should award such damages as they believe from all the circumstances plaintiff is entitled to." Appropriate exceptions were taken by defendant. As already observed, there was verdict for $500.

With some exceptions the underlying principle of the law of damages is compensation for the injury done. In cases of malice, willful wrongdoing, a conscious disregard of the rights of others, and the like, an additional award may be given by way of punishment. Again, every invasion of a legal right is presumed in law to cause an injury, and, though none is shown, there may nevertheless be a recovery of nominal damages, with costs of the action. Such a recovery is a judicial recognition of the right and an admonition that it cannot be invaded with impunity. The relation between banker and depositor is one of contract. The right of the latter is that, to the extent of his credit balance subject thereto, his checks drawn and presented according to the customs and usages of the business shall be promptly honored. For a breach of this right an action for damages will lie. If the depositor is a merchant or trader, it will be presumed, without further proof, that substantial damages have been sustained.

This rule proceeds upon the fact, commonly recognized, that the credit of a person engaged in such a calling is essential to the prosperity of his business, and the dishonoring of his checks is plainly calculated to impair it and inflict a most serious injury. In common opinion, substantial damage is the natural and probable consequence of the act, and therefore a substantial recovery may be had, without pleading or proof of special injury. A leading case upon this subject is Rolin v. Steward, 14 C. B. 595, 23 L. J. C. P. 148.

* * *

On the other hand, if the depositor is not a merchant or trader, there is no such presumption of substantial injury, and this recovery should be a nominal one, unless he pleads and proves some special damage. * * * Upon this latter proposition there is confusion and conflict in the decisions of the courts, due in large part to the undiscriminating application of Rolin v. Steward to cases wholly unlike it in the important particular mentioned. But we think the rule stated is more in accord with the fundamental principles of the law of damages.

Counsel contend that the presumption arising in the case of a merchant or trader is merely that he possesses credit, and that when the depositor is not a merchant or trader the fact not presumed may be established by proof, and same right to substantial damages would then follow. The character of the presumption is misconceived. It is not so much the possession of credit, as it is that substantial injury thereto has been inflicted by the dishonoring of the check. The very reason for allowing general substantial damages to a merchant or trader, without a showing of special injury, implies a contrary rule, generally, as to those not of that class. A mere technical violation of a right is no just basis for a recovery of general and substantial damages, where no actual injury is shown, and none appears to follow as the natural and probable consequences of the act. In the case before us there was no averment of particular circumstances or special injury, aside from the protest fees, and none was proved. On the contrary, witnesses of plaintiff, who knew of the dishonoring of his check, testified that his credit was not injured. We think the court erred in instructing the jury that the verdict should be for more than the protest fees and nominal damages.

*

The judgment is reversed, and the cause remanded for a new trial.

CALIFORNIA VEGETABLE UNION v. CROCKER NAT. BANK. (District Court of Appeal, First District, California, 1918. 37 Cal. App. 743, 174 Pac. 920.)

Action by the California Vegetable Union, a corporation, against the Crocker National Bank of San Francisco, a national banking association. From a judgment in its favor granting only a part of the relief demanded, plaintiff appeals.

BEASLY, Judge pro tem. The California Vegetable Union is a Los Angeles concern having a branch house in San Francisco. Of this branch house during the period in which we are interested H. F. Ardery was the manager and Fred B. Weeks the cashier. During the years 1911 and 1912 and until the end of the year 1913 the plaintiff's branch house in San Francisco was a depositor of the defendant bank. The bank was instructed to pay checks of the plaintiff when signed by Fred B. Weeks, its cashier, and H. F. Ardery, its manager. Weeks became an employé of the plaintiff about the 1st of May, 1912, and continued in that employment until about September 1, 1913, when he "departed these quarters for parts unknown, leaving behind him a trail of forged checks." Between September 18, 1912, and August 28, 1913, Weeks forged the name of Ardery to 136 separate checks, all drawn upon the plaintiff's account in the defendant bank, and aggregating $3,972.65. The bank cashed these checks, and charged their amount to plaintiff's account. The checks went through the bank during the various months of this period, and at the end of each month the forged checks paid during that month, together with all the valid checks of the plaintiff, were returned to it, with a list of all checks paid by the bank during that month. * These returned checks and these accounts for all of the months from August, 1912, to August, 1913, although regularly received in the course of business at the end of each month during that period, were never examined by the plaintiff, nor by its manager, Ardery, until some time in September, 1913, after Weeks had absconded. * * *

* *

The principal problem in this case may be stated in the language of the Supreme Court in the case of Otis Elevator Co. v. First National Bank, 163 Cal. 31, 124 Pac. 704, 41 L. R. A. (N. S.) 529, and is as follows: "The claim made by the" appellant "was that * * the evidence presented the simple case of a forgery * * * to which is to be applied the well-settled rule that as between the bank and its customers the payment of forged or altered checks by such bank is made at its peril, and cannot be charged against the depositor's account. This, of course, is the general rule, and it is applied stringently in cases of simple forgery which involve no other elements than that the purported check of the depositor which was paid was a forged one. But this rule is not applied unqualifiedly. It has its limitations and exceptions, as general rules usually have, and is modified to the extent that when some negligent act * * * of the customer has contributed to the payment by the bank, or the facts in a particular case surrounding the forgery of a check and its presentation and payment are of such character as call for the application thereto of some general principle of law or equity, they may be relied on by the bank as an estoppel against the customer, precluding him from denying the correctness of the payment." * *

*

The principle embodied in the case of Otis Elevator Co. v. First Nat. Bank, supra, and the general rule above stated, find emphatic approval

and application in the leading case of Leather Manufacturers' Bank v. Morgan, 117 U. S. 96, 6 Sup. Ct. 657, 29 L. Ed. 811, in which the court, treating the presentation of a bank book written up accompanied by the canceled checks of the depositor to him as an account stated, says: "Where a party to a stated account, who is under a duty, from the usages of business or otherwise, to examine it within a reasonable time after having an opportunity to do so, and give timely notice of his objections thereto, neglects altogether to make such examination himself, or to have it made, in good faith, by another for him, by reason of which negligence the other party, relying upon the account as having been acquiesced in or approved, has failed to take steps for his protection which he could and would have taken had such notice been given," the depositor is estopped by his conduct, to question the conclusiveness of the account stated which arises out of the presentation to him of the account and his failure to examine it and detect the frauds contained therein, and give the bank notice thereof in order that it may protect itself against future frauds of a similar char-` acter." *

* *

Without quoting further, it may be said that the great weight of authority in the United States supports the conclusions arrived at in the cases above cited. It is true that those cases were based upon bank books written up, but there is no distinction in principle between the old-fashioned bank book and the modern statements furnished by a bank to its depositors from time to time upon the balancing of their accounts and the return of the canceled checks to them. Improved methods of bookkeeping in banks do not render inapplicable the rule of law here invoked and applied. To lay down any other rule than that hereinabove stated would be to add an unjust burden to the duties of paying officers of banks. The greatly increased volume of business consequent upon the development of modern commerce, and the almost universal use of checks in settlement of every conceivable obligation, make the post of paying teller of a bank-compelled as he is to know the signature of every depositor of a bank-an exceedingly difficult one. If depositors may regularly at frequent intervals receive their vouchers and be notified, as was the appellant here, of reduced balances of their accounts in banks consequent upon the unfaithfulness of trusted employés during a period of nearly a year, and by neglecting to exercise reasonable supervision over their own business fail to discover fraud which has been perpetrated upon them and the bank, and may thus leave the bank in ignorance of the frauds thus committed, and charge the bank with the losses thus occasioned, then banks and their paying tellers face hard conditions indeed. We do not feel justified in establishing any such rule in this state. For the foregoing reasons, the judgment is affirmed.

*

SECTION 7.-RIGHTS AND LIABILITIES OF PARTIES WITH RESPECT TO ACCEPTANCES AND PAYMENTS FOR HONOR

(a) WHEN ACCEPTANCE OR PAYMENT PERMITTED Section 161. Where a bill of exchange has been protested for dishonor by non-acceptance, or protested for better security, and is not overdue, any person not being a party already liable there

on may, with the consent of the holder, intervene and accept the bill supra protest for the honor of any party liable thereon, or for the honor of the person for whose account the bill is drawn. The acceptance for honor may be for part only of the sum for which the bill is drawn; and where there has been an acceptance for honor for one party, there may be a further acceptance by a different person for the honor of another party.

Section 171. Where a bill has been protested for non-payment, any person may intervene and pay it supra protest for the honor of any person liable thereon or for the honor of the person for whose account it was drawn.

Section 174. Where two or more persons offer to pay a bill for the honor of different parties, the person whose payment will discharge most parties to the bill is to be given the preference.

(b) WHAT CONSTITUTES ACCEPTANCE AND PAYMENT Section 162. An acceptance for honor supra protest must be in writing, and indicate that it is an acceptance for honor, and must be signed by the acceptor for honor.

Section 172. The payment for honor supra protest in order to operate as such and not as a mere voluntary payment, must be attested by a notarial act of honor which may be appended to the protest or form an extension to it.

Section 173. The notarial act of honor must be founded on a declaration made by the payer for honor or by his agent in that behalf declaring his intention to pay the bill for honor and for whose honor he pays.

(c) PRESENTMENT FOR ACCEPTANCE TO ACCEPTOR FOR HONOR, DISHONOR BY ACCEPTOR FOR HONOR, AND EXCUSES

FOR NON-PRESENTMENT

Section 166. Where a bill payable after sight is accepted for honor, its maturity is calculated from the date of the noting for non-acceptance and not from the date of the acceptance for honor. Section 168. Presentment for payment to the acceptor for honor must be made as follows:

1. If it is to be presented in the place where the protest for nonpayment was made, it must be presented not later than the day following its maturity.

2. If it is to be presented in some other place than the place where it was protested, then it must be forwarded within the time specified in section one hundred and four.

Section 170. When the bill is dishonored by the acceptor for honor it must be protested for non-payment by him.

Section 169. The provisions of section eighty-one apply where there is delay in making presentment to the acceptor for honor or referee in case of need.

(d) RIGHTS AND LIABILITIES OF THE PARTIES Section 165. The acceptor for honor, by such acceptance engages that he will, on due presentment, pay the bill according to

the terms of his acceptance, provided it shall not have been paid by the drawee, and provided also, that it shall have been duly presented for payment and protested for non-payment and notice of dishonor given to him.

Section 164. The acceptor for honor is liable to the holder and to all parties to the bill subsequent to the party for whose honor he has accepted.

Section 175. Where a bill has been paid for honor, all parties subsequent to the party for whose honor it is paid are discharged, but the payer for honor is subrogated for, and succeeds to, both the rights and duties of the holder as regards the party for whose honor he pays and all parties hable to the latter.

Section 176. Where the holder of a bill refuses to receive payment supra protest, he loses his right of recourse against any party who would have been discharged by such payment.

Section 177. The payer for honor, on paying to the holder the amount of the bill and the notarial expenses incidental to its dishonor, is entitled to receive both the bill itself and the protest.

SECTION 8.-BILLS IN A SET

N. I. L., Section 178. Where a bill is drawn in a set, each part of the set being numbered and containing a reference to the other parts, the whole of the parts constitutes one bill.

N. I. L., Section 179. Where two or more parts of a set are negotiated to different holders in due course, the holder whose title first accrues is as between such holders the true owner of the bill. But nothing in this section affects the rights of a person who in due course accepts or pays the part first presented to him.

N. I. L., Section 180. Where the holder of a set indorses two or more parts to different persons he is liable on every such part, and every indorser subsequent to him is liable on the part he has himself indorsed, as if such parts were separate bills.

N. I. L., Section 181. The acceptance may be written on any part and it must be written on one part only. If the drawee accepts more than one part, and such accepted parts are negotiated to different holders in due course, he is liable on every such part as if it were a separate bill.

N. I. L., Section 182. When the acceptor of a bill drawn in a set, pays it without requiring the part bearing his acceptance to be delivered up to him, and that part at maturity is outstanding in the hands of a holder in due course, he is liable to the holder thereon.

N. I. L., Section 183. Except as herein otherwise provided where any one part of a bill drawn in a set is discharged by payment or otherwise the whole bill is discharged.