the Williamson Bank recover would impose a loss on the McDowell Bank for negligence of the Williamson Bank. This would be contrary to the very basis of the action of assumpsit■ for money had and received. It is governed by principles of a court of equity. The party to recover must show that he had equity and conscience on his side. “It lies only for money which, ex equo et bono the defendant ought to refund.” A definition of this action on common law principles will be found in the case cited next. But here the Williamson Bank caused the lass, and! authorities already cited prove that for that cause, in such a case as this, *568 there can be no recovery. This doctrine will be found at large in the able opinion in Crocker-Woolworth Bank v. Nevada Bank, 139 Cal. 564 ( 96 Am. St. R. 169 ).
Even though parties are equally innocent the loss falls where the parties themselves placed it is said in that ease upon, authority of Holly v. Missionary, 180 U. S. 284 . Of course, I agree with Judge PoefeNBARGer in finding the Williamson Bank negligent in failing to keep a signature of the drawer of the check for comparison; but I wholly dissent from Judge PoeeeNBArgur in saying that the failure of the McDowell Bank to investigate as to the presenter of the check and his right to it would render it liable. The McDowell Bank owed no duty to the Williamson Bank to inquire. Mere silence or non-inquiry would not make it liable. .It would take some affirmative negligence or wrong to do so; for. instance, if it knew the presenter was an imposter, or had reason to know it, or knew of circumstances arousing suspicion, and failed to inform or warn the Williamson Bank.
I cannot agree to introduce technical exceptions, dependent on uncertain oral evidence, to the rule so long applied-and shake a rule of safety in commercial paper, important to the business community. A few cases do introduce exceptions; but the great volume of cases state the rule without any such light exception as that asserted by Judge PoefeNbarger in this case. I especially decline to make the McDowell Bank liable when it would not have paid the check but for the assurance by the Williamson Bank that it was good.
Many of the eases cited by Judge PoeeeNBArger as to the negligence of failing to identify Young do not apply. Some relate to forged names of endorsers, not makers. The bank is not held to know endoirsers names. Other cases are on particular facts. Corn Ex. Bank v. Nassau Bank, was a case of forged endorsement. The case says that the drawee bank is not held to know anything but the name of the drawer, thus admitting that it is bound for that. White v. Bank, 64 N. Y. 316 , says that the drawee of a bill of exchange, “by accepting and paying only vouches for the signature of the dmw~ er not of the body of the bill,” thus admitting the ol<J rula It was a raised bill. Turnbull v. Bowyer, 40 N. Y. -, was *569 an endorsee sning a prior indorser bn a cheek when the payee’s name was forged, not the drawer’s. These cases do not involve negligence; they do not say that a bank paying a check on it can recover of the first bank because it failed to see to the identity of the payee. Negligence did not govern these cases. First Nat. Bank v. N. W. Nat. Bank, 43 Am. St. R. 247 , was a forged endorsement, not dependent on negligence. It declares that the drawee bank must know the drawer’s signature. First Nat. Bank v. Bank of Marshalltown, 44 L. R. A. 131, was a forged endorsement. The opinion expresses the opinion that one taking a check must inquire; but the case did not go upon negligence. Bank of Quincy, 71 Ill. 439 , was where a bank took a check knowing circumstances to arouse suspicion, but failed to inform the drawee bank. This was positive wrong. Bank v. Allen, 59 Mo. 310 , was where the check was genuine, but altered .in amount. Now, the bank on which the check was could not be held to know of this alteration, as it bore no mark of suspicion. It was not a case of forgery of the name of the maker. It was as much the duty of the bank cashing the check to see the alteration as it was of the second banlc. I fail to see how these cases hold the first bank liable for failure to inquire as to the identity of the presenter. They do not turn on his identity. The quotation made by Judge Poffenbarger from Germania Bank v. Boutell, 51 Am. R. 519, is 'merely an obiter opinion, because there was no question, of failure to identify, but merely stated as a proper qualification of the general rule, in the judge’s opinion.. The only point of decision in the case supports the old rule in the following syllabus, the only point in it: “A banker upon whom a forged cheek has been drawn cannot, upon discovery of the forgery, recover the amount from a bona fide holder to whom he has paid it”. Why cite a mere obiter as a decision fixing a rule? There was no question of the first bank failing to inquire. The decision denied recovery to the drawee bank. First Nat. Bank of Crawfordsville, 4 Ind. App. 355 , involved no element of failure by the first bank to identify the holder, but held it liable because the court held the endorsement “For Collection” gave credit to the cheek and misled the bank to pay. The liability was based on the' endorsement. The court *570 did not say that the first bank was liable because it failed to identify the presenter. Manifestly the case was decided wrong. Look over these cases carefully, and I venture to say that none of them involve failure to identify the payee, or hold such failure negligence creating liability, except the Massachusetts, Ohio and Tennessee cases, since disapproved.
Judge PoeeeNbaRGER seems to think that it makes no difference whether the forged name is that of the payee or maker of the check. There is a big difference. The next endorser insures the genuineness of a prior endorsees name to a later endorser and the payee bank. The payee bank is not bound to know the signature of an indorser, but is bound to know the signature of the maker of the check, because he is a depositor in the bank. When the endorser’s name is forged the bank can recover back, because that is the ■ case of mistake only, without duty to discover; it has paid money to one, not entitled to receive, on no consideration; but when it pays to a holder on a forged name of the maker of the check, it cannot recover back, because it was bound to know the maker’s signature, and having paid the first bank, and that bank having paid out the money on the faith of the payee bank’s admission tha| the name of its depositor was genuine, it cannot recover back the money.