and in not anticipating that the mules might back off the boat before they were safely upon it.

[Ed. Note.-For cases in point, see vol. 23, Cent. Dig. Ferries, §§ 86, 87.]

8. SAME-CONTRIBUTORY NEGLIGENCE.

A driver of a team, who is signaled by a ferryman to go upon the boat, may rely upon the skill and knowledge of the ferryman, and is not guilty of contributory negligence in driving upon the boat although he knows that it is not fastened to the bank.

[Ed. Note.-For cases in point, see vol. 23, Cent. Dig. Ferries, § 84.]

Surprise in the evidence of a certain witness as to the date of a conversation, and the discovery of new contradictory evidence, is not ground for a new trial, where the party applying therefor substantially admitted in his evidence that the conversation referred to took place on the date specified, but denied the things claimed to have been said therein, and the newly discovered witness does not undertake to testify to the substance of the conversation, and does not state that he was present thereat.

Error to Circuit Court, Haywood County; J. R. Bond, Judge.

Action by O. Alexander against J. R. Wilson. There was a judgment for plaintiff, and defendant brings error. Affirmed.

King & Willis, for plaintiff in error. Bond, for defendant in error.

Bate

NEIL, J. This action was brought to recover damages for the negligent drowning of two mules at a ferry in Haywood county, alleged to belong to the defendant below, Wilson, plaintiff in error here. The case was heard before the circuit judge without the intervention of a jury. A judgment was rendered in favor of the defendant in error for $303, the value of the mules and the harness on them at the time, also sued for.

The theory of the plaintiff below was that the ferry was both owned and operated by Wilson at the time of the injury; that the person then actually in charge of the ferry and operating it, one Ike Williamson, was the servant or employé of the defendant Wil

son.

The defendant below advanced two theories. The first one was that he had sold the ferry and the land adjoining it to Ike Williamson by parol, and that when the injury occurred, January 11, 1904, his vendee, Williamson, was operating the ferry on his own account, as owner. His second theory is that, if the first be not made out in the evidence, then that Williamson was his tenant for the year 1903, and was holding over for the year 1904 on the same terms under which he had rented the property for the previous year.

The chief error assigned by defendant below on his appeal to this court is that there is no evidence to sustain the judgment rendered by his honor the circuit judge.

In disposing of this assignment, two principles must be kept in view. The first is

that the theory of the facts most favorable to the party successful below must be the one adopted here. The second is that the assignment we are to consider always raises a question of law as well as one of fact; that is, treating as established the version of the facts most favorable to the party successful below, the question always arises, do these facts establish in law a ground for relief, or a defense, as the case may be; in short, do these facts justify in law the decision which the lower court reached, whether for plaintiff or defendant?

We shall, for convenience, take up at this point the first theory of the defendant below-the theory of a parol sale on December 1, 1903, consummated by a writing on January 23, 1904.

The plaintiff below contends that the two witnesses who testify to the parol sale, Wilson and Ike Williamson, are both discredited; the first by contradiction of his evidence. by other witnesses, and the second by direct impeachment through the testimony of witnesses who say that he is unworthy of belief; and, further, that the theory of a parol sale was a thing hatched up between these two after the accident to the mules, with a view to evading on the part of Wilson any claim which the plaintiff below might have against him. We are bound to say that there is some evidence to support both of these contentions, and we must treat the facts as so established. It results that we must conclude that there is nothing in defendant's first contention.

We shall consider together the defendant's second contention and the plaintiff's basic contention, the latter being, as stated, that Wilson, after January 1, 1904, was operating the ferry through Ike Williamson as his agent or servant.

There is no direct evidence to support this contention. We have seen that both Wilson and Williamson say that the latter was operating it under his alleged parol purchase, but, as stated, this solution cannot be considered, because the circuit judge, on the grounds already stated, had the right to disbelieve the evidence of these witnesses, and we must assume that he did. The plaintiff says that it is shown that Wilson was the owner of the property at the time of the accident, and that Ike Williamson was operating it. There is evidence to support this conclusion, and it must be treated as established. Plaintiff also says that, if a man is seen operating the machinery of a carrier, this fact, unexplained, is sufficient to justify the conclusion that the latter is acting as a servant of the former. We think this is a sound general deduction, if there is nothing in the manner or circumstances of the occurrence to negative the conclusion. Applying this deduction, counsel for plaintiff below argues that, inasmuch as Wilson was the owner of the ferry, and Ike Williamson was operating it, and the evidence of neither of these wit

nesses is credible, and the fact is unexplained, we must conclude that Ike Williamson was in fact the agent or servant of the said Wilson.

But defendant's counsel says there is an explanation in the evidence. He insists as matter of fact that it is shown that Ike Williamson was the tenant of Wilson for the year 1903, and, as matter of law, that the presumption would be, if the said Williamson held over after the expiration of his term, the year 1903, into the next year, 1904, he would occupy the relation of tenant to his former landlord on the same terms as those of the preceding year. The statement of fact as to the tenancy of 1903 is sustained by the witness Rawlings, and there is no evi- | dence to the contrary. The statement of the legal principle, if there was in fact a holding over, is sustained by our own cases of Brinkley v. Walcott, 10 Heisk. 22, and Hammond v. Dean, 8 Baxt. 193; Hendrixson v. Cardwell, 9 Baxt. 391, 40 Am. Rep. 93; Noel v. McCrory, 7 Cold. 623; Shepherd & Mitchell v. Cummings, 1 Cold. 354; and the principle is a general one.

So, if we assume that Ike Williamson was holding over, the conclusion seems inevitable that he was operating the ferry at the date of the accident as the tenant of defendant, Wilson, and not as his agent or servant.

Plaintiff's counsel, however, refers to a circumstance which he insists furnishes evidence that Ike Williamson was the servant of Wilson, and not holding over as his tenant. This fact is that when the mules were drowned Ike Williamson immediately went to the home of Wilson, and told him of the calamity that had happened, and Wilson thereupon, though an old man, braved the wintry weather of January, and proceeded to the ferry, 20 miles away, to investigate the matter, a journey that required of him two days and one night going, pursuing his investigations, and returning; and that while near the ferry he hunted up the man who drove the mules, and made inquiry of him.

Counsel for the plaintiff rightly argued that these facts showed great concern on the part of Mr. Wilson. He argued further that this great concern was natural and reasonable if defendant Wilson was operating the ferry himself through Ike Williamson as his agent or servant, and was therefore responsible for the negligence of the latter; but quite unreasonable if the latter was only a tenant, and therefore responsible himself, only, for injuries. This view is certainly a strong one. The inference seems to be sound and just.

His honor the circuit judge had the power to choose between this view of the matter and the one just presented in favor of the defendant. He had the right to hold, and no doubt did hold, that the facts referred to furnished a direct inference of fact that Ike Williamson was holding after January 1st as the servant of Wilson, and not as his tenant;

ner:

The ferryboat was defective in that it had holes in the floor through which the water could be seen. Likewise, it had no means of fastening it to the bank. When the mules were driven on, hitched to the wagon, they began to back, and in doing so pushed the hind wheels against the bank, and the boat out from under them in front, and so fell forward into the river, and were drowned. Plaintiff's servant, Hop Wilkes, knew that the boat was not attached to the bank, but was told by Ike Williamson, the servant of defendant in charge of the ferry, to drive on, which he did, with the result stated.

In Sanders v. Young it is said: "A ferryman is liable as a common carrier. * Irrespective of the statute of 1842, the keeper of a public ferry is bound to have a boat safe and sufficient for all of the uses and purposes incident to his employment. He is likewise bound at all times to have a skillful ferryman, and a sufficient force to manage the boat, and to take proper care of persons and all kinds of property received for transportation; and for all loss or injury occasioned by neglect of these duties and precautions he is liable." 1 Head, 220, 221, 73 Am. Dec. 175.

"As soon as the ferryman signifies his assent to receive horses and vehicles upon his boat, his liability as a common carrier attaches, and it necessarily continues until the property is landed." 12 Am. & Eng. Ency. Law (2d Ed.) p. 110.

In Cohen v. Hume, 1 McCord (S. C.) 439, wherein the above principle was expressed, it was held that the ferryman's liability as a common carrier attached, although the vehicle was only upon the slip and was being driven by the servant of the owner.

In May v. Hanson, 5 Cal. 360, 63 Am. Dec. 135, wherein the injury complained of occurred while the wagon was being driven from the boat, the same rule was stated. In this latter case it is said: "The principle deduced from the authorities is that as soon as the ferryman signifies his assent or readiness to receive the passenger he becomes liable for his safe transit and delivery, and is liable if any accident occurs, except by act of God or the public enemy."

"In two of the cases just cited the accident occurred in driving into the flat or boat, and in both cases it was held to be the duty of the ferryman to see that the teams were safely driven on board the boat. 'If,' says the court in those cases, 'the ferryman thinks proper, he may drive himself, or may unhar

ness the team or unload them for the purpose of getting them safely on board; but if he permit the party to drive himself, he constitutes him quoad hoc his agent, and is responsible for all accidents.'" May v. Hanson, 63 Am. Dec. 137. And in Blakeley v. Le Duc, 19 Minn. 187 (Gil. 152), it was held that the ferryman's liability had attached, although only the front wheels of the stage coach had gotten upon the boat when the boat broke away from the bank.

In Willoughby v. Horidge, 12 C. B. 742, 74 E. C. L. 742, a ferryman was held liable for injuries to a horse which fell from the slip in leaving the boat, owing to the defective condition of the guard rail. In Richards v. Fuqua's Adm'rs, 28 Miss. 792, 64 Am. Dec. 121, a ferryman was held liable for loss of a wagon and mule attached thereto, caused by the boat, which was not provided with an apron, breaking from its moorings, owing to their defective condition, when the gunwale was struck by the rear wheels of the wagon.

In Sturgis v. Kountz, 165 Pa. 358, 30 Atl. 976, 27 L. R. A. 390, a ferryman was held liable for the loss of a horse, which, on being frightened by a whistle, backed from the boat through a defective guard chain.

In Lewis v. Smith, 107 Mass. 334, in which the plaintiff sought to recover for the loss of a horse, which was under his control while on the boat, and which fell from the boat for want of barriers at the forward end, eviIdence that the boat had been operated without barriers for 30 years without accident was held inadmissible.

We are of the opinion that in the present case the ferryman became liable for the property as soon as his agent directed the driver of the vehicle to drive upon the boat, and that it was negligence on the part of the ferryman in not having the boat secured to the bank; also in permitting holes in the bottom of the boat; also in not anticipating just such an occurrence as happened, viz., that the team might back off of the boat before they were safely placed upon it.

We are of opinion that it was not contrib

utory negligence on the part of the driver of the vehicle to go upon the boat at the invitation of the ferryman, although he knew the boat was not fastened to the bank. He had the right to rely upon the skill and knowledge of the ferryman. Indeed, as has been seen, the property passed into the custody of the ferryman immediately upon his directing the driver to go upon the boat with the team.

It is insisted by the defendant that, even after the horses got into the water they might have been saved but for the negligence of the servant of the plaintiff in not properly assisting in the rescue of the animals. One of the witnesses of the defendant, who undertakes to prove this circumstance, is discredited by testimony of the witnesses who say he is unworthy of belief, and the other by self-contradictions, and we need not consider this matter further. The circuit judge no doubt disregarded their evidence entirely, as he had the right to do, and, following the rule already laid down as to taking the most favorable view in behalf of the party who was successful below, we must do the same.

It is insisted that a new trial should be granted because of surprise in the evidence of one Dickinson as to the fixing of a certain date and the discovery of evidence whereby it could be shown that Dickinson was incorrect. We think this is immaterial. It is substantially admitted by the defendant, Wilson, in his testimony that the conversation referred to did take place on the date fixed by Dickinson, but he denies that the things were said in that conversation which Dickinson claims were said. The new witness does not undertake to say anything about the substance of the conversation, and does not say that he was present thereat. His evidence would be of no service, and a new trial should not be granted therefor. Turnley v. Evans, 3 Humph. 223.

The foregoing covers the substance of all of the matters contained in the several assignments filed, and, none of them being sustained, the judgment of the court below must be affirmed.

FARMERS' & MERCHANTS' BANK v. BANK OF RUTHERFORD. (Supreme Court of Tennessee.

June 3, 1905.) 1. BILLS AND NOTES-FORGED INSTRUMENTSNEGLIGENCE OF DRAWEE.

A bank on which a forged check is drawn in the name of a customer, whose signature is well known to it, is negligent, where the cashier does not examine the signature closely, but passes the check, relying on previous indorse

ments.

[Ed. Note.-For cases in point, see vol. 6, Cent. Dig. Banks and Banking, §§ 439, 453.] · 2. BANKS-PAYMENT OF CHECKS-BEARER OF PAPER-NECESSITY OF IDENTIFICATION.

Where a check is in the ordinary form, and is payable to bearer, so that no indorsement is required, a bank, to which it is presented for payment, need not have the holder identified, and is not negligent in failing to do so. 3. BILLS AND NOTES LIABILITY OF INdorsers-WARRANTY OF SIGNATURE.

An indorser of negotiable paper does not warrant to the drawee the genuineness of the maker's signature, but such warranty only extends to subsequent holders in due course of trade.

[Ed. Note. For cases in point, see vol. 7, Cent. Dig. Bills and Notes, §§ 669, 670.] 4. SAME-PAYMENT OF FORGED INSTRUMENTEFFECT ESTOPPEL AGAINST DRAWEE.

Where the drawee bank received and paid a forged check, which had been previously honored and indorsed by other banks, and held the check for 30 days or more, it thereby admitted the same to be correct, and was estopped to deny the genuineness thereof, or to avoid, as to the indorsing banks, the effect of its act in accepting and paying the check.

[Ed. Note. For cases in point, see vol. 7, Cent. Dig. Bills and Notes, § 127.]

5. SAME-ACCEPTANCE OF CHECK-GUARANTY OF GENUINENESS.

The drawee of a check, by accepting the same, makes himself a guarantor thereof. [Ed. Note.-For cases in point, see vol. 7, Cent. Dig. Bills and Notes, § 127.]

Appeal from Chancery Court, Gibson County; John S. Cooper, Chancellor.

Suit by the Farmers' & Merchants' Bank against the Bank of Rutherford. From a decree for complainant, defendant appeals. Reversed.

Deason, Rankin & Elder, for appellant. W. S. Coulter, for appellee.

WILKES, J. The bill was filed by complainant bank against the defendant bank to recover from it the amount of a forged check, which was drawn on complainant bank, for $54.75, and, after being indorsed by the defendant bank and others, was presented to, and paid by, complainant bank.

The check was in the words and figures following:

"Dyer, Tenn., Octo. 28, 1903. "Farmers' & Merchants' Bank: "Pay to J. L. Freeman, or bearer, fiftyfour 75/100 dollars. For cotton.

"Johnston Merc. Co."

The ground upon which the recovery was sought was that the Bank of Rutherford was negligent in cashing this check for a stranger without identification, and thereafter indors

ing it, so as to give it circulation, and to mislead complainant bank, the payee, to presume it was genuine, and pay it to the holder.

The check, after being indorsed in the name of J. L. Freeman, was cashed by the Bank of Rutherford, and indorsed by it, and passed to the Jackson Banking Company, then to the St. Louis Trust Company, Continental National Bank of Chicago, and Fourth National Bank of Nashville, and by the latter bank was sent by mail to complainant as the drawee bank, and paid by it. The complainant bank at the time of payment wrote or stamped on its face the words: "Paid Nov. 7, 1903. Farmers' & Merchants' Bank, Dyer, Tenn."

The cashier of complainant bank states that, when the check was presented for payment, he did not examine the signature closely, and, if he had, he would have detected that it was a forgery, but that he was thrown off his guard by the indorsements of the defendant bank and others.

It held the check, thus cashed and marked "Paid," some 30 days, when the forgery was discovered, whereupon it entered up a credit upon the account of the mercantile company to balance the charge made against it when it was paid, and thereupon brought suit against the Bank of Rutherford for the amount of the check.

The chancellor gave judgment for the amount, and the Bank of Rutherford has appealed and assigned errors.

It is insisted that the case is governed by the principles announced in People's Bank v. Franklin Bank, 88 Tenn. 299, 12 S. W. 716, 6 L. R. A. 724, 17 Am. St. Rep. 884.

In that case it was held that a bank that negligently cashed a forged check, purporting to be drawn upon another bank, and had upon its indorsement of such check received payment of the drawee bank, is liable for the amount paid by it upon discovery that the check is forged, and the fact that the indorser bank is unable to give the name of the person who presented the forged check, to whom it was paid, or to positively identify such person, is sufficient evidence of negligence to make it liable, and that the drawee bank will not be precluded from recovery by the fact that, relying upon the indorsement of the indorsing bank, it paid the check without investigation as to its genuineness.

If this case is not distinguishable from that in some essential feature, and that is affirmed as sound, it must be considered as determinative of the present case.

As an original proposition we would not assent to the correctness of People's Bank v. Franklin Bank, and think the great weight of authority is against it, and that it is contrary to one of the most important rules regulating the law of negotiable instruments, to wit, that the drawee of the check should be held to know the signature of its customers, and to pay only such paper as has a genuine signature.

But we think there are two important distinctions between People's Bank v. Franklin Bank and the present case.

The first is that in that case the payment was made direct by the drawee bank to the bank that negligently cashed the check, and, after indorsing it, put it in circulation, and, as against the indorsing bank, there was no consideration received by the drawee bank, while in the present case the check had passed through a number of hands, and had been paid, not to the alleged negligent bank, but to the Nashville bank.

In the present case the drawee bank is not suing the Nashville bank, from which it received the check, and to whom it paid the money, but is suing a remote indorser, with whom it had no transaction, except as a remote indorser.

In other words, the Rutherford bank received none of the money of the complainant bank, but it received the amount of the check from the Jackson Banking Company. It is the Nashville bank which has received the money of the complainant bank for the worthless paper cashed by it.

In addition, the check in People's Bank v. Franklin Bank was payable to the order of Morgan, and was indorsed in the name of Morgan; the indorsement being also a forgery. In order to cash this check, it was necessary that it be indorsed by Morgan, and that he should be identified; and it was incumbent on the bank, when it cashed it, to see that the indorsement was made, and that it was genuine.

But in the present case the check was payable to Freeman, or bearer. It was not necessary to be indorsed at all, and was indorsed, as the proof shows, simply as a compliance with the custom of the Rutherford bank. It was not only not necessary that it should be indorsed, but it was not necessary that Freeman, the holder, should be identified, and hence it was not negligence in the bank to fail to have him identified, and it was a bona fide holder, if it paid to bearer, with or without indorsement.

In People's Bank v. Franklin Bank identification and a genuine indorsement were not only material, but absolutely necessary, and a failure to require them was negligence. In the present case neither indorsement nor identification was necessary, and a failure to require them was not negligence.

Liability in People's Bank v. Franklin Bank is predicated upon negligence, which does not exist in the present case.

On an examination of the record we are not able to find any negligence on the part of the Rutherford bank, while that of the complainant bank is apparent and glaring; and, if a comparison is allowable, the negligence of the drawee bank was much the greater.

The mercantile company was its customer, and had been for years. Its place of business was next door to the complainant bank. Its signature was well known to complainant bank. The cashier says he did not examine the signature closely, or he would have easily have detected the forgery.

On the other hand, there was nothing to excite the suspicion of the Rutherford bank. It was a common cotton check, such as was usual and common in every day transactions; and, being payable to bearer, it was not necessary to identify the holder when it was cashed.

We are of opinion that the indorser of negotiable paper does not warrant to the drawee the genuineness of the signature of the maker, but such warranty only extends to subsequent holders in due course of trade. The drawee of the check is the party to pass upon the genuineness of the signature of the drawer.

This is the rule, we think, by the law merchant and by the negotiable instrument law. It is the rule laid down in New York, upon whose statute our negotiable instrument law is based, and of which it is substantially a copy; and, in construing the negotiable instrument law, it has been said by this court in Unaka Bank v. Butler, 83 S. W. 657, that great weight should be given to the decisions of New York.

In this case the complainant bank received and paid the check, thereby admitting the check to be correct, and held it for 30 days or more, and it is precluded and estopped to deny the genuineness of the signature, or to avoid the effect of its act in accepting the check and paying it.

The indorser of a check does warrant and guaranty the genuineness of the check to all subsequent holders in due course; but the drawee is not a holder in due course.

A holder in due course is defined, in section 52, p. 150, of the negotiable instrument act (Acts 1899, c. 94), and the definition does not embrace the case of a drawee.

A holder means a payee or indorsee who is in possession, or the bearer. Acts 1899, p. 139, c. 94.

The drawee, when he accepts the check, makes himself the guarantor thereof.

The liability of an indorser only arises when the necessary proceedings on dishonor are taken; but this feature of the law is not presented in this case.

Without commenting further upon the several points raised by counsel, we are of opinion that the complainant bank has no right in law, or in equity and good conscience, to recover from the defendant bank the amount of this check, and the chancellor was in error; and his decree is reversed, and the suit is dismissed, at cost of complainant.