tiable paper. (Daniel on Neg. Instr. § 1655a; 2 Parsons on Bills & Notes, 80.) Plaintiff is entitled to recover as for money paid to the use of defendants under a mistake of fact. (Nat. Bank v. N. M. B. Assn., 55 N. Y. 211; Mayer v. Mayor, etc., 63 N. Y. 455.) Plaintiff's mistake, even if negligent, has imposed no burden upon the defendants. (Nat. Bank v. N. M. B. Assn., 55 N. Y. 211.) The fact that plaintiff's money went to pay the defendants' assessments, without any request from them, should not prevent a recovery. (Bostwick v. Beach, 103 N. Y. 414; Smith v. Robinson, 89 N. Y. 555; Obecny v. Goetz, 116 App. Div. 807; Hubbell v. Moulson, 53 N. Y. 226; Miner v. Beekman, 50 N. Y. 337; Abbott v. B. S. Line, 4 Md. Ch. 310; The Woodland, 104 U. S. 180; Hoover v. Epler, 52 Penn. St. 522; Sheldon on Subrogation [2d ed.], § 245; Ball v. Miller, 17 How. Pr. 300; Parker's Appeal, 13 Atl. Rep. 481.) Plaintiff honored and paid the forged check in good faith, in the mistaken belief that it was paying a lawful obligation. Defendants, without consideration or change of position, have benefited directly by the very money paid by plaintiff. Equity will transfer this benefit to plaintiff by means of subrogation. (Sheldon on Subrogation [2d ed.], 2, 6, 57, 265; Arnold v. Green, 116 N. Y. 566; Pease v. Egan, 131 N. Y. 262; Harris on Subrogation, 223, 225; Sidenberg v. Ely, 90 N. Y. 257; Burr v. Veeder, 3 Wend. 412; Matter of Kirkland, 14 N. B. R. 139; Matter of McBride, 19 N. B. R. 452; Thomas v. Evans, 105 N. Y. 612; Miner v. Beekman, 50 N. Y. 337; Obecny v. Goetz, 116 App. Div. 807; Graham v. Dunnigan, 15 N. Y. Super. Ct. 629; Lageman v. Kloppenburg, 2 E. D. Smith, 126.) The liability of the Ogden estate to pay the taxes does not affect plaintiff's right to recover from defendants in action No. 1. (Hathaway v. County of Delaware, 185 N. Y. 368.)

John Vernou Bouvier, Jr., John B. Doyle and Dudley Davis for respondents. There is no basis for a money judgment in this action against the defendants because they were

never personally liable for payment of the arrears of assessments. (Swarts v. Siegel, 117 Fed. Rep. 13; Matter of Johnson, L. R. [15 Ch. Div.] 548; Winslow v. Otis, 5 Gray, 360; Houston v. B. Bank, 25 Ala. 250; Matter of Hun, 144 N. Y. 147.) Plaintiff is a pure volunteer and not entitled to relief by subrogation. (Bispham on Eq. §§ 335, 336; Matthews v. Aiken, 1 N. Y. 595; Sandford v. McLean, 3 Paige, 122; Koehler v. Hughes, 148 N. Y. 507; Gadsden v. Brown, Speer Eq. 37; Hedges v. Dixon Co., 150 U. S. 191; P. S. Nat. Bank v. U. S., 164 U. S. 231; Ins. Co. v. Middle town, 124 U. S. 534; Suppinger v. Garrels, 20 Ill. App. 625 ; Norton on Bills & Notes, 418; Attorney-General v. C. Ins. Co., 71 N. Y. 325; O'Conner v. M. Bank, 124 N. Y. 331.) Subrogation to the lien of the state or city for assessments is discountenanced. (27 Am. & Eng. Ency. of Law [2d ed.], 578; McInerney v. Read, 23 Iowa, 410; Hinchman v. Morris, 29 W. Va. 673; Pray v. Field, 30 Ark. 600; M. T. Co. v. Hart, 76 Fed. Rep. 673.) The plaintiff should not be allowed to follow the payment into the equivalent benefit received by the defendants. (G. Nat. Bank v. State of New York, 171 N. Y. 379; Justh v. Nat. Bank of Commonwealth, 56 N. Y. 478; Stephens v. Board of Education of Brooklyn, 79 N. Y. 183; Southwick v. F. Nat. Bank, 84 N. Y. 420; Nat. Bank v. Bd. of Suprs., 106 N. Y. 488; Kelley v. Lindsley, 7 Gray, 287; City of Albany v. McNamara, 117 N. Y. 168; Place v. City of Yonkers, 60 N. Y. Supp. 171; N. S. Bank v. Town of Woodberry, 72 N. Y. Supp. 225; Greene v. Niagara County, 67 N. Y. Supp. 294.) To grant the plaintiff the relief demanded would be to frustrate the purpose of section 112 of the Nego tiable Instruments Law. (Nat. Park Bank v. Ninth Nut. Bank, 46 N. Y. 77; Goddard v. M. Bank, 4 N. Y. 149; Canal Bank v. Bank of Albany, 1 Hill, 287; Timbel v. G. Nat. Bank, 121 App. Div. 870; S. Nat. Bank v. Bank of America, 193 N. Y. 26; 118 App. Div. 907; Morgan v. U. S. M. & T. Co., 125 App. Div. 22; Trust Co. v. Hamilton Bank, 127 App. Div. 515.) No

N. Y. Rep.] Opinion of the Court, per WILLard Bartlett, J.

liability ever attached to the defendants in action No. 1 to pay the taxes. They are improper parties defendant in the action. (Hathaway v. County of Delaware, 185 N. Y. 369; Buckhout v. City of New York, 176 N. Y. 363; City of New York v. McLean, 170 N. Y. 374; Randell v. Lakey, 40 N. Y. 514; Matter of Babcock, 115 N. Y. 450; Coudert v. Huerstel, 60 App. Div. 83; Matter of Mansfield, 11 Misc. Rep. 296; Matter of Franklin, 26 Misc. Rep. 107; Matter of Arkenburgh, 13 Misc. Rep. 744; Matter of Doheny, 70 App. Div. 370.)

Opinion in Action No. 2:

WILLARD BARTLETT, J. The defendants had acquired by devise certain lands in the city of New York subject to a lien of $9,953.83 for assessments imposed by the city for regulating and grading an avenue. Being the owners of such lands, they agreed to sell the premises free and clear of all liens and incumbrances. Under the contract of sale, payment was made in three installments. Before the last payment, the assessments were paid, not by the defendants, by means of a check for the amount thereof drawn upon the plaintiff corporation to the order of the collector of assessments and arrears of New York city. The check purported to be signed by William O. Green, trustee, who had authority to draw checks against a deposit with the plaintiff to the credit of the estate of Andrew H. Green. The signature was a forgery but the plaintiff paid the check believing it to be genuine. There is no evidence as to the identity of the forger or that the defendants had any notice or knowledge of the payment of the assessments by means thereof until after the After ascertaining the forgery, the plaintiff restored to the credit of the estate of Andrew II. Green in its deposit account the amount of the forged check which had previously been charged against it.

event.

Upon these facts, the plaintiff brought this suit praying judgment that upon the payment of the assessments the plaintiff became subrogated to the lien of the assessments upon the

Opinion of the Court, per WILLARD BARTLETT, J. [Vol. 196.

lands subject thereto and that such lien remains in full force as between the parties to the action; that the lien attached to the moneys received by the defendants as the purchase price, which in equity represents the land; and that the plaintiff recover the amount of the assessments from the defendants.

The answer denied all the allegations of the complaint except the ownership of the lands, the contract to sell the same and the conveyance thereof under the contract. It further averred that the premises were devised to the defendants by Marianna A. Ogden of Newport, R. I., subject to the assessments which were confirmed and levied during her lifetime; that Andrew H. Green, for many years prior to his death, was her agent and personal representative in reference to the management and care of her real estate; that the said Marianna A. Ogden sent him $9,953.83 for the purpose of paying the assessment but he never paid the same; and that all these matters were known to the plaintiff corporation when it restored to the credit of the Andrew H. Green estate the amount paid out on the forged check.

The issues were referred to a referee to hear and determine. He found the facts substantially as set forth in the pleadings, except that there is no finding of the receipt of any money by Andrew H. Green from Marianna A. Ogden with which to pay the assessments. The Appellate Division, by a divided court, has affirmed the judgment in favor of the defendants which was entered upon the referee's findings.

Both the referee and the judge who wrote the prevailing opinion below thought that the case was controlled by section 112 of the Negotiable Instruments Law which provides that the acceptor of a negotiable instrument admits "the existence of a drawer, the genuineness of his signature, and his capacity and authority to draw the instrument." This enactment is merely declaratory of the common law. The leading English case in which it is enunciated is Price v. Neal (3 Burrow, 1354), decided by Lord MANSFIELD in 1762. The leading New York case to the same effect is National Park Bank v. Ninth National Bank (46 N. Y. 77). But

N. Y. Rep.] Opinion of the Court, per WILLARD BARTLETT, J.

the doctrine of these decisions, now found in the rule formulated by section 112 of the Negotiable Instruments Law, applies only in favor of one who is a holder for value of the instrument which turns out to have been forged. Thus, Lord MANSFIELD in Price v. Neal (supra) dwelt upon the fact that the bill of exchange there in question had been indorsed to the defendant "for a fair and valuable consideration which he had bona fide paid ;" and in the leading New York case (National Park Bank v. Ninth National Bank, supra) it appeared that the draft had been discounted by the Livingston National Bank and indorsed to the defendant which was a bona fide holder. The rule, therefore, that he who accepts a negotiable instrument to which the drawer's name is forged is bound by the act and can neither repudiate the acceptance nor recover the money paid, has no application in behalf of one who has acquired the paper in the absence of any consid eration whatever therefor either present or past. Such was the case here according to the finding of the referee. So far as appears, the check of the Green estate, which proved to be forged, was not given in payment of any existing or antecedent indebtedness either on the part of that estate or even of the forger. For these reasons we agree with the learned judge who wrote for the minority in the Appellate Division, saying: "Section 112 of the Negotiable Instruments Law upon which the referee based his decision has nothing to do with the question."

There being nothing in the law of commercial paper which constitutes an obstacle to a recovery by the plaintiff, it remains to consider whether the court below (all the judges concurring in this respect) were right in holding that no equitable remedy was available to the plaintiff under the doctrine of subrogation.

Upon the facts as found by the referee we have here the case of a purely gratuitous payment of assessments, constituting at the time a lien in favor of the city of New York upon lands owned by the defendants, which payment was clearly induced by the fraud and forgery of some party unknown.