298 HARVARD LAW REVIEW. of Europe.* Unfortunately, .there is not a similar unanimity as to the reason of the rule. The drawee's inability to recover the money paid is often referred to his supposed negligence. He ought, it is said, to know the signature of the drawer. Against this view two sufficient objections may be urged. In the first place, negligence on the part of the payor is not, in general, a bar to the recovery of money paid under a mistake.^ If, for instance, a creditor receives payment of a debt, which has already been paid, although he may have received the money in good faith, and the debtor may have paid in careless forgetfulness of the prior payment, it is obviously imjust for the creditor to retain the second payment, and thereby enrich himself at the expense of the debtor. Secondly, if the drawee's negligence were the test, he ought to be allowed to show, in a given case, that he was not negligent; for example, that the forgery was so skilfully executed as naturally to deceive him. But such evi- dence would not be received. "If the bank pays money on a forged check, no matter under what circumstances of caution, or however honest the behef in its genuineness, if the depositor himself be free from blame and has done nothing to mislead the bank, all the loss must be borne by the bank, for it acts at its peril." ^ Another so-called explanation of the rule, that the drawee pays a forged bill at his peril, has obtained great currency; namely, that the drawee is "conclusively presumed to know," or is "estopped to deny," the signature of the drawer. These expressions are re- peated by text-writer and judge, apparently without a suspicion of their worthlessness as an explanation of the rule in question. Yet to one asking why the drawee pays at his peril, it is no suffi- cient answer to say, that the drawee is conclusively presumed to decision to the contrary effect. But this case, though not cited, is virtually overruled by Howard v. Mississippi Bank, 28 La. An. 727. By statute, in Pennsylvania, the holder must refund to the drawee in cases like Price v. Neal. Com Bank v. Bank of Republic, 78 Pa. 233. In Goddard v. Merchants' Bank, 4 N. Y. 147, a payor for honor was allowed to recover the money paid to the holder, on the ground that he paid without first inspecting the bill. Two judges dissented, and their views were followed in Bem- heimer v. Marshall, 2 Minn. 78; Johnston v. Bank, 27 W. Va. 343 (see also Leather V. Simpson, 11 Eq. 398, 403). In Wilkinson v. Johnston, 3 B. & C. 428, a payor for honor was allowed to recover, his position being thought distinguishable from that of a drawee. Such a distinction seems ill-founded in reason, is opposed to the continental law, and was disclaimed in Goddard v. Merchants' Bank, supra. The case is, at least, of doubtful authority. Chalmers, Bills of Exch. (3 ed.) 196.
- 2 Pardessus, Cours de Droit Commercial (3 ed.), § 501 ; Wachter, Wechselrecht, 482.
2 Kelly V. Solari, 9 M. & W. 54; Appleton Bank v. McGilvray, 4 Gray, 518.
- Per Alvey, J., in Hardy v. Chesapeake Bank, 51 Md. 562, 585.
