Bank of Niles v. American State Bank

The plaintiff Bank of Niles, payee of an instrument entitled “Bank Money Order” issued by the defendant American State Bank, sued the issuing bank and the Central National Bank in Chicago on that instrument. After a bench trial, the court entered judgment for the defendants and the plaintiff appeals.

The instrument so described had been issued in consideration of another check which later proved to have been forged, and the real issue here is whether the plaintiff, bank is a holder in due course so as to cut off. the defense of failure of consideration. We hold that it is and reverse insofar…