First National Bank of Washington v. Whitman - 94 U.S. 343 (1876)
U.S. Supreme Court
First National Bank of Washington v. Whitman, 94 U.S. 343 (1876)
First National Bank of Washington v. Whitman
94 U.S. 343
1. The payee of a check before it is accepted by the drawee cannot maintain an action upon it against the latter, as there is no privity of contract between them. So held where a check of the Treasurer of the United States upon a national bank duly designated as a depositary of the public money, having been paid upon an unauthorized endorsement of the name of the payee, suit to recover the amount of the check was brought by its true owner against the bank.
2. The rights of the parties are not changed by the fact that, on a settlement of accounts between the Treasurer and the bank, the check, on the supposition that it had been properly paid, was credited to the bank. Such an error does not affect the real state of the accounts; when it is discovered, they are open to correction.
3. Payment to a stranger upon an unauthorized endorsement does not operate as an acceptance of the check, so as to authorize an action by the real owner to recover its amount as upon an accepted check.
The facts are stated in the opinion of the Court.