This is an action on an assigned claim of the Great Atlantic and Pacific Tea Company, a corporation having its principal office and place of business in Jersey City, 1ST. J., to recover the balance of its deposit and drawing account with the defendant. The defendant charged the account of the plaintiff’s assignor with five checks, aggregating $8,060.50, drawn by it payable to the order of James Wilson. The plaintiff’s assignor contested the right of the bank to charge these checks to its account, and that is the question presented by the action.
Although counsel for the plaintiff moved for a direction of a verdict at the close of the evidence, on that motion being denied, he saved the rights of his client with respect to having the jury pass upon the controverted evidence by requesting leave to go to the jury on certain issues stated and on all controverted points before the court directed the verdict on the defendant’s motion.
The question presented by the appeal is, therefore, whether as matter of law the defendant was warranted in charging said checks to the account of the plaintiff’s assignor. The uncontroverted evidence shows that the plaintiff’s assignor was induced by the fraud of one Edward Rypinski, who was in its employ in the auditing department and had special charge of receiving and checking up and verifying bills for goods purchased for a so-called premium department, to draw the checks *453in question on the false representations that James Wilson was engaged in business at room 1012 Fuller Building, Hew York city, and had sold and delivered to the tea company merchandise, upon which it became indebted to him in the amounts of the checks; that said Rypinski, with a view to enabling him to consummate the fraud, had prepared printed billheads in the name of said Wilson with said address, upon which he falsely filled out accounts showing his employer to be indebted to Wilson, and attached to each a slip stating that checks should be forwarded to Wilson at post office box 12, station G, Hew York city, and then O.K.’d the bills and placed them with other bills to be paid, and in the ordinary course of business the cashier of the company drew checks for the amounts of the bills payable to Wilson and the checks were mailed as directed on said slip; that said Rypinski, with a view to enabling him to receive the checks so mailed, hired the box in the post office under the name of James Wilson, for which he signed an application in writing, falsely representing himself to be James Wilson; that on thus receiving his first check, he called at the bank accompanied by his brother George, whose wife, who was known as Jeannette Friedman and did business under the name of the Jeannette Company, had a deposit account with the bank, and George Rypinski introduced himself to Mr. Austin, the vice-president of the bank, to whom he was not known, as George Friedman, the husband of .Jeannette Friedman, and thereupon introduced his brother Edward to Mr. Austin as James Wilson, and the latter was then permitted to open an account under the name James Wilson, by depositing to his credit the first of these checks, which was for $1,543.50, which he indorsed “James Wilson,” the name of the payee of the check, and that the other checks were obtained and deposited in the same manner, and all were charged to the account of the tea company and the proceeds deposited to the account of James Wilson, and subsequently drawn out by Edward Rypinski.
It is contended by the learned counsel for the respondent that the plaintiff’s assignor, although deceived by its employee, intended to draw the checks to the order of James Wilson, and *454intended that they should be paid to the person represented by its employee as bearing that name, who he falsely represented had sold and delivered merchandise to it, and that, therefore, the checks were properly paid by the bank. There is a fallacy in this reasoning. The plaintiff’s assignor was fraudulently deceived into believing that Wilson had sold and delivered to it merchandise, and was entitled to be paid therefor the amounts for which the checks were drawn, and it did not intend to draw the checks, or to have them paid, to Edward Rypinski. Although the latter, by the representations which he made, intended himself as the vendor of the merchandise, and as the person entitled to receive pay therefor, and, in the name of Wilson, prepared the billheads and presented the accounts, and rented the post office box, and opened the bank account, and contemplated opening a mail order business for the sale of rugs under that name, still Wilson, so far as the plaintiff’s assignor is concerned, on these facts was a fictitious person, and Rypinski’s indorsement of the name of the payee was a forgery and did not justify the bank in paying the checks. (,Shipman v. Bank S. N. Y., 126 IN'. Y. 318.) The rule that a check payable to a fictitious payee is deemed payable to bearer has no application where the drawer of the checks is not aware that the payee is fictitious. (Shipman v. Bank S. N. Y., supra.)
Although it seems a harsh rule with respect to the liability of the bank, it is now the well-settled law in this jurisdiction, based on the requirements of our business methods, that the intention of the drawer of a check or draft with respect to the payee is controlling; and that indorsees, transferees and the drawee, even though all due care be exercised and the. check or draft be received from one lawfully bearing precisely the same name as that of the payee, take or pay it at their peril, unless the circumstances are such that the drawer is estopped from questioning their title or the payment; and they must depend for protection from such liability on the financial responsibility of the person from whom they receive it and the other parties to it. (Graves v. American Exchange Bank, 17 N. Y. 205; Gallo v. Brooklyn Savings Bank, 199 id. 226; Mercantile National Bank v. Silverman, 148 App. Div. 1.)
*455In Gallo v. Brooklyn Savings Bank (supra) the drawer, a savings bank, accepted the surrender of a pass book of one of its depositors for settlement of the account from his nephew, who had stolen it and represented that he was the depositor. The bank discovered that his age did not correspond with that given when the account was opened, and he then represented that his uncle, who had opened the account for him, had evidently given his own age. The bank was not satisfied with his identity and for that reason, instead of giving him the balance of the account in money, gave him a check on another bank. His Christian name was not the same as that of his uncle, who was the depositor, but he had been known by the same given name, to some extent, and he succeeded in having the check cashed. The drawee honored the check, and on discovering that the original indorser was not the payee intended, it recovered of the bank to whom it made the payment, and that bank in turn recovered of its depositor who had been fraudulently induced to cash it for the impostor, and he then sued the drawer and contended, among other things, that having dealt with the impostor as its depositor and having delivered the check to him, it was estopped from denying that he was; but the court held otherwise and ruled that notwithstanding what took place, the drawer did not intend to make him the payee unless he was in fact its depositor.
In Mercantile National Bank v. Silverman (supra) we held that, although a drawer of checks, who had been induced to make loans on forged salary vouchers on false representations made by letter to the effect that the applicants therefor were army officers, sent the checks by mail to the impostor under the assumed name of one of the officers, he did not intend the persons to whom he sent the checks as the payees unless they were in fact such army officers, and that the drawee was not authorized to honor the checks and to charge them to his account. • In that case, as in this, the checks could not have fallen into the hands of the impostor but for the violation of the United States Post Office regulations, and could not have been collected without the commission of the crime of forgery. Since plaintiff’s assignor did not intend to make its employee Rypinski the payee of the check under the name Wilson, by *456which it did not know him, and on the rule that the payee is the party intended as such by the drawer, it cannot be held that Rypinski was the payee.
The case of Sherman v. Corn Exchange Bank (91 App. Div. 84) is distinguishable upon the ground that there the check was drawn in payment for horses purchased and he was the payee intended who received and indorsed the check, and it was held that he misrepresented his identity although not his name, and that if it had not been supposed that he was the Baldwin he represented himself to be the purchase would not have been made, was no defense to an action on the check, by a bona fide holder for value, against the drawer.
The decision in First National Bank v. American Exchange Nat. Bank (170 N. Y. 88) is likewise distinguishable in that the bank which drew the draft intended its principal, who resided at a distant point, as the payee and transmitted the draft by mail to its principal as the proceeds of a loan which he had negotiated on premises in the vicinity of the bank on false representations with respect to his title to the effect that he was the owner, and the forged bond and mortgage had been forwarded by him to the bank for delivery. and to remit the proceeds.
As there is no evidence conclusively establishing negligence on the part of the depositor, who was cunningly defrauded by its employee, and there is no evidence estopping it, as matter of law, from questioning the right of the bank to charge the checks to its account, the learned court erred in directing a verdict for the defendant.
I, therefore, vote to reverse the order and judgment and grant a new trial.
Ingraham, P. J., concurred.
Judgment and order affirmed, with costs, on compliance with conditions stated in opinion. Order to be" settled on notice.