McHenry v. Old Citizens National Bank

Citations

• 85 Ohio St. (N.S.) 203

Syllabus

<p>Payor gives check, covering loan, to payee — On false representations of latter — That he was one who owned certain land— On which he gives payee alleged security mortgage — Though in fact he was not the owner of said land — Payee identified at bank — As the one to whom payor gave check — Check cashed by bank — Payor cannot recover from bank — Where one of two innocent persons — Must suffer by fraud of third — He who created means of the wrong must be liable.</p> <p>1. The rule that where one of two innocent persons must suffer by the fraud of a third person, he who first trusted such third person, and placed in his hands the means which enabled him to commit the wrong, must bear the loss, applies to a case where one gives a bank check to a person to whom he has loaned money and taken to secure the same a mortgage on land represented by such person as owned by him and believed by the drawer of the check to be so owned, though in fact not owned by him, and the bank, relying upon the same means of identification of the payee of the check as was relied upon by the drawer, and with no reason to suspect the bona Mes of the transaction, pays the check to the identical person to whom the drawer intended to and did deliver it, although not to the person who in fact owned the land attempted to be mortgaged.</p> <p>2. One W. accompanied a stranger to the office of M., and introduced him as G. T., who wanted to procure a loan of money. M. had been acquainted with W. for some time, having had business transactions with him. The stranger asked to borrow three thousand dollars, and represented himself as the owner of a farm near Otsego, Ohio, on which he would give a mortgage to secure the loan. M., having examined the county records as to the title to the land, and having found it standing in the name given as that of the person so introduced, and clear of incumbrance, caused notes and a mortgage to be drawn, which being executed by the stranger under the name of G. T., were