In the 1894 case of Evansville Bank v. German-American Bank, the U.S Supreme Court ruled on a dispute between two banks over payment for forged checks. The plaintiff, Evansville National Bank (Evansville), had cashed three checks that were later discovered to be fraudulent and sought reimbursement from the defendant, German-American National Bank (German-American). The latter bank refused to pay arguing that it was not liable because it had acted in good faith when accepting and forwarding the checks for collection. However, Justice Brewer delivered an opinion stating that regardless of its good faith or lack thereof, German-American was still responsible as they presented these items for payment without having taken proper precautions against forgery. Therefore, according to negotiable instruments law principles at play during this time period - which held endorsers liable until paid by subsequent parties - German American should bear loss resulting from fraudulently endorsed drafts since they were last holder before discovery of forgery occurred.

In the dissenting opinion for Evansville Bank v. German-American Bank, Justice Brewer argued that the majority's decision was inconsistent with previous rulings and principles of equity. He contended that a bank should not be held liable for paying on a forged check if it acted in good faith and without negligence. In this case, he believed there was no evidence to suggest that Evansville Bank had been negligent or acted in bad faith when it paid on a check bearing what appeared to be its customer's signature but turned out to be forged by an employee at German-American Bank. Therefore, he felt the loss should fall on German-American Bank as they were responsible for their employee’s actions rather than being passed onto Evansville who merely honored what seemed like legitimate checks from one of its customers.