Court Opinion

ID: 5257084
Source: CourtListenerOpinion
Date Created: 2022-01-06 18:31:12.241886+00
Date Added: 2024-06-11T08:28:01.792261
License: Public Domain

Rich, J. (dissenting):
Plaintiff had been a depositor in defendant’s bank for several years, and on the 20th of October, 1916, had a balance to her credit in the interest department of the bank of $1,113.03. On that day she went to the bank and informed the cashier that she wished to draw a draft for $1,100, payable to Homer E. Remsen, who was to receive the money on a bond and mortgage. The defendant’s cashier told her to draw the draft to her own order and to indorse on the back, “ Pay to the order of Homer E. Remsen,” and he told her that it would be a receipt for the money and it would be payable only to Homer E. Remsen. The cashier thereupon drew the check in that form, handed it to the plaintiff, who immediately took the draft to the lawyer through whom the loan was made, and there indorsed the same to the order of Homer E. Remsen as directed by the defendant’s cashier. She thereupon delivered the draft to the lawyer and received from him a bond purporting to have been executed by Homer E. Remsen *791and Alice Bemsen, his wife, and was told that the mortgage would be recorded. The lawyer at the same time gave plaintiff a certificate of title to this property, signed by himself, and a fire insurance policy purporting to cover the property of Homer E. Bemsen.
There was no such person as Homer E. .Bemsen. The lawyer deceived the plaintiff in making the application for the loan, he forged the names of Homer E. Bemsen and Alice Bemsen to the bond and mortgage, he forged the notary’s certificate, and he forged the name of Homer E. Bemsen to the draft, presented it to the bank and was paid the money, to wit, $1,100, and then killed himself. Belying upon the rule that the bank will disburse the money standing to the depositor’s credit only upon his order and in conformity with his directions, and that the bank will ascertain that the indorsements upon the check are genuine, and that payments made upon forged indorsements are at its peril, unless it can claim protection upon some principle of estoppel (Shipman v. Bank S. N. Y., 126 N. Y. 318), plaintiff seeks to recover the balance to her credit. It seems that Bushnell, the lawyer who forged the draft, was the owner of the premises, and appellant argues that the plaintiff intended that the draft should be payable to the order of the. person who owned the property and executed the bond and mortgage, and that person was Bushnell, so that his indorsement was not a forgery and the defendant was not hable, that the proceeds of the draft went where she intended them to go and that in return she received the bond and mortgage. This contention is not borne out by the facts.
She thought she was investing her money upon the bond and mortgage of Homer E. Bemsen and Alice Bemsen and she did not receive the bond and mortgage she supposed she was purchasing. In support of its contention, however, the appellant cites, among other cases, Hartford v. Greenwich Bank (157 App. Div. 448). In that case the swindler made very elaborate preparations for defrauding his employer. He procured to be printed billheads bearing the name of James Wilson, and the address, Boom 1012, Fuller Building, New York. He rented a post office box in the name of James Y/ilson. He opened an account in the defendant bank under *792the name of James Wilson. Having thus prepared the way, the swindler proceeded to defraud the tea company into giving him a check for $1,543.50. He made out a bill upon one of his fictitious billheads purporting to show that James Wilson had sold goods to the value stated to the tea company. Thereafter in due course a check for the amount indicated was made out to James Wilson, signed and mailed. There was an actual person calling himself James Wilson, although that was not his real name, and it was that person to whom the tea company intended its check should be paid. The Hartford case seems to be based upon the ground that the check was made payable to the “ impostor ” himself. In the cáse at bar the plaintiff, never intended that the draft should be payable to the person who obtained the money upon it. True, the payee named proved to be a fictitious person, but this was unknown to plaintiff. As was said by Mr. Justice Smith in a well-considered opinion in United Cigar Stores Co. v. Am. Raw Silk Co., Inc. (184 App. Div. 217, 219): “ The Hartford case, however, is a border line case and should not be extended beyond the facts thereof.”
Plaintiff supposed she was loaning money to the person to whom she made the check payable; it was not indorsed by the intended payee and no. title passed. (Shipman v. Bank S. N. Y., supra; United Cigar Stores Co. v. Am. Raw Silk Co., Inc., supra.) Homer E. Remsen was a fictitious person created by Bushnell; he never represented himself to be Remsen and the plaintiff had no knowledge that Bushnell owned the property described in the mortgage. In a word, it was the duty of the defendant to know that the indorsement upon the draft was the genuine signature of Homer E. Remsen. While the slightest inquiry would have disclosed the forgery, it was content to pay the draft, presumably relying upon the indorsement of Bushnell, and now seeks to charge plaintiff’s account with the amount. This I do not think it could do. I must, therefore, vote to affirm the judgment.
Putnam, J., concurs.
Judgment reversed and new trial granted, with costs to abide the event.