Opinion
December, 1921, Term. Filed February, 1922.
Alexander Appel, for appellant.
Charles H. Studin, for respondent.
The action is brought to recover the amount of a certified check drawn by one Frye, a depositor of the defendant, who stopped payment after certification by the defendant. The complaint alleges that said check was duly indorsed by the payee and delivered for value to one Runkle, by whom it was duly indorsed and delivered for value to plaintiff. The answer sets up that the check was obtained by fraud, the person to whom the check was delivered having represented to the maker that it would be used for the purchase of certain stock and credited to the maker's account with the firm of J.C. Rabiner Co., by whom the person to whom the check was delivered falsely represented that he was employed. Defendant conceded that plaintiff was a bona fide holder from a fictitious payee and indorser. Defendant's evidence convincingly establishes the alleged fraud and that the name of the payee and indorser was fictitious.
A check made to a fictitious payee not known to the maker to be such is not a check to bearer passing upon delivery, and the transferee thereof under a forged indorsement of the name of the fictitious payee made by the impostor who procured the execution of the check is not a holder in due course and hence cannot enforce payment. Neg. Inst. Law, § 42; United Cigar Stores Co. v. American Raw Silk Co., Inc., 184 A.D. 217, 218-222; affd., 229 N.Y. 532, 533; Mercantile National Bank v. Silverman, 148 A.D. 1, 5-7; affd., 210 N.Y. 567; Shipman v. Bank of State of New York, 126 id. 318, 330, 331; National Surety Co. v. National City Bank, 184 A.D. 771, 774-776.
A certified check the indorsement of which is forged may not be enforced. Donahue v. Bank of America, 161 N.Y.S. 232, 233; Graves v. American Exchange Bank, 17 id. 205, 208, 209.
The cases holding that checks paid to fictitious payees who were known to the makers to be fictitious payees or else paid to those to whom the maker intended the payment to be made ( Hartford v. Greenwich Bank, 157 A.D. 448, 451; affd., 215 N.Y. 726, 727; P. G. Card Paper Co. v. Fifth Nat. Bank, 172 N.Y.S. 688, 689) may be enforced are not in point.
Judgment reversed, with thirty dollars costs, and complaint dismissed on the merits, with costs.
GAVEGAN and MULLAN, JJ., concur.
Judgment reversed, with thirty dollars costs, and complaint dismissed on the merits, with costs.