(dissenting). We are here concerned with the right of the plaintiff to recover from the defendant Kline Bros. *473Co., Inc., the amount of a check made by it to the order of Tri Rite Dresses, and cashed by plaintiff. The defendant pleaded that the check was procured by fraud and without consideration; that the plaintiff was not a bona fide holder in due course; denied the alleged signatures of Tri Rite Dresses and one Goodman, allegedly doing business under that name, as indorsees, and demanded that said signatures be proved.
The cause was tried before the court without a jury. The trial justice heard and saw the witnesses. To bis “ sophistication and sagacity” the law confided “ the duty of appraisal. * * * His was- the opportunity, the responsibility and the power to decide.” (Boyd v. Boyd, 252 N. Y. 422, 429.)
The evidence justified a finding of the following facts: Plaintiff conducted a cigar manufacturing business since 1899, which was located where he cashed the check in question since 1909. He also cashed checks as an aid to business, as persons thus accommodated in most instances purchased merchandise. He knew Harry Goodman, whose signature appears on the check as indorsee, since January, 1933. Plaintiff had called at Goodman’s place of business, though he had not seen him there, and Goodman had been to see plaintiff several times.
Prior to cashing the check sued upon, plaintiff had cashed some fifteen other checks of the defendant, all payable to Tri Rite Dresses and indorsed by Goodman. These checks had been dated from January 19 to May 13, 1933. The check sued upon was dated May 24, 1933.
The earlier checks cashed by plaintiff had been honored by the defendant. So far as this record discloses they have never been disputed. Placed in evidence by the defendant they clearly established that the indorsement of Tri Rite Dresses by Goodman was in the same handwriting as the indorsement on the check here sued upon. No evidence was offered by defendant to show either prior or present improper indorsement.
On May 24, 1933, Goodman called plaintiff on the telephone. As a result one Ferrara came to plaintiff’s place of business with the check sued upon, indorsed by Tri Rite Dresses through Goodman. After deducting the amount of a small purchase, the plaintiff gave Ferrara his own check for the balance of defendant’s check. Goodman had been introduced to plaintiff by Ferrara, or his brother, and the other checks cashed had been presented by Ferrara.
The record fails to show that the plaintiff had any knowledge of the manner in which the defendant had been induced to sign any of the checks in question. The court was, therefore, justified in finding, in addition to the facts above detailed, that plaintiff *474had no knowledge, actual or implied, that this check, or the other checks mentioned, had been procured from the defendant through the fraudulent representation of its employee Aranow, that they were in payment of past due accounts. Aranow, though a witness for the defendant, did not implicate plaintiff. As between the parties, therefore, both were innocent. Equitably it is not unjust to hold (if legally sustainable) that defendant, whose acts permitted the fraudulent scheme to be continued in operation, should be made to shoulder the resultant loss.
We are of the opinion that the evidence here detailed was sufficient to justify a recovery by the plaintiff. He sufficiently proved the indorsement of the payee. The fifteen other checks produced by the defendant show that without objection it paid on an exactly similar indorsement. As already noted, defendant offered no proof that any of the checks were not properly indorsed.
The question of a fictitious payee is not here presented. The payee Goodman really existed and was using the name Tri Bite Dresses. Defendant was deceived as to its indebtedness to the payee, rather than as to his identity.
The plaintiff, therefore, having shown that he parted with value for the check sued upon; that he was without actual or constructive knowledge of the fraud which induced its issue; and having proved the indorsement of the payee, was entitled to judgment.
It follows, therefore, that the determination of the Appellate Term should be affirmed, with costs.
Merrell, J., concurs.
Determination appealed from and judgment of the Municipal Court reversed and judgment directed in favor of the defendant, appellant, dismissing the complaint upon the merits, with costs in all courts.