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Supreme Court, January, 1918.

[Vol. 102.

own bills, and there is no evidence in the record that the defendant ever received any of this money from Bayliss.

In the cases where there were claimants upon policies existing, where the insured had died, Bayliss did not deliver the checks to the claimants but forged the names of the payees and the bank purchased these checks.

Bayliss suddenly left Cohoes and the employment of the defendant, was thereafter arrested in California, convicted of the crime of forgery and grand larceny in forging the names of the nineteen payees and in stealing the money represented thereby from the bank, and he served the term of his sentence at Clinton prison.

The indorsement made by Bayliss upon sixteen of the checks where he forged the indorsement of the names of the payees was "Ira J. Bayliss, Asst. Supt.' This indorsement was made after the forged indorsement of the payee.

When he witnessed what pretended to be the signatures of the payees who were not able to write, but who indorsed with a mark, the form of his witnessing was "Witness: Ira J. Bayliss, Asst. Supt."

All of the checks thus indorsed by him were deposited by him either in whole or in part to his individual account. Of the aggregate amount of $5,541.57 the bank credited his account with $4,408.66 and Bayliss was paid personally in cash $1,132.91.

The first of the forged checks was presented to the bank by Bayliss December 29, 1906. Prior to this time the deposits by Bayliss consisted mostly of currency. After that time they were largely checks.

He paid from his account from time to time to his superior, the local superintendent of the company at Troy, moneys which he collected from insurance pre

Misc.]

Supreme Court, January, 1918.

miums, and these payments were always made by him with checks certified by the bank.

The plaintiff claims that because Bayliss indorsed these checks as assistant superintendent, and that the signature of Bayliss on the back of the checks was genuine and the fact that he deposited the proceeds of the checks in his own personal account in which he had been making deposits of collections of premiums, that these circumstances were assurances on which the bank relied in taking the checks and giving Bayliss credit for them to the amount that they did give him credit and in giving him cash in the amount in which they did give him cash.

The contention of the plaintiff is therefore that because Bayliss, who was known as the assistant local superintendent in Cohoes, and who collected premiums which he transmitted to his superior, the local superintendent in Troy, brought to the bank checks made payable evidently to beneficiaries as death claims upon policies, which checks were drawn to the order of a payee whose signature appeared to be upon the back of the check, that therefore the bank had no responsibility when asked to pay cash to Bayliss personally for such check or to deposit the amount of such check to the credit of Bayliss personally, to inquire and to satisfy itself as to the genuineness of the indorsement of the payee named in the check.

The bank was chargeable with reasonable diligence to see that the signatures were not forgeries. There was no duty on the part of the insurance company to look for forged indorsements of the payees of the checks.

The insurance company was not under duty to compare the indorsements on the checks with the genuine signatures of the payees on file in the office. Pruden

Supreme Court, January, 1918.

[Vol. 102.

tial Ins. Co. v. National Bank of Commerce, 177 App. Div. 438.

The first forged check which was presented by Bayliss to the bank for deposit was payable to Mary Poupart for $698. The bank was not obliged to cash the check, and certainly was not obliged to deposit it to the credit of Bayliss personally.

The bank evidently did purchase the check solely upon the responsibility of the indorsement by Bayliss, without ascertaining whether the indorsement of Mary Poupart was genuine.

This same method evidently prevailed with reference to the eighteen other forged checks.

The bank could have taken this paper or not, as it pleased. These checks were taken, as is the general custom and in accordance with the law, relying solely upon the reputed responsibility of the transferers of the paper and its apparent genuineness, and they took it upon that assumption at their peril. Gallo v. Brooklyn Savings Bank, 199 N. Y. 222.

As was said in Shipman v. Bank of State of New York, 126 N. Y. 318, the plaintiff bank in each case took these checks without inquiry as to the genuine ness of the indorsements and relied entirely upon the responsibility of the person presenting the same for payment, and not in reliance upon anything done or forborne except the fact that the checks bore the indorsement of Bayliss.

The defendant had a right to assume that any bank cashing or handling, or passing along the checks which the defendant had issued in payment of claims, would ascertain with reference to the genuineness of any and all indorsements thereon.

The plaintiff in purchasing these checks obtained no right, title or interest in or to the checks; a forged indorsement does not pass a title to commercial paper,

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Supreme Court, January, 1918.

negotiable only by indorsement. Citizens National Bank v. Importers & Traders Bank, 119 N. Y. 195.

In the forgeries committed by Bayliss in making false proofs of death, forging the names of the payees and through such instrumentality stealing the money from the plaintiff, he was not acting as agent of the defendant. Shipman v. Bank, 126 N. Y. 318; Frank v. Chemical National Bank of State of New York, 84 id. 209.

This is not a case where the loss must fall upon the one of two innocent persons who has enabled the third party to do the injury, because the injury was brought about through the instrumentality of a criminal act. Nash v. Moore, 165 App. Div. 67.

The rule is laid down in Critten v. Chemical National Bank, 171 N. Y. 219, that the doctrine of ratification or estoppel has no application when money is stolen from a bank through the bank's contributory negligence.

There is no proof that any of these moneys were paid by Bayliss to his employer. The facts upon the record show that the only moneys paid by Bayliss to the company were premium moneys which Bayliss had actually collected weekly upon policies issued by the company. Such money was received in the usual course of business and in good faith, and for that reason it cannot be pursued by the bank to make good the loss which the bank has sustained through the cashing of the forged checks. Ball v. Shepard, 202

N. Y. 247.

There was no mistake between the parties to this litigation. There was no privity of contract between them. The bank dealt with Bayliss as an individual and only as such. There was no mistake of dealing between the bank and the insurance company. The checks were not payable to bearer; Bayliss forged the

Supreme Court, January, 1918.

[Vol. 102.

indorsements of the payees and the bank upon Bayliss' indorsement purchased each check without ascertaining whether the indorsement was genuine or otherwise.

Findings may be submitted in accordance herewith and upon such findings judgment may be entered dismissing the complaint with costs.

Judgment accordingly.

COUNTY OF SULLIVAN, Plaintiff, v. CORNELIUS E. DOWNIE and GLOBE INDEMNITY COMPANY, Defendants.

(Supreme Court, Sullivan County Trial and Special Term, January,

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1918.)

against superintendent of poor of county-indemnity bondo - contracts — corporations - pleading-evidence - poor.

A superintendent of the poor of a county being indebted from time to time to two corporations, of which he was the agent within his county, would draw an order directing the treasurer of the county to pay to the order of a fictitious person, to whom neither the county nor he was indebted for any service, a certain sum of money out of the poor funds of the county, purporting to be in payment for supplies for the county alms house and would sign the said order, adding the title of the office of superintendent of the poor of the county, and would then indorse the order on the back thereof with the name of the fictitious payee and would forward said order thus indorsed to the said corporations and obtain credit therefor upon his indebtedness, and the said corporations after receiving said order would give the superintendent of poor credit for the same and then indorse said order and present the same to the treasurer of the county, who paid the same. The said superintendent of the poor pursuant to statute had given a bond to the county conditioned that he should perform all the duties incumbent upon him as county superintendent of the poor and honestly account for money coming into his hands as

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