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Michael Duff's estate, and entirely apart from the powers given him by Michael Duff's will he had the right to devise this reversion.

It follows that the will should be regarded rather as the disposition of his own estate than the attempted execution of a power given him under his father's will. Since John J. Duff's will should not be construed as the execution of a power conferred by the will of Michael Duff, any suspension of the power of alienation created by the will of John J. Duff does not date back to the creation of the power. Michael Duff's will did not contravene the statute, and since the will of John J. Duff devises an estate which he always possessed, his will creates a new future estate in his own property, and that future estate is valid because, standing alone, it does not suspend the power of alienation for more than one life. In other words, since John J. Duff had an estate which he could freely alienate, he has not suspended the power of alienation for more than one life by devising his own freely alienable estate in trust for one life or even two lives. The mere fact that this new estate follows immediately upon a previous trust estate for two lives does not alter the rule, for the new estate does not continue the earlier trust. It constitutes a new and independent suspension of the power of alienation, which is not in contravention of the statute. See Livingston v. New York Life Ins. & Trust Co., 13 N. Y. Supp. 105,1 affirmed on second appeal sub nomine McCurdy v. New York Life Ins. & Trust Co., on opinion on previous appeal, 83 Hun, 612, 31 N. Y. Supp. 1130, affirmed without opinion, 151 N. Y. 667, 46 N. E. 1149.

Judgment accordingly.

1 Reported in full in the New York Supplement; reported as a memorandum decision without opinion in 59 Hun, 622.

(182 N.Y.8.) (191 App. Div. 787)

STRANG v. WESTCHESTER COUNTY NAT. BANK. (Supreme Court, Appellate Division, Second Department. May 14, 1920.) 1. Banks and banking Om 148(2)-Liable for payment on forged indorsement,

unless protected by estoppel.

Payments by a bank on forged indorsement are at the peril of the bank,

unless it can claim protection upon some principle of estoppel. 2. Banks and banking 138Not liable for payment to person intended,

though he used fictitious name.

Where a depositor delivered a draft, payable to one from whom she was to receive a bond and mortgage, to her attorney, who forged the bond and mortgage and the indorsement on the draft, payee thereof being a fictitious person and the property'secured by the mortgage being owned by the attorney, the bank, in paying the draft to the attorney, paid it to

the person intended by the depositor, and is not liable therefor. 3. Banks and banking w148(2)-Representing payee as actual person es

tops depositor.

A request by a depositor to a bank to issue a draft payable to a named person is a representation that the person is real, not fictitious, which binds depositor.

Rich and Putnam, JJ., dissenting.
Appeal from Special Term, Westchester County.

Action by Bessie M. Strang against the Westchester County National Bank. Judgment for plaintiff, and defendant appeals. Reversed, and new trial granted.

Argued before JENKS, P. J., and RICH, PUTNAM, KELLY, and JAYCOX, JJ.

Mark Hyman, of New York City, for appellant.
P. A. Anderson, of Peekskill, for respondent.

KELLY, J. The facts in this case are stated in the opinion of Mr. Justice RICH.

[1] Payments by the bank upon forged indorsements are at the peril of the bank, unless it can claim protection upon some principle of estoppel. This proposition conceded by the appellant, is familiar to all of us. Shipman v. Bank of the State of N. Y., 126 N. Y. 318, 27 N. E. 371, 12 L. R. A. 791, 22 Am. St. Rep. 821. The appellant argues that in the case at bar the check in question was paid to the person to whom the maker (the plaintiff) intended it should be paid, that she desired to pay the money for a bond secured by a mortgage upon certain specific property in Peekskill, that the proceeds of the check went exactly where she intended them to go, and that in return she received the bond and mortgage which she had agreed to take. The appellant cites Judge Scott's opinion in Hartford v. Greenwich Bank, 157 App. Div. 448, 142 N. Y. Supp. 387, affirmed on opinion below 215 N. Y. 726, 109 N. E. 1077. I have some difficulty in distinguishing the case at bar from the reasoning of the court in the case last cited.

(2) Plaintiff had arranged to invest her money upon a bond secured by a mortgage on certain specified property. That property actually belonged to one Bushnell. Bushnell for his own purposes (possibly

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criminal, but I do not see how that affects the question) represented to plaintiff that this particular property was owned by one Homer E. Remsen. We may assume that Remsen was a fictitious person. But Bushnell executed the bond and the mortgage on his own property, in the name of Remsen, and delivered them to the plaintiff. True, she left the papers with him, and he did not record the mortgage; but that was a matter between her and Bushnell, not brought about by anything the bank did.

So, I take it, Bushnell would not be heard to deny the validity of the bond and mortgage. He signed it in a fictitious name; but he was in no position, as against plaintiff, to dispute its validity. It seems to me the bond was the bond of the owner of the premises, and the mortgage was a lien upon the premises, precisely as if Bushnell had executed it in his own name. He received the check, indorsed by plaintiff to the order of Homer E. Remsen-he forged the name of Remsen, adding his own name--and received the proceeds. seems to me there is much force in the claim that plaintiff suffered no legal loss for which the bank is accountable by reason of the payment to Bushnell.

[3] Again, I think the plaintiff herself brought about her own loss. The defendant bank did not know Homer E. Remsen. The plaintiff personally came to the bank, asserting that Homer E. Remsen was an existent person—that she had agreed to invest her money on his bond and mortgage, and it was on her request that the check was issued and indorsed for her signature, so as to be payable to Homer E. Remsen. I think that she is bound by her representation to the bank that Remsen was a genuine person. This is not a case where some third party-Bushnell, for instance-inserted a fictitious name on the check. The plaintiff did it herself deliberately. It was her own personal action which led to the making of the check payable to Remsen. With the making of the check her personal dealings with the bank ended. That she was thereafter swindled by Bushnell does not seem to me to be chargeable to the bank. Her representation to the bank at the outset seems to me the causa causans of the loss. See Jarvis v. Manhattan Beach Co., 53 Hun, 362, 6 N. Y. Supp. 703; on subsequent appeal, 75 Hun, 100, 26 N. Y. Supp. 1061, affirmed 148 N. Y. 652, 43 N. E. 68, 31 L. R. A. 776, 51 Am. St. Rep. 727; Manhattan Beach Co. v. Harned (C. C.) 27 Fed. 484. In these cases the corporation was held to be estopped by reason of the fact that it issued the stock certificates in the fictitious name and, notwithstanding the fact that the dishonest clerk thereafter transferred them by forging the fictitious name, it was held that the original representation of the company was the cause of the loss. N. Y. & N. H. R. Co. v. Schuyler, 34 N. Y. 30–59; F. A. Bank v. F. S. & G. S. F. R. Co., 137 N. Y. 231, 33 N. E. 378, 19 L. R. A. 331, 33 Am. St. Rep. 712; M. L. Inc. Co. v. F. S. & G. S. F. R. Co., 139 N. Y. 146, 34 N. E. 776; Knox v. Eden Musee Co., 148 N. Y. 441, 42 N. E. 988, 31 L. R. A. 779, 51 Am. St. Rep. 700. Judge O'Brien in the Jarvis Case in the Court of Appeals referred to the similarity between the rule as applied to commercial paper (148 N. Y. 659, 43 N. E. 68, 31 L. R.

(182 N.Y.S.) A. 776, 51 Am. St. Rep. 727), and Judge Barrett in the General Term on the first appeal considered the rule with regard to certificates of stock as analogous with that concerning commercial paper (53 Hun, 365, 6 N. Y. Supp. 703), as did Judge Wallace in the Harned Case.

The judgment should be reversed, and a new trial granted, with costs to abide the event. The findings that the defendant bank did not use due and reasonable care and diligence, and that said defendant was negligent in paying the draft, are reversed as contrary to the evidence.

JENKS, P. J., and JAYCOX, J., concur.

RICH and PUTNAM, JJ., dissent.

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 to only 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 and Alice Remsen, 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. Remsen.

There was no such person as Homer E. Remsen. The lawyer deceived the plaintiff in making the application for the loan, he forged the name of Homer E. Remsen and Alice Remsen to the bond and mortgage, he forged the notary's certificate, and he forged the name of Homer E. Remsen to the draft, presented it to the bank, and was paid the money, to wit, $1,100, and then killed himself. Relying 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 of the State of N. Y., 126 N. Y. 318, 27 N. E. 371, 12 L. R. A. 791, 22 Am. St. Rep. 821), 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 liable, 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. Remsen and Alice Remsen, 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, 142 N. Y. Supp. 387. 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, Room 1012, Fuller Building, New York. He rented a post office box in the name of James Wilson. He opened an account in the defendant bank under the 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 letter heads, 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 "imposter" himself. In the case 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, 171 N. Y. Supp. 480, 482:

“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 of the State of 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.

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