Varney v. Monroe Nat. Bank

On Rehearing. LAND, J. This case falls squarely within the doctrine, announced in Goetz v. Bank of Kansas City, 119 U. S. 551 , 7 Sup. Ct. 318, 30 L. Ed. 575 , that “a bank, in discounting commercial paper, does not guarantee the genuineness of a document attached to it as collateral security.” In the Goetz Case the bank not only indorsed for collection the bills of exchange, but also some of the invoices attached to the forged bills of lading. In the case at bar there was no invoice, and the bank made no indorsement on the bill of lading. The bill of exchange was drawn at sight in the usual form, and contained no reference to the bill of lading, which as a matter of fact was délivered to the bank at the same time. One of the officers of the bank wrote “25 B/C” above the name of the drawer, evidently for the purpose of showing the connection between the draft and the bill of lading. The drawee fully understood that there was no cotton connected with the bill of exchange, except that supposed to be covered by the bill of lading, and paid the draft on the faith of the forged bill of lading, and not by reason of the memorandum on the face of the- draft. The doctrine of the Goetz Case, supra, is-based on the well-settled rule of commercial law that the consideration of a bill of exchange, as between the drawer and drawee,, does not affect the rights of a bona fide indorser for value. Rehearing refused.