Goetz v. Bank of Kansas City - 119 U.S. 551 (1887)
U.S. Supreme Court
Goetz v. Bank of Kansas City, 119 U.S. 551 (1887)
Goetz v. Bank of Kansas City
Argued November 24, 29, 1886
Decided January 10, 1887
119 U.S. 551
The acceptor of a bill of exchange discounted by a bank with a bill of lading attached which the acceptor and the bank regard as genuine at the time of the acceptance, but which turns out to be a forgery, is bound to pay the bill to the bank at maturity.
The bad faith in the taker of negotiable paper which will defeat a recovery by him must be something more than a failure to inquire into the consideration upon which it was made or accepted because of rumors or general reputation as to the bad character of the maker or drawer.
In an action against the acceptor of a bill of exchange with alleged fictitious bills of lading attached, articles from newspapers touching the drawer as to other drafts with like bills attached were properly excluded as having no connection with the transaction in controversy, it not appearing that the holder ever saw them.
Evidence of declarations of an agent as to past transaction of his principal is inadmissible as mere hearsay.
In an action by a bank against the acceptor upon a draft discounted by the bank with a fraudulent bill of lading attached, the president of the bank, as a witness for it, having testified that he was ignorant of the forgeries, and also of the circumstances attending outer drafts by the drawer with forged bills of lading attached which had been discounted by the bank, and that he could only explain why pains were not taken in the matter by explaining the usage of the bank, it is competent for the court to receive such explanation of the usage.
This was an action against the plaintiff in error, the acceptor of bills of exchange with forged bills of lading attached, which had been discounted by the defendant in error and presented for acceptance without knowledge of the fraud in either party. Judgment for defendant, to review which this writ of error was sued out. The case is stated in the opinion of the Court.