562 HARVARD LAW REVIEW not sell the bill of lading to the drawee, but merely relinquishes his lien in exchange for the new security afforded by the acceptance.^ It has been argued that he ought to be liable on quasi-contractual grounds to refund money paid under a mistake of fact as to the genuineness of the bill of lading/ and that the cases are consequently wrong. Dean Ames, however, points out that imder the doctrine of Price v. Neal the principle of imjust enrichment can not be applied to shift this loss from one innocent person to another.^ The drawee has paid value for the draft and bill of lading, but so has the holder, and when the holder has the money the drawee possesses no superior equity to take it away from him. Those who reject Dean Ames's explanation of Price v. Neal and rest that case on the duty of the drawee to find out that the draw- er's signatvu-e has been forged ^ can not support the bill of lading cases; in the same way, for a drawee in England is certainly in no position to pass upon the genuineness of the signature of an American freight agent. The only sound explanation, apart from Dean Ames's, is that a bond fide purchaser of a genuine bill of exchange should not be affected by extrinsic transactions between the drawer and drawee,^" even though they involve fraud ^^ or failure of consideration.^ It is just as if the drawee had accepted or paid the draft under a mistake about the finan- cial standing of the drawer or the value of collateral copper stock.^' The Knight, Yancey and Company cases, however, introduce an S. W. 19 (1914); Spencer & Co. v. Bank of Hickory Ridge, 115 Ark. 326, 171 S. W. 128 (1914) semble; American National Bank v. Warren, 96 Misc. 265, 160 N. Y. Supp. 413 (191 6), accord. The principle is recognized by aU the cases on drafts which refer to the goods. See notes 14, 15, infra. The holder of the bill of lading for security is not a warrantor under § 37 of the Uniform Bills of Lading Act, en- acted as § 36 of the Federal Pomerene Act, August 29, 1916, c. 415; 39 U, S. Stat. 544; 8 U. S. CoMP. Stat. 1916, § 8604 rr. The contrary doctrine of warranty by the holder was adopted in a few cases which have been overruled except perhaps in Mis- sissippi. WiLLiSTON, loc. oil.; Cosmos Cotton Co. v. First National Bank, 171 Ala. 392, 54 So. 621 (1911).
- James Barr Ames, 4 Harv. L. Rev. 302, Lectures on Legal History, 270,
quoted by Pickford, L. J., in Guaranty v. Hannay, [1918] 2 K. B. 623, 631 (C. A.); Warrington, L. J., Ibid., 653. « Keener, The Law of Quasi- Contracts, 154, note: "It is impossible to recon- cile with the principles that have been considered in this chapter many of the results reached." ^ 3 Burr. 1354 (1762). The drawee of a bill of exchange who has paid it can not recover the money from the holder, jdthough the drawee's name is forged. See Lord Mansfield's opinion. 8 James Barr Ames, "The Doctrine of Price v. Neal," 4 Harv. L. Rev. 303, Lec- tures ON Legal History, 393, citing among other cases Leather v. Simpson, L. R. II Eq. 398 (1871); First National Bank v. Burkham, 32 Mich. 328 (1875). See also Guaranty v. Hannay, 210 Fed. 810, 813 (C. C. A. 2d, 1913); Ibid., [1918] 2 K. B. 623, 633, 664 (C. A.). In Munson v. De Tamble, 88 Conn. 415, 91 Atl. 531 (1914), the holder was held liable as a seller. 9 Woodward, The Law of Quasi-Contracts, § 91. "> Woodward, loc. cit., and cases cited; Tolerton v. Anglo-California Bank, 112 Iowa 706, 84 N. W. 930 (1901). " Fort Dearborn v. Carter, 152 Mass. 34, 25 N. E. 27 (1890); Alton v. First National Bank, 157 Mass. 341, 32 N. E. 228 (1892); Heuertematte v. Morris, loi N. Y. 63 (1885), 4 N. E. i; Southwick v. First National Bank, 84 N. Y. 420, 433 (1881). ^ Guaranty v. Hannay, [1918] 2 K. B. 623, 632, 662 (C. A.); Robinson v. Reynolds, 2 Q. B. Rep. 196, 211 (1841); I Daniel, Negotiable Instruments, 6 ed., § 174 a. » Springs V. Hanover National Bank, 209 N. Y. 224, 233, 103 N. E. 156, 158 (1913)-,
