(129 III. 571) CHICAGO & A. R. Co. v. PEOPLE ex rel. Co-| above mentioned, which included the main LEY, Treasurer.1 (Supreme Court of Illinois. April 5, 1889.) RAILROAD COMPANIES-TAXATION. Under Rev. St. Ill. c. 120, § 109, which provides that all "railroad track" shall be assessed by the state board of equalization, a track to a quarry, constructed for the sole purpose of providing material to keep the road-bed in proper repair, cannot be assessed by the local assessor, and a tax levied upon an assessment by him is void. SHOPE and MAGRUDER, JJ., dissenting. track, and all the side tracks and rights of way above mentioned; and also stated the value of the superstructures and improvements thereon, as above described. Said company also returned a list of its real estate in said township other than that denominated "railroad track," which included the 8.9 acres of land above mentioned, less the right of way of the side track; and also a list of its personal property, as required by law. The townAppeal from county court, Pike county. ship assessor assessed the whole of the 8.9Application of the people of the state of acre tract as land, and the state board of Illinois, upon the relation of Thomas H. Co- equalization assessed that part of said tract ley, treasurer and ex officio collector of Pike used as right of way for the side or quarry The company paid county, against the Chicago & Alton Rail-track as railroad track. road Company, for judgment for delinquent the taxes assessed by the state board, but retaxes. The company filed objections to the fused to pay on the assessment made by the application. The objections were overruled, local assessor, in so far as the land occupied and judgment for taxes rendered. The com- by the side track was involved. The county collector of Pike county made application for pany appeals. judgment against the land to pay the taxes in the amount made by the local assessor, and on the hearing judgment was rendered in favor of the collector, to reverse which the railroad company appealed. A. C. Matthews and Wike & Higbee, for appellant. W. E. Williams, State's Atty., and Orr & Crawford, for appellee. CRAIG, C. J. The main track of the Chicago & Alton Railroad Company is located across the S. W. of S. E. of section 10, township 7, range 2 W., in Pike county, and the right of way over this land is 200 feet wide, the track running nearly east and west. North of the main track, and commencing a short distance west of the tract of land in question, there is a side track running east, and gradually curving to the north, known as the "Quarry Track," and some 1,471 feet in length. This side track leaves the right of way of the main track about half-way across the tract of land above mentioned. The side track has a right of way of 100 feet, or 50 feet on each side of the center of its whether the strip of land 100 feet wide, and The question presented by this record is 1,472 feet in length, extending from the main track in and to the stone-quarry, known as the "Quarry Track," is, within the meaning of the revenue law, railroad track, or is it real estate of the railroad company other than railroad track? If it is the former, then it was lawfully assessed by the state board of equalization, and the local assessor had no authority to assess it; if the latter, then it make the assessment, and the judgment of was within the power of the local assessor to the county court sustaining the assessment, and rendering judgment against the property for the tax, was right. Section 41 of the revenue act (Rev. St. Ill. c. 120) provides that railroad companies shall, in the month of May in each year, when required, make out and file, with the county clerks of the respective counties in which the railroad may acre tract, joining its right of way, upon be located, a statement or schedule showing which there is a stone-quarry. North of the the property held for right of way, and the railroad track the company erected a large length of the main and all side and second frame building, a part of which stands upon tracks and turn-outs in such county; giving the right of way of the main line, and a part the width and length of the strip of land held on the right of way of the side track, known in each tract through or into which said road as the "Quarry Track." The building con track. There is also a branch of this side track between it and the main track, known track between it and the main track, known as the "Screening Bin Track." The railroad company in March, 1882, purchased 8.9 acres of land in the north-west corner of said 40 tains two stone-crushers. The stone blasted may run, and the number of acres thereof. from the quarry on the 8.9-acre tract is car- They shall also state the value of improvefrom the quarry on the 8.9-acre tract is car-ments and stations located on the right of ried into this building on the quarry track, and crushed, and then used to ballast the road-bed of the railroad. There is also an engine and boiler house north-west of the building, located on the right of way of the side track. In May, 1887, the defendant company returned to the county clerk of Pike county a schedule, sworn to, showing, among other things, property held for the right of way, and the length of the main and all side and second tracks on the tract of land first 1Reported by Louis Boisot, Jr., of the Chicago bar. way. Section 42 provides: "Such right of way, including the superstructures of main, side, or second track and turn-outs, and the station and improvements of the railroad to be real estate for the purposes of taxation, company on such right of way, shall be held and denominated railroad track,' and shall be so listed and valued." Section 47 provides: "The county clerk shall return to the assessor of the town * * * board of equalization for assessment. In Railway Co. v. Goar, 118 Ill. 136, 8 N. E. Rep. 682, the rule announced in Railroad Co. v. People, 98 Ill, 350, was again approved, and it was held that, under the revenue law, the exclusive power to assess railroad trackwhich includes right of way, with the superstructures of main, side, or second track and turn-outs, and the station and improvements thereon-is conferred upon the state board of equalization, and therefore an assessment of the property used as railroad track by the local assessor is void. the railroad, and such real and personal prop-32 acres of land, in actual use by the railerty shall be assessed by the assessor." Sec-road company in the operation of its railroad, tion 48 provides that the railroad company was held to be railroad track, and not liable shall return to the auditor a schedule "of the to be assessed by the local assessor. This deproperty denominated railroad track,' giv-cision was followed and approved in Railroad ing the length of the main and side or second Co. v. People, 99 Ill. 466, where it was held tracks and turn-outs, and showing the pro- where a lot is returned by a railroad company portions in each county," etc. Section 109 in its list as being used for tracks, side tracks, provides that the state board of equalization etc., in connection with the road and for railshall assess the railroad property denominat-road purposes, and the board of equalization ed "railroad track" and "rolling stock," and assess the same, an assessment by the local the amount so determined and assessed shall assessor will be a double assessment, and the be certified by the auditor to the county clerk. tax extended upon such assessment will be From these provisions of the revenue law, illegal. It was also held that, where only a it is manifest that the local assessor has portion of a lot is used for railroad purposes, not been clothed with power to assess rail-to that extent it is properly returnable to the road track, and that the assessment of such property can only be made by the state board of equalization. By the terms of section 41, it is seen that the railroad company is required to return a schedule, showing the property held for right of way, the length of the main and all side and second tracks and turn-outs. This section is followed by 42, which declares that such right of way shall be held to be real estate, for the purposes of taxation, and denominated "railroad track," and shall be so listed and valued. The right of way spoken of in these two sections is not limited to the right of way of the main track, but embraces the right of way of all side tracks and turn-outs as well. In discussing this question in Railroad Co. v. People, 98 Ill. 354, we used the following language: "We can see no reason why the term right of way' should be confined to the land over which the main track of a railroad should be constructed. The land upon which a side track, a switch, or a turnout is built, and in actual use by the company in the business for which it was organized, for all practical purposes is as much held for right of way as is the land upon which the main track is constructed. * * * We are therefore of the opinion that the land held and in actual use by a railroad company for side tracks, switches, and turn-outs must be regarded, within the meaning of the revenue law, as a part of the right of way of the company." In Railway Co. v. Miller, 72 Ill. 144, town lots alleged to be used as right of way by a railroad company were held to be railroad track, and not subject to assessment by the local assessor. It is there said: "We must take the averment in the bill that these lots are used by appellant as right of way, confessed as it is by the demurrer, to be true. It then follows that, under the forty-second section, they fall under the denomination of 'railroad track,' and we perceive no authority to assess them otherwise." In Railway Co. v. Weber, 96 Ill. 448, it is held that under our statute the property of railroads, for the purpose of assessment, is classified, and specific names are adopted to designate all the property embraced in a class; that the term "railroad track" embraces property held for right of way, including superstructures thereIn Railroad Co. v. People, 98 Ill. 354, v.22N.E.no.22-55 on. Upon the hearing in the county court it appeared from the evidence that 100 feet was the necessary and proper width of the right of way for the quarry track. It also appears that the rock quarried and brought in on the track is crushed in the building provided for that purpose by the company, and used to ballast the Chicago & Alton Railroad; that the ballasting is a necessary part of the work of keeping the road in repair. The question, then, is whether a side track, as the quarry track is but a side track, when constructed by a railroad company, and used for the sole purpose of keeping the road-bed in proper repair, is to be regarded, within the meaning of the revenue law, as railroad track. Under the former decisions of this court, we think it is. If land upon which a railroad company may erect machine-shops, car-shops, roundhouses, where repairs are made for the company's rolling stock, may be regarded as railroad track, for the same reasons and upon the same principle, a quarry track, constructed for the sole purpose of providing material to keep the road-bed in proper repair, may be regarded as railroad track. This side track was necessary to enable the railroad company to properly operate its line of road under its charter. If the line is to be operated with due regard to a safe shipment of property, and the safety of the life of the passenger, the road-bed must be kept in good condition. In conclusion, we think the local assessor had no power to assess the quarry track, and the county court erred in rendering judgment for the tax arising from such assessment. The judgment of the county court will be reversed, and the cause remanded. SHOPE and MAGRUDER, JJ., dissent. (46 Ohio St. 512) so draw it. CHECKS-FICTITIOUS PAYEE. liver to him, as pretended agent of said Brown, the following check: 'Pomeroy, O., August 31, 1882. Pomeroy National Bank, 1. The rule that a negotiable instrument, made pay to William Brown or order, four hunpayable to a fictitious person or order, is, in effect, dred and fifty dollars, ($450.) [Signed] K. an instrument payable to bearer, applies only S. D. ARMSTRONG.' (4) That there was no where it is so made with the knowledge of the such person as the above-named William party making it, and does not apply where the maker, supposing the payee to be a real person, Brown; that plaintiff supposed (at the time) and intending payment to be made to such person there was, and believed she delivered the or his order, is induced by the fraud of another to check to said Brown, through his agent, said 2. Where, by the fraud of a third person, a de- Grimes. (5) That she was not careless or positor of a bank is induced to draw his check pay- negligent respecting the transaction, but, inable to a non-existing person or order, the drawer stead, was ordinarily careful and prudent in being in ignorance of the fact and intending no fraud, the bank on which the check is so drawn is respect thereof. (6) That said Grimes on not authorized to pay it, and charge the amount to the same day (August 31, 1882,) wrote the the account of its customer, on the indorsement of name WILLIAM BROWN' across the back of the party presenting it, although it appears to said check, and presented it to defendant for have been previously indorsed by the party named as payee. Such indorsement is, in effect, a for- payment; that defendant, having no knowlgery, and the payment thereon by the bank con-edge respecting the way Grimes had obtained fers no right on it as against the drawer of the it, or that the name WILLIAM BROWN' was check. the name of a fictitious person, paid the same, and charged the amount thereof against the account of the plaintiff. (7) That defendant in paying the check to Grimes made the usual inquiries respecting his identity, and in other respects was ordinarily careful and prudent in relation to the transaction. (8) That plaintiff before the commencement of this action demanded of defendant the payment of said sum by it paid to said Grimes, which defendant then refused, and has not, either before or since said demand, paid the same, or any part thereof. 3. In the absence of a course of dealing or understanding to the contrary between the parties, the duty of a banker is, in all cases, to pay to the person named, or his order, where the terms of the check are such; and he may and should withhold payment until fully satisfied as to the genuineness of the indorsement. (Syllabus by the Court.) Error to circuit court, Meigs county. MINSHALL, C. J. The original action was a suit by Kate S. D. Armstrong against the Pomeroy National Bank, to recover of the bank the sum of $450, due her upon a deposit she had made with the bank. She averred that she had given a check, payable to one William Brown or order, that had been procured from her by the fraudulent practices of one Grimes, who represented himself as acting for the said Brown in the negotiation of a note; that there was no such person as Brown, and that the note was fraudulent, of all which she was ignorant at the time; that Grimes afterwards indorsed the check “WILLIAM BROWN," and, adding his own indorsement, presented it to the bank, who paid it. The principal ground of defense was that plaintiff was negligent in delivering the check to Grimes, and that it used ordinary care in paying it to Grimes, indorsed as it was. The case was tried to the court, who, upon the request of the parties, found its conclusions of law and fact separately, as follows: "FINDINGS OF FACTS. "(1) That the defendant is a banking corporation, organized under the laws of the United States. (2) That on August 31, A. D. 1882, plaintiff had on deposit with defendant, subject to be drawn out by her check, a | sum of money greater than the amount of the check hereinafter to be described. (3) That on said 31st day of August, A. D. 1882, one J. S. Grimes, by a fraud practiced upon plaintiff, by negotiating to her, as the pretended agent of one William Brown, a fictitious person, a forged promissory note negotiable in form, induced her to draw and de "CONCLUSION OF LAW. "That the payment of the check by defendant to said Grimes was not (by the facts above found) authorized by said plaintiff, and could not legally be made a charge against her in the account between her and the defendant respecting the money she had on deposit with it, and that the amount named in the check, together with interest thereon at the rate of six per cent. from the day she made the demand above found to have been made, for its payment to her, is due and payable from defendant to her.” A motion for a new trial having been made and overruled, judgment was entered for the plaintiff upon the findings. The judgment of the common pleas was reversed on error by the circuit court, and this proceeding is prosecuted to obtain a reversal of the circuit court, and an affirmance of the common pleas. This case is, in its general features, analogous to that of Dodge v. Bank, 20 Ohio St. 234, and should, as we think, be ruled by it. There a paymaster of the United States, who kept his account at the bank, drew his check on the bank in payment of an indebtedness of the United States to Frederick B. Dodge, and delivered it to the person who presented the certificate, he representing himself to be Dodge. This representation was false, and the person making it was a thief. Being a stranger to the paymaster, he at first refused to pay the claim to him, but, on his assuring him that he could identify himself at the bank, the paymaster drew the check, payable to Dodge or order, and delivered it to the person presenting the certificate. The of Grimes, and in other respects was ordinariamount of the check was paid him by the ly careful and prudent in relation to the transbank on his representing himself to be action; but this must be taken in connection Dodge, and indorsing the check in that name. with the further fact that Grimes was not the The bank had no knowledge of what had tran-payee of the check, and that his indorsement, spired prior to the presentation of the check for payment, and supposed it was paying it to the right person. In deciding the case, the court laid down the following principles: (1) The duty of a banker is to pay the checks and bills of his customer, drawn payable to order, to the person who becomes holder by a genuine indorsement; and he cannot charge him with payments made otherwise, unless the circumstances amount to a direction from the customer to the banker to pay the paper without reference to the genuineness of the indorsements, or are equivalent to a subsequent admission that the indorsement is genuine, in reliance on which the banker is induced to alter his position. (2) When there is no fraud, or special understanding between the banker and the customer, the liability of the banker for paying a check upon a forged indorsement cannot be affected by conduct of the customer in drawing the check, of which the banker had no notice. The case was again brought to this court upon a question of evidence, and was assigned to and disposed of by the first commission, which, after a full and careful re-examination, approved and followed the former decision; and the principles announced in the case, after such careful consideration, must determine this one. without the genuine indorsement of the payee, could confer no title upon the holder of the check, or any interest in it, as against the drawer. "There is no doubt," says Lord KENYON in Tatlock v. Harris, 3 Term R. 181, "but that the indorsee of a bill of exchange, payable to order, must, in deriving his title, prove the handwriting of the first indorser." See Mead v. Young, 4 Term R. 28, 30; 2 Pars. Notes & B. 595. The indorsement on the check, purporting to be that of the payee, Brown, had been placed there by Grimes, and was either a forgery or a fraud, and, for the purposes of this case, it is not material which it is termed. As to it the bank acted upon the representations of Grimes, and did not otherwise know whether it was genuine or not. As said in Dodge v. Bank, 30 Ohio St. 1: "The rightful possession of a check by no means carries with it or implies a right to demand or receive payment of it, without the genuine indorsement of the person to whose order it is made payable;" and if a banker accept or undertake to pay a check, "he must see to it, at his peril, that he pays according to the terms of the order, and to the party named therein, or to one holding it under the genuine indorsement of such payee. * ** And this is true whether the defendant exercised the degree of caution which bankers usually do in such cases or not. The question is, was the check paid to the party to whom, by its terins, it was made payable?" Therefore the court rightly concluded, as a question of law from the facts found, that the payment of the check by the defendant was not authorized by the plaintiff, and that it could not rightfully be charged to her account. By the fraud of one Grimes the plaintiff was induced to purchase a note that had no real existence as a security. She is found by the court to have been ordinarily careful and prudent in the transaction, but was deceived. She supposed that she was purchasing a valid security belonging to a man, as represented by Grimes, by the name of William Brown, and for whom, as he represented, he was acting as agent, and gave to the assumed agent The fact that the check was made payable for Brown a check for the amount, payable to to a person who had no existence does not Brown or his order. Now, it is evident, both alter the rights of the plaintiff as against the upon reason and the authority of the previous bank, for she supposed that Brown was a real decisions, that the circumstances under which person, and intended that payment should be the plaintiff was induced to give the check, made to such person. The doctrine that treats even though calculated to arouse suspicion on a check or bill made payable to a fictitious her part, cannot modify the duty required of person as one made payable to bearer, and the bank in the matter of paying or not pay-so negotiable without indorsement, applies ing the check. It is not claimed that the only where it is so drawn with the knowledge bank had any knowledge of how or under what circumstances Grimes had obtained the check, and there is no finding of any such course of dealing between the bank and the plaintiff as would have authorized it to depart from the general duty of a bank in paying the checks of its customers drawn payable to a certain person or order. It was its duty to pay to the person named or his order, and to withhold payment until it was satisfied, both as to the identity of the payee and the genuineness of his signature. Morse, Bank. § 474; Robarts v. Tucker, 16 Q. B. 560, per MAULE, J., at p. 578. It is found that the bank made the usual inquiries respecting the identity of the parties. Tatlock v. Harris, 3 Term R. 174, 180; Vere v. Lewis, Id. 182; Minet v. Gibson, Id. 481; same case in the house of lords on error, Gibson v. Minet, 1 H. Bl. 569; Collis v. Emett, Id. 313; Gibson v. Hunter, 2 H. Bl. 187. The doctrine that a bill payable to a fictitious person or order is equivalent to one payable to bearer had its origin in these cases, which all grew out of bills drawn by Levisay & Co., bankrupts, payable to a fictitious person or order, and were accepted by Gibson & Co.; but it will be noticed that the holding in each case was upon the express ground that the acceptor knew at the time of his acceptance that the bill was paya ble to a fictitious person; and but for this fact | Law, 151. Now, Mrs. Armstrong can in no the fictitious indorsement would have been way be said to have affirmed by any act of held to be a forgery,-some of the judges ex- hers that the indorsement upon the check pressing a doubt whether it was not so, al- was genuine, for there was no indorsement though its character was known to the ac- on it when it left her hands. The case of ceptor. 3 Term R. 181. These cases will be Rogers v. Ware, 2 Neb. 29, cited by counsel found reviewed in a note to Bennett v. Far- for defendant in error, does not support his nell, 1 Camp. 130. It was held in this case contention. The case of Ort v. Fowler, 31 that a bill made payable to a fictitious person Kan. 478, 2 Pac. Rep. 580, was rested upon or order is neither payable to the order of the a number of grounds; and, in so far as it drawer or bearer, but is completely void. But may have been on the ground that a note in an addendum to the case, at page 180c of made payable to a fictitious person or-order is the Report, Lord ELLENBOROUGH observes in effect payable to bearer, irrespective of that this holding must be taken with this the knowledge of the maker, it simply folqualification: "Unless it can be shown that lows the authority of 1 Daniels, Neg. Inst. the circumstance of the payee being a ficti-§ 139, which, we have shown, is not borne tious person was known to the acceptor." out by the cases relied on. The rule is stated with this qualification in Byles on Bills, 82. See, also, to the same effect, Forbes v. Espy, 21 Ohio St. 483; 1 Rand. Com. Paper, §§ 162-164; 2 Pars. Notes & B. 591, and note a. Mr. Daniels, in his work on Negotiable Instruments, (section 139,) states the rule to be general, but, as shown by Mr. Randolph, the cases do not bear out the text. 1 Rand. Com. Paper, § 164, note 4. And upon principle we do not see how the law could be held to be otherwise. For if the fictitious character of the payee is unknown to the drawer, whoever indorses the paper in that name with intent to defraud perpetrates a forgery, and the indorsement is void; a general intent to defraud being sufficient to constitute the offense. The case of Lane v. Krekle, 22 Iowa, 399, is not in point, for there the note was made payable to a fictitious person "or bearer, and passed by delivery without indorsement. The case of Phillips v. Thurn, 114 E. C. L. 694, cited by the learned judge, is clearly distinguishable from the case before us. There the signature of the drawer as well as the indorsement was a forgery; but the defendant, the acceptor, was held liable because the plaintiff discounted the paper, relying in good faith upon the acceptance of the defendant. The case was finally disposed of on a case stated, reported in L. R. 1 C. P. 463. The ground of the decision appears from the following observations of KEATING, J., (page 472:) "I think, upon the facts stated in this special case, that it was not competent to the defendant to deny the genuineness of this bill. He knew that the plaintiffs were willing to advance money upon the bill only upon his vouching by his acceptance of it the authenticity of the drawing. His acceptance amounted to a representation to the plaintiffs which enabled the person representing Plana to obtain money from the plaintiffs on the bill." The decision in this case simply followed a well-recognized principle in the law of notes and bills. It is thus stated by Mr. Smith: "If the drawer's signature be forged, the drawee, if he accepts the bill, is bound to pay it, provided it be in the hands of a holder bona fide and for value, for the drawee's acceptance admits the drawer's handwriting to be genuine." Smith, Merc. If the drawer of a check, acting in good faith, makes it payable to a certain person or order, supposing there is such person, when in fact there is none, no good reason can be perceived why the banker should be excused if he pay the check to a fraudulent holder upon any less precautions than if it had been made payable to a real person; in other words, why he should not be required to use the same precautions in the one case as in the other, that is, determine whether the indorsement is a genuine one or not. The fact that the payee is a non-existing person does not increase the liability of the bank to be deceived by the indorsement. The fact is that an ordinarily prudent banker would be less liable to be deceived into a mistaken payment by a fictitious indorsement such as this was than by a simple forgery. The determination of the character of any indorsement involves the ascertainment of two things: (1) The identity of the indorser; and (2) the genuineness of his signature; and no careful banker would pay upon the faith of the genuineness of any name until he had fully satisfied himself both as to the identity of the person and the genuineness of his signature. Now, a careful banker may be deceived as to the signature of a person with whose identity he may be familiar; but he is less liable to be deceived when both the signature and the person whose signature it purports to be are unknown to him. In making the inquiry required in such case to warrant him in acting, he will either learn that there is no such person, or that no credible information can be obtained as to his existence, which, with an ordinarily prudent banker, would be the same as actual knowledge that there is no such person, and he would withhold payment, as he would have the right to do in such case. But still, if he should be deceived as to the existence of the person, he would, nevertheless, require to be satisfied as to the genuineness of the signature. Of this, however, he could not be through his skill in such matters, and on which bankers ordinarily rely, for he would be without any standard of comparison, and he could have no knowledge of the handwriting of the supposed person, for there is no such person. So that if he acts at all it must be upon the confidence he may |