Opinion
December 5, 1989
Appeal from the Supreme Court, First Department (Jawn A. Sandifer, Stanley Parness and Edith Miller, JJ.).
In this action, plaintiff sought to recover $26,911.40 paid by plaintiff to defendant-appellant on 79 payroll checks with forged endorsements. The forged checks were payable to 79 terminated employees of plaintiff, endorsed by defendant Caplan and cashed by appellant 11 Stone Street.
Both the Civil Court and Appellant Term agreed that appellant breached its warranty of good title (UCC 3-417 [a]) when it obtained payment from plaintiff. While appellant attempts to invoke the "fictitious payee" doctrine (UCC 3-405 [c]), the doctrine is inapplicable since appellant did not take the checks in good faith. (Underpinning Found. Constructors v Chase Manhattan Bank, 46 N.Y.2d 459; and see, Savings Banks Trust Co. v Federal Reserve Bank, 738 F.2d 573 [2d Cir 1984].) The record demonstrates that appellant was careless and negligent in its conduct and thus is liable to plaintiff for the value of the checks. We have considered appellant's other claims and do not find them to be persuasive.
Concur — Murphy, P.J., Sullivan, Kassal, Wallach and Smith, JJ.