Gray, J.
The form of the complaint is' perhaps, technically, open to a criticism that it seems to ground the action upon the drafts themselves, and, therefore, makes it one to recover plaintiff’s deposits. Such a cause of action has not accrued to the plaintiff at all, upon the facts in this record. The cause of action, which is stated to have accrued to plaintiff, -was for the refusal of the defendant to honor the plaintiff’s drafts upon it. The contract between the two banks, as implied by law, was that the amount of funds standing to the credit of the plaintiff bank on the defendant’s books should be held and paid out upon and according. to the plaintiff’s checks or order, and a failure to obey an order for their payment was a breach of the defendant’s duty and contract, for which it is legally liable, either in tort, or upon the contract. In this case the breach of contract occurred upon the refusal to pay the plaintiff’s drafts upon its funds to the order of the payees named, and a cause of action then arose in plaintiff’s favor. But this criticism upon
the form of the complaint is not serious in its results, for the pleading may he upheld and the action maintained as one simply for the breach of the defendant’s contract to pay the drafts of the plaintiff. The Code of Oivil Procedure requires that a complaint shall contain a plain and concise statement of the facts constituting the cause of action, and that requisite is met here sufficiently. The pleading, after describing the drafts . and stating the proceedings up to the protest for non-payment, alleges “that at the time said defendant so neglected and refused to pay, etc., plaintiff had sufficient money or funds on deposit with the defendant to its credit and subject to its draft or order wherewith to pay, etc., and' that by reason of the non-payment the plaintiff .lias been compelled to pay and has paid the amount, etc.” That is a plain statement of the facts from which, as a legal conclusion, the plaintiff’s legal right to recover is dedueible, and the defendant could in ho wise be misled. This seems especially true; for by its answer the defendant admits that it was indebted to the plaintiff for moneys theretofore deposited subject to its draft, check, or order, in more than a sufficient sum to pay all the drafts; and it relies, to defeat the action, upon the defense of payment only.
As to the cause of action, I think it clearly one which did accrue to and became enforceable by the plaintiff. In the first place, we must regard the paper as never having been paid by defendant to the order of the plaintiff, for the rule is well and long established that a forged indorsement does not pass a title to commercial paper, negotiable only by indorsement, and payment by the drawee, although in good faith, of a draft so affected, is no payment at all as to the true owner.
(Graves
v.
American Exchange Bank,
17 N. Y. 205.) It was the defendant’s business to see to it that its depositor’s moneys were expended according to its directions, and every expenditure was at the defendant’s risk of the direction being valid and of the indorsement conveying title to the holder being genuine.
(Corn Exchange Bank
v.
Nassau
Bank, 91 N. Y. 74, 81.)
The defendant made no attempt to disprove the plaintiff’s evidence as to the forged indorsements of the payees’ names and orders, and the forgeries must be taken as proved. Forgeries may consist, in the legal sense, of any fraudulent alterations of paper by which another may be defrauded. (Chitty on Bills 781.) So, we have no payment by the defendant of these drafts proved and the question becomes solely one upon its ob jection to the right of the plaintiff to maintain this action for non-payment by the defendant to third persons of the drafts. Its counsel says the proper remedy was to sue for the deposits. That is not so. Here the cause of action is the breach of the implied and conceded contract to pay out the plaintiff’s funds according to its drafts and order. The remedy was to sue for the breach and recover against the defendant in an amount equal to the amount of the plaintiff’s drafts, which were refused payment. That the plaintiff repaid to W.
&
Co. the moneys they had paid to it, to obtain these drafts, and, thereby, reacquired the paper is wholly immaterial, as long as the action is not upon the drafts themselves. If the plaintiff was suing upon this paper through a derivative title from W.
&
Co., it would be a very different question, indeed. But the payment back of the moneys toW.
&
Co. established the damage and its extent, to which the defendant’s act subjected the plaintiff. The acquisition thereby, and the holding and exhibition of the dishonored drafts are evidences of the facts constituting the cause of action. In recent cases this court has passed upon similar questions as to the rights of drawers of checks; to which we may in fact, liken this paper. In
Bank of British North America
v.
Mercantile Nat. Bernik
(91 N. Y. 111), the case shows the payment by the defendant bank of a check given by the plaintiff bank to II., and made payable to her order. Her indorsement was forged, and the money collected by another person. When the facts of the forgery and of the payment were discovered, the action was commenced. It is true the only defense was the statute of limitations, but Earl, J., in his opinion, which was concurred in by all the judges, said:
“
When the defendant paid the check upon the forged indorsement, it paid its
own money and discharged no part of its indebtedness to the plaintiff. * * * The .plaintiff lost none of its rights by receiving, under a mistake as to the facts, the check as one properly paid and charged to its account by the defendant.” But later, in the case of
Viets
v.
Union Nat. Bank
(101 N.
Y.
563), this rule was laid down, that
“
the refusal to pay on presentation of the check, which presentation is equivalent to a demand of payment, gives to the drawer a right of action, in case he has funds in the bank to meet the check, and the refusal to pay was without his authority.”
This doctrine, I find, has the distinct support of a decision of the King’s Bench in the case of
Xa/rzetti
v.
Williams
(1 B. & Adol. 415). That was an action by the drawer of a check against his bankers for failing to pay it to the payees named therein, on presentation. The dishonor was through some inadvertence of the bankers, and, as matter of fact, the check being presented the next day, it was then paid. Lord Tenterden held that the action was maintainable, as one founded on the banker’s implied contract with his customer, that he will pay checks drawn by him, provided he has moneys of the customer, and a breach of that contract was created when the defendants would not pay the check. Nominal damages were awarded the plaintiff in that case, though he might not have sustained a damage in fact. Justices Parke, Taunton and Patterson agreed with Lord Tenterden, holding that it was- immaterial whether the action was, in form, tort or assumpsit.
The rule is well supported in principle, as well as by the authorities, and governs this case.
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Gray, J.
The form of the complaint is' perhaps, technically, open to a criticism that it seems to ground the action upon the drafts themselves, and, therefore, makes it one to recover plaintiff’s deposits. Such a cause of action has not accrued to the plaintiff at all, upon the facts in this record. The cause of action, which is stated to have accrued to plaintiff, -was for the refusal of the defendant to honor the plaintiff’s drafts upon it. The contract between the two banks, as implied by law, was that the amount of funds standing to the credit of the plaintiff bank on the defendant’s books should be held and paid out upon and according. to the plaintiff’s checks or order, and a failure to obey an order for their payment was a breach of the defendant’s duty and contract, for which it is legally liable, either in tort, or upon the contract. In this case the breach of contract occurred upon the refusal to pay the plaintiff’s drafts upon its funds to the order of the payees named, and a cause of action then arose in plaintiff’s favor. But this criticism upon
the form of the complaint is not serious in its results, for the pleading may he upheld and the action maintained as one simply for the breach of the defendant’s contract to pay the drafts of the plaintiff. The Code of Oivil Procedure requires that a complaint shall contain a plain and concise statement of the facts constituting the cause of action, and that requisite is met here sufficiently. The pleading, after describing the drafts . and stating the proceedings up to the protest for non-payment, alleges “that at the time said defendant so neglected and refused to pay, etc., plaintiff had sufficient money or funds on deposit with the defendant to its credit and subject to its draft or order wherewith to pay, etc., and' that by reason of the non-payment the plaintiff .lias been compelled to pay and has paid the amount, etc.” That is a plain statement of the facts from which, as a legal conclusion, the plaintiff’s legal right to recover is dedueible, and the defendant could in ho wise be misled. This seems especially true; for by its answer the defendant admits that it was indebted to the plaintiff for moneys theretofore deposited subject to its draft, check, or order, in more than a sufficient sum to pay all the drafts; and it relies, to defeat the action, upon the defense of payment only.
As to the cause of action, I think it clearly one which did accrue to and became enforceable by the plaintiff. In the first place, we must regard the paper as never having been paid by defendant to the order of the plaintiff, for the rule is well and long established that a forged indorsement does not pass a title to commercial paper, negotiable only by indorsement, and payment by the drawee, although in good faith, of a draft so affected, is no payment at all as to the true owner.
(Graves
v.
American Exchange Bank,
17 N. Y. 205.) It was the defendant’s business to see to it that its depositor’s moneys were expended according to its directions, and every expenditure was at the defendant’s risk of the direction being valid and of the indorsement conveying title to the holder being genuine.
(Corn Exchange Bank
v.
Nassau
Bank, 91 N. Y. 74, 81.)
The defendant made no attempt to disprove the plaintiff’s evidence as to the forged indorsements of the payees’ names and orders, and the forgeries must be taken as proved. Forgeries may consist, in the legal sense, of any fraudulent alterations of paper by which another may be defrauded. (Chitty on Bills 781.) So, we have no payment by the defendant of these drafts proved and the question becomes solely one upon its ob jection to the right of the plaintiff to maintain this action for non-payment by the defendant to third persons of the drafts. Its counsel says the proper remedy was to sue for the deposits. That is not so. Here the cause of action is the breach of the implied and conceded contract to pay out the plaintiff’s funds according to its drafts and order. The remedy was to sue for the breach and recover against the defendant in an amount equal to the amount of the plaintiff’s drafts, which were refused payment. That the plaintiff repaid to W.
&
Co. the moneys they had paid to it, to obtain these drafts, and, thereby, reacquired the paper is wholly immaterial, as long as the action is not upon the drafts themselves. If the plaintiff was suing upon this paper through a derivative title from W.
&
Co., it would be a very different question, indeed. But the payment back of the moneys toW.
&
Co. established the damage and its extent, to which the defendant’s act subjected the plaintiff. The acquisition thereby, and the holding and exhibition of the dishonored drafts are evidences of the facts constituting the cause of action. In recent cases this court has passed upon similar questions as to the rights of drawers of checks; to which we may in fact, liken this paper. In
Bank of British North America
v.
Mercantile Nat. Bernik
(91 N. Y. 111), the case shows the payment by the defendant bank of a check given by the plaintiff bank to II., and made payable to her order. Her indorsement was forged, and the money collected by another person. When the facts of the forgery and of the payment were discovered, the action was commenced. It is true the only defense was the statute of limitations, but Earl, J., in his opinion, which was concurred in by all the judges, said:
“
When the defendant paid the check upon the forged indorsement, it paid its
own money and discharged no part of its indebtedness to the plaintiff. * * * The .plaintiff lost none of its rights by receiving, under a mistake as to the facts, the check as one properly paid and charged to its account by the defendant.” But later, in the case of
Viets
v.
Union Nat. Bank
(101 N.
Y.
563), this rule was laid down, that
“
the refusal to pay on presentation of the check, which presentation is equivalent to a demand of payment, gives to the drawer a right of action, in case he has funds in the bank to meet the check, and the refusal to pay was without his authority.”
This doctrine, I find, has the distinct support of a decision of the King’s Bench in the case of
Xa/rzetti
v.
Williams
(1 B. & Adol. 415). That was an action by the drawer of a check against his bankers for failing to pay it to the payees named therein, on presentation. The dishonor was through some inadvertence of the bankers, and, as matter of fact, the check being presented the next day, it was then paid. Lord Tenterden held that the action was maintainable, as one founded on the banker’s implied contract with his customer, that he will pay checks drawn by him, provided he has moneys of the customer, and a breach of that contract was created when the defendants would not pay the check. Nominal damages were awarded the plaintiff in that case, though he might not have sustained a damage in fact. Justices Parke, Taunton and Patterson agreed with Lord Tenterden, holding that it was- immaterial whether the action was, in form, tort or assumpsit.
The rule is well supported in principle, as well as by the authorities, and governs this case. The damage to the plaintiff here was not merely nominal, for the dishonor of its drafts, but actual, for the amount represented by them, and which the plaintiff had to make good to the payees.
There is but one other question which I think calls for further consideration, and that is as to the exclusion of certain evidence, which the defendant sought to elicit from the witness Wadsworth. By a question to that witness, who was one of the payees of the drafts, defendant endeavored, to prove
that when the plaintiff paid hack to Wadsworth & Co. the moneys for the drafts which had been dishonored, they had settled with their bookkeeper, and, for his indebtedness to them, including the appropriation by him of these drafts, had received certain property. In support of their right to make this proof they argue that if W. & Co. had made a settlement with their bookkeeper, they were not in any position to demand back the drafts which had been returned to the plaintiff by the defendant as paid, and if plaintiff redelivered the drafts to them under such a state of .facts, it acted in its own wrong and the defendant would not be liable. Without discussing the features of such a case, it is sufficient to say that there are two good reasons for the exclusion of the evidence. In the first place no such defense was set up by the answer; nor did that pleading contain any allegation which would raise any other issue than the issue of payment. In the next place, the question, if answered according to its tenor, would not elicit any proof that W.
&
Co. had been paid. It called for the witness’ testimony as to whether his firm did not charge the bookkeeper with the drafts and then take from him various kinds of property
“
as security for this entire indebtedness, consisting of the checks in part, and did they not receive that property, and did they not collect something from it, etc.” But, that they may have received some securities for his indebtedness would not establish the fact of a payment and extinguishment of any claim based on the pinchase of the drafts which were dishonored.
I think the action was rightly disposed of below and the judgment appealed from should be affirmed with costs.
All concur.
Judgment affirmed.