306 HARVARD LAW REVIEW, who paid, by mistake, overdrafts. They were disposed of as follows : — Whatever may be the distinction between such a case as Merchants* Bank v. Nat. Bank ^ (the case of an overdraft paid by mistake), and the case of Ins. Co. v, Abbott,^ it is manifest the making of a contract or the payment of money under a mistake of fact, as these words are used in the law, is not always followed by the same consequences as the making of a contract or the payment of money in consequence of the fraudulent mis- representation of a third person. This can hardly be regarded as the court's last word upon the subject. It is believed that no convincing reason can be found for discriminating, as the Massachusetts and New York courts do, against a drawee, who has been misled by the fraud of the drawer, and in favor of a drawee, who has acted imder a mistake. One who believes in Lord Mansfield's principle that, when one of two innocent persons must suffer by the misconduct of a third, the loss should lie where it has fallen, is destined to disappointment, as he reads the American cases bearing upon the right of the holder, to whom the drawee has paid a bill, which has been altered after its issue by the drawer. If a holder has in good faith pur- chased a bill, of which the amount has been raised, and the drawee has in like good faith paid it, the payment, it would seem, should have the same effect in favor of the holder, as the payment of a bill on which the drawer's name is forged, or the payment of a bill on the faith of forged bills of lading, or the payment of a bill induced by the drawer's fraud, or of one drawn without funds. Neverthe- less, the right of the drawee to recover the money paid upon an altered bill is asserted by many decisions in this country.^ One who disagrees with these decisions must turn for comfort to the English and continental law. There is, it is true, no express Eng- lish decision recognizing the holder's right to keep the money paid in such a case, but that the holder need not refimd, seems to be a fair inference from Langton v. Lazarus.* In France, Germany, ^ 139 Mass. 513. ^131 Mass. 397. ' Espy V. Bank, 18 Wall. 604; Young v. Lehman, 63 Ala. 519, 523; Redington v. Woods, 45 Cal. 406; Park v. Roser, 67 Ind. 500; Merchants' Bank v. Exchange Bank, 16 La. 457; Third Bank v. Allen, 59 Mo. 310; Bank of Commerce v. Union Bank, 3 N. Y. 230; Bank of Commerce v. Nat. Association, 55 N. Y. 211; Marine Bank v. Nat Bank, 59 N. Y. 7; White v. Continental Bank, 64 N. Y. 316; Security Bank v. Bank of Republic, 67 N. Y. 458; Nat. Bank v. Westcott, 89 N. Y. 418; Nat. Bank v. Seaboard Bank, 114 N. Y. 28 {semble); City Bank v. Nat. Bank, 45 Tex. 203.
- 5 M. & W. 629.
