McLaughlin, J.:
•In March, 1899, the, plaintiff had certain negotiations with one Grow, who represented himself to be the attorney for one Amasa Clarke, one :of the executors of the Sturtevant éstate. These negotiations finally resulted in an agreement between Grow and the plaintiff, in which the former, representing himself attorney “ for the executors of the Sturtevant’s estates for the sale of the Sturtevant Hotel in the City of New York,” agreed to sell to the latter the Sturtevant Hotel with certain personal property for $1,500,000, of - which $2,500 was to be paid at the execution of the agreement and the balance in sixty days thereafter when title to the property contracted to be sold was to pass.’ On the day the agreement was signed plaintiff -borrowed from one Cunningham $3,000, for which he gave his promissory note. The money borrowed was paid by two checks, one for $500, payable to the plaintiff’s order, and the other for $2,500, to the order of “ Amasa Clarke, Extr.,” which, at plaintiff’s direction, was delivered to Grow. The $2,500 check was, on that day or the day following, sent by Grow to Clarke at Boston, Mass. Upon its receipt, Clarke returned the same to Grow, just why does not appear, but upon the trial Clarke testified, and his testimony was - uncontradicted, that Grow never acted as his attorney ; never was authorized to sell the Sturtevant House property, or enter into any contract for that purpose, and that he never knew he made such a contract until some time in 1902, when plaintiff sought to obtain from him the amount of the check. After the check had been "returned by Clarke to Grow he delivered it (bearing the indorsements “ Amasa Clarke, Extr.” and his own) to one Bisley, whom he requested to advance the money thereon, which he did, after having the check certified by the defendant. The - check was subsequently paid by the Irving National Bank and on the sixth of May following paid by the defendant through the clearing ' house.
The indorsement “ Amasa Clarke, Extr.” was a forgery and the plaintiff as the assignee of Cunningham brought this action to recover the amount of the check, upom the ground that the same was not paid to the order of the payee therein named. At the conclusion of the trial the court directed a verdict for the plaintiff for the full amount claimed, together with interest, and from the judg[238]*238ment entered thereon,, as well as from an order denying a motion for a new trial, defendant has appealed. '
The relation existing between a bank and a depositor is that of debtor and creditor, from which relation there is implied a contract on the part of the bank to disburse the moneys- standing to the depositor’s credit only upon his order and in conformity with his directions, and a payment cannot be charged against the depositor’s account unless he has actually directed such payment to be made. (Critten v. Chemical National Bank, 171 N. Y. 219.) Payments made upon forged indorsements are at the peril of the bank unless it can claim protection Upon some principle of estoppel or by reason of-some negligent, act chargeable to the depositor. (Shipman v. Bank of State of N Y. 126 N. Y. 318.) This follows from the implied contract which exists between a bank and a depositor. The-drawer of a check is not. presumed to know, and as a matter of fact seldom does know, the signature of the payee.' The bank has the opportunity to ascertain whether or not an indorsement is genuine, and if it doés not do so before making the payment, then if. the indorsement is not genuine it must; stand the loss.
But it is urged -that inasmuch as plaintiff sues as the assignee of Cunningham he has failed to establish a cause of action, becauseCunniñgham has sustained rio loss. I am uriable to see the force of ' this claim, nor do I think if follows that Cunningham, because he holds the promissory note'of' Kearny, has sustained'no loss. •• TJpon receiving the- check in question and the other one for $500, it is true plaintiff gave his proinissory note for the amount . represented thereby, which has not be'en paid.- Plaintiff is obligated to pay it, t and if he does not get the benefit of the check for $2,500, then there has beeri a failure of consideration for the note to this extent.
Even if the checks were taken by the plaintiff as and for cash, that circumstance does not'relieve Cunningham from his legal obligation as drawer, and while it may be conceded that he has done his duty and it is through no fault of his that Kearny ’ did not get his money, if the check were collected upon a forged indorsement, that does.not furnish a sufficient reason why the loss should remain upon Kearny instead of lipón Cunningham. The check was received as a consideration for the note only in consideration of Cunningham’s legal obligation as drawer and of Kearny’s • right as holder, which / [239]*239included the right of recourse to Cunningham if, upon proper indorsement and due demand, the check’should not be paid by the drawee. (Shepard & Morse Lumber Co. v. Eldridge, 171 Mass. 516.)
In Thomson v. Bank of British North America (82 N. Y. 1) it was held that where a debtor pays his debt by a check to the order of his creditor or one designated by the latter, and the check is lost by or fraudulently obtained from the creditor and is paid to the finder or fraudulent holder on a forged indorsement of the payee, the debtor is not discharged, and may be again called upon to pay the debt, “ unless in some very special case, if such a case can be supposed, where the check was taken in absolute payment and extinguishment of the debt.”
It is also urged that the recovery cannot be sustained because . Cunningham was guilty of negligence in not discovering the forgery when the check was returned to him. The check was returned on the 6th of October, 1899. Just how he could then have ascertained that the indorsement of Clarke was a forgery is not suggested, nor were any facts presented from which the jury would have been justified in finding that he could have ascertained that fact until the plaintiff was informed by Clarke that he had never used the check. When a bank returns a check to a depositor, ás evidence of payment made by his direction, the depositor has a right to assume that the bank has ascertained the indorsements thereon to be genuine and that no payments have been made except such as are authorized. (Shipman v. Bank of State of N. Y., supra.) But even if it be conceded that he was negligent in this respect, it does not aid the appellant, because it does not appear that the bank was injured in any way by it. If it were injured* then it was for the defendant to show it, and it not only failed to so, but the evidence establishes that it paid the check on the 6th of. May, 1899, á little over a month after it was drawn and several months before it was returned to Cunningham. Not only this, but it seems from the position which it took when plaintiff made his claim that the payment was made upon the strength of the indorsement of the Irving National Batik, a prior indorser, and which guaranteed, so far as defendent was concerned, all indorsements then thereon. This is apparent from its refusal to pay unless the Irving National Bank would agree to reimburse it.
[240]*240• Stress is also laid upon the fact that the action was not commenced until after the -death, of Grow, which occurred in 1902.
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McLaughlin, J.:
•In March, 1899, the, plaintiff had certain negotiations with one Grow, who represented himself to be the attorney for one Amasa Clarke, one :of the executors of the Sturtevant éstate. These negotiations finally resulted in an agreement between Grow and the plaintiff, in which the former, representing himself attorney “ for the executors of the Sturtevant’s estates for the sale of the Sturtevant Hotel in the City of New York,” agreed to sell to the latter the Sturtevant Hotel with certain personal property for $1,500,000, of - which $2,500 was to be paid at the execution of the agreement and the balance in sixty days thereafter when title to the property contracted to be sold was to pass.’ On the day the agreement was signed plaintiff -borrowed from one Cunningham $3,000, for which he gave his promissory note. The money borrowed was paid by two checks, one for $500, payable to the plaintiff’s order, and the other for $2,500, to the order of “ Amasa Clarke, Extr.,” which, at plaintiff’s direction, was delivered to Grow. The $2,500 check was, on that day or the day following, sent by Grow to Clarke at Boston, Mass. Upon its receipt, Clarke returned the same to Grow, just why does not appear, but upon the trial Clarke testified, and his testimony was - uncontradicted, that Grow never acted as his attorney ; never was authorized to sell the Sturtevant House property, or enter into any contract for that purpose, and that he never knew he made such a contract until some time in 1902, when plaintiff sought to obtain from him the amount of the check. After the check had been "returned by Clarke to Grow he delivered it (bearing the indorsements “ Amasa Clarke, Extr.” and his own) to one Bisley, whom he requested to advance the money thereon, which he did, after having the check certified by the defendant. The - check was subsequently paid by the Irving National Bank and on the sixth of May following paid by the defendant through the clearing ' house.
The indorsement “ Amasa Clarke, Extr.” was a forgery and the plaintiff as the assignee of Cunningham brought this action to recover the amount of the check, upom the ground that the same was not paid to the order of the payee therein named. At the conclusion of the trial the court directed a verdict for the plaintiff for the full amount claimed, together with interest, and from the judg[238]*238ment entered thereon,, as well as from an order denying a motion for a new trial, defendant has appealed. '
The relation existing between a bank and a depositor is that of debtor and creditor, from which relation there is implied a contract on the part of the bank to disburse the moneys- standing to the depositor’s credit only upon his order and in conformity with his directions, and a payment cannot be charged against the depositor’s account unless he has actually directed such payment to be made. (Critten v. Chemical National Bank, 171 N. Y. 219.) Payments made upon forged indorsements are at the peril of the bank unless it can claim protection Upon some principle of estoppel or by reason of-some negligent, act chargeable to the depositor. (Shipman v. Bank of State of N Y. 126 N. Y. 318.) This follows from the implied contract which exists between a bank and a depositor. The-drawer of a check is not. presumed to know, and as a matter of fact seldom does know, the signature of the payee.' The bank has the opportunity to ascertain whether or not an indorsement is genuine, and if it doés not do so before making the payment, then if. the indorsement is not genuine it must; stand the loss.
But it is urged -that inasmuch as plaintiff sues as the assignee of Cunningham he has failed to establish a cause of action, becauseCunniñgham has sustained rio loss. I am uriable to see the force of ' this claim, nor do I think if follows that Cunningham, because he holds the promissory note'of' Kearny, has sustained'no loss. •• TJpon receiving the- check in question and the other one for $500, it is true plaintiff gave his proinissory note for the amount . represented thereby, which has not be'en paid.- Plaintiff is obligated to pay it, t and if he does not get the benefit of the check for $2,500, then there has beeri a failure of consideration for the note to this extent.
Even if the checks were taken by the plaintiff as and for cash, that circumstance does not'relieve Cunningham from his legal obligation as drawer, and while it may be conceded that he has done his duty and it is through no fault of his that Kearny ’ did not get his money, if the check were collected upon a forged indorsement, that does.not furnish a sufficient reason why the loss should remain upon Kearny instead of lipón Cunningham. The check was received as a consideration for the note only in consideration of Cunningham’s legal obligation as drawer and of Kearny’s • right as holder, which / [239]*239included the right of recourse to Cunningham if, upon proper indorsement and due demand, the check’should not be paid by the drawee. (Shepard & Morse Lumber Co. v. Eldridge, 171 Mass. 516.)
In Thomson v. Bank of British North America (82 N. Y. 1) it was held that where a debtor pays his debt by a check to the order of his creditor or one designated by the latter, and the check is lost by or fraudulently obtained from the creditor and is paid to the finder or fraudulent holder on a forged indorsement of the payee, the debtor is not discharged, and may be again called upon to pay the debt, “ unless in some very special case, if such a case can be supposed, where the check was taken in absolute payment and extinguishment of the debt.”
It is also urged that the recovery cannot be sustained because . Cunningham was guilty of negligence in not discovering the forgery when the check was returned to him. The check was returned on the 6th of October, 1899. Just how he could then have ascertained that the indorsement of Clarke was a forgery is not suggested, nor were any facts presented from which the jury would have been justified in finding that he could have ascertained that fact until the plaintiff was informed by Clarke that he had never used the check. When a bank returns a check to a depositor, ás evidence of payment made by his direction, the depositor has a right to assume that the bank has ascertained the indorsements thereon to be genuine and that no payments have been made except such as are authorized. (Shipman v. Bank of State of N. Y., supra.) But even if it be conceded that he was negligent in this respect, it does not aid the appellant, because it does not appear that the bank was injured in any way by it. If it were injured* then it was for the defendant to show it, and it not only failed to so, but the evidence establishes that it paid the check on the 6th of. May, 1899, á little over a month after it was drawn and several months before it was returned to Cunningham. Not only this, but it seems from the position which it took when plaintiff made his claim that the payment was made upon the strength of the indorsement of the Irving National Batik, a prior indorser, and which guaranteed, so far as defendent was concerned, all indorsements then thereon. This is apparent from its refusal to pay unless the Irving National Bank would agree to reimburse it.
[240]*240• Stress is also laid upon the fact that the action was not commenced until after the -death, of Grow, which occurred in 1902. But in this connection it should be borne in mind that the testimony tended to zshow that the plaintiff did not discover until about this time that the, indorsement of Clarke was a forgery ; that he liad been informed by Grow that Clarke was in Europe, and lie had put him off from, time to time with one excuse and another until near Grow’s death, when'the plaintiff finally had an interview with Clarke, and then ■ ascertained for the first time that lie had never used the check, and the indorsement of his name thereon was a forgery.
Finally it is urged that the action cannot be maintained because there was a failure to tender the check to the defendant before the ■ commencement of the action. It appeared that the attorney for ‘ the plaintiff took the check to an executive officer of the defendant, showed it to him and told him what he wunted ; that this officer
without raising any objection whatever on the subject of the tender, referred the attorney to the defendant’s counsel, and from this I think a’ tender can be inferred. (Lawrence v. Miller, 86 N. Y. 131.) This; certainly, taken in connection with the letter from the defendant’s counsel to the effect that the defendant- refused to pay the claim unless the Irving National Bank would agree to reimburse it t— which it had not done—r was sufficient. The-defendant denied liability, "payment of the amount claimed was refused, and, therefore, any further tender than that which was made was waived. (Baumann v. Pinckney, 118 N. Y. 604 ; Currie v. White, 45 id. 822.)
The judgment is right, and if and the order appealed from should • be affirmed, with costs.
O’Brien, , P. J., Patterson, Laughlin and Houghton, JJ., concurred.
Judgment and order affirmed, with, costs.