Misc.] Supreme Court, January, 1918. THE MANUFACTURERS' BANK OF COHOES, Plaintiff, v. THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant. (Supreme Court, Albany Special Term, January, 1918.) Banks payment of check where indorsement of payee's name was a maker not liable to bank in action for money had and forgery received. The assistant superintendent of defendant, an industrial insurance company, by means of forged proofs of death of certain of its policy holders, received from it for delivery to the payees therein named checks payable to the respective claimants. He forged an indorsement of the payee's name on each of the checks and upon his indorsement of them as assistant superintendent the amount of the checks was credited by the plaintiff bank to his personal account and he used the money for his own purposes. In an action by the bank to recover from the insurance company the amount of said checks, as for money had and received by it from plaintiff, it did not appear that defendant ever received any of the proceeds of said checks from the assistant superintendent. Held, that plaintiff was chargeable with reasonable diligence to see that the signatures were not forgeries. That there was no duty resting upon defendant to look for forged indorsements of the names of the payees of the checks or to compare the indorsements thereon with the genuine signatures on file in its office. That defendant was entitled to judgment dismissing the complaint. ACTION to recover for money had and received. Edgar T. Brackett (William E. Bennett and Edgar T. Brackett, of counsel), for plaintiff. Fellows & McElwain (James Guest, on the brief) for defendant. Supreme Court, January, 1918. [Vol. 102. RUDD, J. The plaintiff brings this action to recover $5,541.57 for money had and received by the defendant from the plaintiff. The facts from which this action arises tell an interesting story of successful criminal acts on the part of Ira J. Bayliss, who succeeded in stealing during a period from December, 1906, to February 18, 1908, from the plaintiff the sum of money for which this action is brought. Bayliss was the assistant superintendent in the city of Cohoes of the defendant insurance company. He placed industrial insurance, collected premiums and in the case of the death of the insured policy holders his duties required him to secure the proofs of death, forwarding such proofs to the defendant at its home office in New Jersey, for which proofs in due time checks in payment of the claims would be sent to him to deliver to the respective beneficiaries under the policies. During the period mentioned, between December 29, 1906, and February 18, 1908, the company received 106,250 sets of proofs of death of persons insured, coming from all parts of the United States and Canada. The company also received over 100,000 claims for general obligations which were paid by check. Checks in number amounting to 206,250 were mailed to its agents in different parts of the United States and Canada, of which 106,250, payable to claimants, were sent to assistant superintendents for delivery to the claimants in payment of death claims. Bayliss presented to the plaintiff during the period in question, on nineteen different occasions, checks drawn by the defendant, all of which checks were cashed by the plaintiff and the amount of the checks, aggregating $5,541.57, was credited by the plaintiff bank to the personal account of Bayliss. The bank sometimes paid part of each check to him in cash and Misc.] Supreme Court, January, 1918. at other times gave him credit for the full amount thereof. Each one of these nineteen checks bore a forged indorsement made by Bayliss of the payee's name. The plaintiff now holds and owns these checks and seeks to recover the aggregate amount thereof, evidently upon the theory that the money stolen by Bayliss from the bank was the act of an assistant superintendent of the defendant and that therefore the defendant should make good the amount of said checks to the bank. The bank seemed to have made no effort to learn whether or not the indorsements of the payees' names were original and genuine. The bank purchased the checks, placing the amount thereof to the credit personally of Bayliss, evidently assuming the indorsements to be genuine upon Bayliss' indorsement of the checks under the forged names of the payees. This was true save in reference to three particular checks aggregating $1,272.99, which checks were as follows: Patrick Murtaugh....July 11, 1907.... $258 81 Margaret Burns.....February 14, 1908. 514 18 Bridget Murtaugh... February 17, 1908.... 500 00 In each of which cases, the payee named in the check, apparently not being able to write, the indorsement was made with a mark, Bayliss placing his name on the back of the check merely as a witness, not as an indorser. Fifteen of the checks cashed by the plaintiff and placed to the personal credit of Bayliss were issued by the defendant upon forged proofs of the alleged death of persons insured by the defendant but who had not died. Four of the nineteen checks were issued by defendant after the actual death, and receipt of due and Supreme Court, January, 1918. [Vol. 102. proper proofs of death, of the persons upon whose lives defendant had issued policies. Of these four checks last mentioned Bayliss forged the indorsements of the payees and obtained personally the proceeds thereof. Each of the nineteen checks was sent to Bayliss to deliver to the payee named. He delivered no one of the checks but forged the name of each payee named and indorsed his own name, or witnessed the making of a mark, thus stealing from the bank the money represented by the checks. Bayliss' method with reference to the fifteen checks issued upon forged proofs of death was thorough and comprehensive to say the least. In these fifteen cases where checks were issued upon forged proofs of death there had been issued to each one of the parties named a policy upon the life of a person living, premiums had been paid upon the policy for a certain time, after which, desiring to cancel the policy, it was surrendered to Bayliss, representing the company. Bayliss paid to these insured persons a small amount as a surrender value, thus securing possession of the policies and of the premium receipt books. The insured in each case was alive. When the policies and premium receipt books were surrendered to Bayliss for cancellation instead of sending them to the company as surrendered and to be cancelled Bayliss forged fraudulent proofs of death of the insured and forwarded such proofs to the company. These forged proofs of death were accompanied by the original policies, the original premium receipt books, showing payment of premiums to the date of the alleged death. Bayliss furnished to the company: 1. The attending physician's certificate giving the date and cause of death of the insured. 2. The claimant's certificate stating the relationship Misc.] Supreme Court, January, 1918. to the insured and by what right the amount of the policy is claimed by him. 3. The certificate of identity stating how long he had known the insured, the date of death, and that he had viewed the remains. 4. The certificate of the assistant superintendent, Bayliss, stating the date that he personally viewed the remains. In cases where the amount of insurance exceeded $500 Bayliss furnished additional forged papers as follows: 1. Affidavit of attending physician, purporting to have been sworn to before a notary public. 2. Affidavit of identification by party who had known the insured five years, stating the date of his death and that the party had viewed the remains; this affidavit also purporting to be sworn to before a notary public. 3. Claimant's certificate that she was the wife of the insured. 4. Certificate of the assistant superintendent, Bayliss. certifying that he had personally viewed the remains. 5. Undertaker's certificate of burial. Every one of these papers was a forgery. The sig nature by the notary public, the certificate of the county clerk as to the genuineness of notary's signature, the doctor's, the undertaker's, the friend's, all of them forged. In return for these papers the company forwarded checks in payment of the policy obligations. These checks, made in the names of the respective claimants, the plaintiff cashed and placed to the credit of Bayliss individually. From the amount thus deposited to his credit Bayliss used the money for his own purposes, paying his |