300 . HARVARD LAW REVIEW. tion of the drawee's negligence, but it is evident, from the following extracts, that he based his opinion chiefly upon the principle just stated : — It is an action upon the case for money had and received to the plain- tiff's use; in which action the plaintiff cannot recover the money unless it be against conscience in the defendant to retain it. But it can never be thought unconscientious in the defendant to retain this money, when he has once received it upon a bill of exchange, indorsed to him for a fair and valuable consideration, which he had hona fide paid, without the least privity or suspicion of any forgery. ... If there was no neglect in the plaintiff, yet there is no reason to throw off the loss from one innocent man upon another innocent man.* If, indeed, the equities are not equal, — if, for instance, the holder acquired the bill, not in the course of business, but as a gift, — he ought not to be permitted to retain the money paid him by the drawee. This is not a case where one of two innocent persons must suffer a loss in any event. If the money is repaid, neither will suffer a loss. For the holder, although he refund, is not really out of pocket. By refusing to repay, he would be striving unconsci- entiously to enrich himself by a positive increase of his property at the expense of the drawee. Again, the equities might be unequal because of the holder's misconduct. He might have purchased the bill from a stranger, making no inquiries as to his identity or character. Inasmuch as such inquiries would ordinarily disclose the fraud, if any, and pre- vent its success, the holder, who thus carelessly fails to satisfy him- self as to the identity and honesty of his transferrer, may fairly be held responsible for the consequent loss, which must fall either on the drawee or himself. The general principle and this limitation are forcibly stated by Ranney, J. : — We have nowhere doubted the wisdom or policy of the rule, which allows an innocent holder to require the drawee to pass upon the signa- ture of the drawer, and makes him responsible for the decision he makes ; nor the justice of permitting the former to retain the money received upon a forgery when some one must suffer by the mistake. But we must be better informed than at present, before we shall be able to perceive the justice or propriety of permitting a holder to profit by a mistake which his
- The same principle is stated in Commercial Bank v. First Bank, 30 Md. 11, 22;
Gloucester Bank v. Salem Bank, 17 Mass. 42; Bernheimer v. Marshall, 2 Minn. 78, 83.
