Plaintiff had a deposit account with the defendant bank. She informed the cashier that she wished to make a draft for $1,100, payable to one Homer E. Remsen, to whom she was to loan the money on bond and mortgage. The cashier told her to make the draft to her own order, and to indorse it to the order of Remsen. She brought the draft thus indorsed to one Bushnell, a lawyer. Bushnell gave her in return a bond, signed, as it seemed, by Homer E. Remsen and Alice, his wife; exhibited a mortgage signed in the same way; and made out a certificate that the mortgagors were the owners of the mortgaged property, free from all incumbrances. In truth, there were no such persons. The owner was Bushnell, and his supposed clients were fictitious. He told the plaintiff that he had once been the owner of the property, but that he had sold it two years before to Remsen, and owned it no longer. The draft was paid by the bank upon the indorsement of the attorney in the name of the fictitious client. His suicide a few days afterwards laid bare his crime. The plaintiff notified the bank that the draft had been paid without right, and sued to recover the money charged to her account. The Trial Term gave judgment in her favor. The Appellate Division reversed and granted a new trial. An appeal to this court followed.
We think the appeal must be sustained. The defendant was without authority to disburse the plaintiff's money except in accordance with her orders. It acted at its peril if it paid upon a forged indorsement (Shipman v. Bank of State of N.Y.,126 N.Y. 318). It did pay upon such an indorsement, and must answer for the consequences. A different case would be here if the plaintiff had dealt with Bushnell in the belief that he was Remsen, intending to make payment to the person then before her, though lured *Page 71 into that intention by his assumption of a fictitious name. In such circumstances, nice distinctions would have to be drawn to determine whether the crime was forgery or something else (Phelps v. McQuade, 220 N.Y. 232; Mercantile Nat. Bank ofthe City of N.Y. v. Silverman, 148 App. Div. 1; affd., on opinion below, 210 N.Y. 567; First Nat. Bank v. Am. Ex. Nat.Bank, 170 N.Y. 88; 3 Williston on Contracts, § 1517). That is not what happened. The plaintiff did not intend to deal with Bushnell, either under that name or any other. She did not know Remsen, who was represented to be the owner, but she knew that he was not Bushnell, for Bushnell so informed her. He told her, as we have seen, that the property had once been his, but that he had parted with his ownership. In these circumstances, the crime of forgery was committed when he signed the names of Homer and Alice Remsen to the bond which charged them with the debt (United Cigar Stores Co. v. American Raw Silk Co., Inc.,184 App. Div. 217; affd., 229 N.Y. 532; Nat. Surety Co. v. Nat.City Bank, 184 App. Div. 771; Mercantile Nat. Bank v.Silverman, supra; Phelps v. McQuade, supra). The crime was committed again when he signed their names to the mortgage, adding a certificate of acknowledgment in the name of a fictitious notary. It was committed once again upon his indorsement of the check. What he did was not the less a forgery because it has turned out in the end that the borrower was a myth (Shipman v. Bank of State of N.Y., supra; Seaboard Nat. Bank v. Bank of America, 193 N.Y. 26; United Cigar Stores Co. v.American Raw Silk Co., Inc., supra; People v. Browne,118 App. Div. 793, 799; Penal Law, § 883; Cons. Laws, ch. 40). The myth did not exist with the consent or knowledge of the lender (Neg. Inst. Law [Cons. Laws, ch. 38], § 28).
The argument is made that the bank acted within its rights when it paid the check to Bushnell, because Bushnell was in truth the owner of the mortgaged land. The *Page 72 record does not tell us whether his title was unincumbered, but ownership, though absolute, would not change the nature of his crime. The plaintiff did not loan her money to Bushnell, content to accept him as a borrower. He of all men was excluded. She loaned it upon the bond of Homer and Alice Remsen, with a mortgage as collateral. Undoubtedly, she believed, when she drew her check upon the bank, that Remsen was an owner of the property, and that the mortgage was a valid lien. This belief did not mean that some one else who had been expressly excluded as a borrower, had the right, because he was the owner, to step into the borrower's shoes. Remsen, if a real person, might have indorsed the draft without liability as a forger, however fraudulent the statement that he was the owner of the land (Phelps v. McQuade, supra). Bushnell, having asserted that the borrower was some one other than himself, was not at liberty to indorse, whether he was the owner of the land or not. No doubt there are border cases where the line is hard to draw between the impostor who appropriates what is intended for another, and the impostor who deceives by misrepresenting his responsibility or character. We have an illustration in Hartford v. GreenwichBank of City of N.Y. (157 App. Div. 448; 215 N.Y. 726), a case which later opinions have said is not to be extended (UnitedCigar Stores Co. v. American Raw Silk Co., Inc., supra; Nat.Surety Co. v. Nat. City Bank of Brooklyn, 184 App. Div. 771). In the case at hand the line of division is reasonably clear. The plaintiff had no thought that she was accepting Bushnell's bond. The maker of the bond was to be the holder of the check.
The order of the Appellate Division should be reversed, and the judgment of the Trial Term affirmed, with costs in this court and in the Appellate Division.