United Cigar Stores Co. v. American Raw Silk Co.

Headnote

Bills, notes and checks — check obtained by fraud and payable to fictitious person —r stoppage of payment — when drawer not liable to one who cashes check on forged indorsement.

United Cigar Stores Co. v. American Raw Silk Co., Inc., 184 App. Div. 217 , affirmed.

Appeal, by permission, from a judgment, entered August 1, 1918, upon an order of the Appellate Division of the Supreme Court in the first judicial department, reversing a determination of the Appellate Term which

affirmed a judgment of the Municipal Court of the city of New York in favor of plaintiff and directing a dismissal of the complaint. ‘ A man representing himself as Lieutenant Peterson of the United States navy applied to the defendant for moneys for the establishment and maintenance of a navy tuberculosis, camp. He stated that he represented Lieutenant R. L. Parks, Q. M., United States navy. The defendant gave a check for $100 to the order of Lieutenant R. L. Parks, Q. M., United States navy.' The defendant then gave the check to Peterson with specific instructions to deliver it to Parks for the purpose of being used as a donation to the fund. It turned out that there was no such person as Lieutenant R. L. .Parks; that there was no tuberculosis camp fund; that the man “ Peterson ” was an impostor. “ Peterson ” procured* the check to be cashed by the plaintiff, the United Cigar Stores Company, claiming to be a representative of Parks, after having indorsed “ Parks’ ” name thereupon. Defendant, having discovered the fraud, stopped payment at the bank and this action was brought to recover the amount paid on the check.