Hatton v. Holmes

California Supreme Court Jan 18, 1893 No. No. 19005Published

Before: Belcher

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Holding. A plaintiff who suffers a financial loss due to a bank's payment of a check on a forged indorsement has not sustained a loss recoverable from a notary public, as the bank's unauthorized payment is the primary cause of the loss.

Issues

Whether a notary public is liable for damages when a plaintiff's loss resulted from a bank paying a check on a forged indorsement.
Whether the plaintiff sustained a recoverable loss when the bank had no authority to charge the plaintiff's account for a forged check.

Disposition. affirmed

Quotations verified verbatim against the opinion

“A notary has no right, in disregard of this plain provision of the statute, to certify that he knows a person whom he does not know, on the mere introduction of some third party; and if he does so, and loss results therefrom, he renders himself and his sureties liable to make good the loss.”

“Payments made upon forged instruments are therefore at the peril of the bank, unless it can claim protection upon some principle of estoppel, or by reason of some negligence chargeable to the depositor.”

“If the above is a correct statement of the law, and we think it is, then it follows that the plaintiff had sustained no loss, and was therefore not entitled to recover.”

Synopsis

Banks and Banking— Checks—Forged Indorsement of Payee’s Name — Bights of Drawer. —A bank which pays a cheek upon the forged indorsement of the name of the payee acquires no right on it as against the drawer of the check, and has no right to charge the amount paid against the drawer’s account.

Id__Liability of Notary — False Acknowledgment of Forged Mortgage— Note for Check with Forged Indorsement. —In an action against a notary public to recover as damages a sum of money, which was alleged to have been loaned by the plaintiff upon a forged mortgage of land, which contained a false acknowledgment by the notary, where it appears that the money was paid by a hank in which the plaintiff had a deposit upon a forged indorsement of the payee’s name upon a check given by the plaintiff for the money to be loaned, no loss is shown by the plaintiff, and he is not entitled to recover as against the notary for the money so paid by the bank.

Negligence of Notary—Introduction by Third Party—Negligence of Losing Party. — A notary public has no right, in disregard of the statute, to certify that he knows a person whom he does not know, on the mere introduction of some third party, and if he does so, and loss results therefrom, he renders himself and his sureties liable to make good the loss, unless the negligence of the losing party is the proximate cause of the loss.

Belcher, C. In September, 1887, J. W. Keifer, of Kansas City, Missouri, purchased eight acres of land [209]situate in the county of Los Angeles, in this state, and had the deed made to Maria J. Keifer, his wife. In December, 1889, one O. B. Jenkins applied to the plaintiff' for a loan of money on this land. He represented, that Maria J. Keifer, of Kansas City, was the owner of the-land, and that he was her agent, and wanted to borrow the money for her. He exhibited to plaintiff a certificate showing title in Mrs. Keifer, and together they examined the property, and plaintiff agreed to loan on it one thousand dollars if the mortgage was properly drawn up and duly certified. On the second day of January, 1890, Jenkins delivered to plaintiff a note for one thousand dollars, payable to his order two years after date, with' interest at the rate of fifteen per cent per annum, payable semi-annually, and if not paid to be compounded, and a mortgage on the land to secure payment of the" note, and the plaintiff gave Jenkins his check on a bank in Los Angeles for one thousand dollars, payable to Maria J. Keifer. The mortgage described the mortgagors as “ Maria J. Keifer, of Kansas City, Jackson County, state of Missouri,‘and J. W. Keifer,” and both the note and mortgage appeared to have been signed by the two mort- - gagors. Attached to the mortgage was a certificate of acknowledgment in proper form, made by the defendant A. C. Holmes, who was a notary public in and for the county of Los Angeles, certifying that on the thirty-first. day of December, 1889, “ before me .... personally appeared Maria J. Keifer, wife of J. Keifer, known to me to be the person described in, whose name is subscribed to, and who executed, the within and annexed instrument,” etc.

Attached to the mortgage was also a certificate of acknowledgment, made by another notary public, certifying that on the second day of January, 1890, “ before me . . . . personally appeared J. W. Keifer (husband of Maria J. Keifer), known to me to be the person described in and whose name is subscribed to the annexed instrument, and he acknowledged to me that he executed the same.”

[210]Jenkins presented the check received from the plaintiff to the bank for payment. At the time of the presentation, the name “ Maria J. Keifer ” was indorsed upon the back of the check, and he then also indorsed his -,@wn name. The bank paid him the amount called for, ¿and shortly thereafter he disappeared, leaving no prop.■erty, and his whereabouts was thereafter wholly unknown.

Hatton v. Holmes

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