City Bank of Houston v. First National Bank

Citations

• 45 Tex. 203

Syllabus

<p>1. Raised check — Warranty—Indorsement.—The indorsement of a raised check is in effect a representation and warranty to the drawee that it is genuine, upon which he may rely, in making payment, secure in being reimbursed by the indorser after discovery of the fraud.</p> <p>2. Raised check — Mistake.—The payment of a raised check to an indorser thereof through mistake, may be recovered back by the paying bank to the extent of the difference between the original check and the amount to which it is raised, if there be no other feature in the transaction to work an estoppel. The indorsement is substantially a warranty on the part of the indorser that there is no mistake in the amount.</p> <p>3. Mistake — Negligence.—The general rule is that money paid under a mistake of fact may be recovered back, and this although the party paying may have had the means of knowledge.</p> <p>4. Same. — Mere negligence in making a mistake in the payment of money is not sufficient to preclude the party making it from demanding its correction. Such negligence does not give to the party receiving payment the right to retain what is not his due, unless he lias been misled or prejudiced by the mistake. This rule does not apply where the mistake occurs in not detecting the forged signature of a correspondent of the drawee.</p> <p>5. Negligence. — As against one who passes a raised bill or check, and especially in favor of a drawee who pays to such a party on the faith of his indorsement, and in so doing violates no obligation or duty, reasonable diligence in demanding repayment is all that can be required; and when that is exercised and no damage has resulted from the delay, the right of recovery is not lost.</p>