O’BRIEN, J.
The question thus presented is, as stated by the learned trial judge, was the Sumpter bank bound by the act of its cashier in drawing the checks and indorsing them, and putting them in circulation so indorsed? It may serve us in reaching a conclusion upon this question if we first determine what would have been the position of the Sumpter bank, assuming that the checks had been drawn directly to the order of Gumming & Russell, or E. A. Bigelow & Co., or Latham, Alexander & Co., through whom they were presented to the defendant. It was the duty and within the scope of the authority of the cashier to draw bills or checks; and, though ne had drawn them for his own purposes, intending to defraud his bank, no question could arise but that the payment of such checks, properly indorsed, out of the funds of the Sumpter bank in the hands of the defendant, would be a good payment, unless there was something in the transaction tending to put the receiver of the checks upon inquiry. Again, if we assume that the names of the payees subsequently indorsed on the checks were fictitious names, knowingly made by the cashier, and indorsed by him, this would, in effect, be the same as though the bill or check was payable to bearer; and if, as in this case, subsequently indorsed and presented to defendant, and paid out of iunds of the plaintiff, the latter could not compel a repayment. Whether another and different rule is to be applied has been narrowed down to, and necessarily depends upon, the circumstance that the names of the payees wffiich were indorsed on the checks were similar to names borne by customers of the bank. The facts are susceptible, of course, of but one inference,—that at the time these names were inserted by the cashier he had no idea of delivering the checks to them; nor were their names used for any purpose other than to ward off the suspicion which might otherwise arise, or the discovery which might follow an examination by other officers of the bank, if checks were drawn in names that were strange to [257]*257such officers. The purpose in drawing the checks was to place them in the hands of the three firms to whom, after indorsing them, the cashier sent them. In other words, the object of the drawer was to put the drafts in circulation with the names of the payees indorsed upon them; and whether such payees were purely fictitious, or were similar to the names of persons whom the cashier may have known and used, instead of creating new ones, docs not seem to us to change the principle that should be applicable upon the facts presented. As said in Daniel on Negotiable Instruments, (4th Ed., § 140:)
“If the bill or note is payable to some person who has no interest in it. and was not intended to be a party to it. whether such person is or is not known to exist, the payee may be deemed fictitious. ”
And the same author continues:
“But if it be payable to some person known at the time to exist and present to the mind of the drawer when he made it as the part)' to whose order it was to be paid, the genuine indorsement of such payee is necessary in order to a recovery thereon by an indorsee, even though he had no interest in it, and the drawer knew that fact.”
As stated by the learned trial judge:
“Bartlett, as cashier, was authorized to draw the bills. That was within his power. * ** # When he drew the draft, he acted as cashier.”
And again:
“The intent of the cashier was the intent of his bank; that is, so far as the New York bank was concerned.”
That these views are correct must be apparent from a consideration of the relation of the person drawing the checks to the bank, and the principle applicable thereto, which must obtain,—that his act was the act of the bank. Having authority, therefore, to put in circulation the checks, the bank cannot escape liability because, in putting such checks or bills in circulation, with the names of the payees indorsed upon them, he adopted, with a view to allay the suspicion of the bank’s officers, the device of selecting names which were similar to those of persons with whom such officers were acquainted. Much stress is placed by appellant upon the case of Shipman v. Bank, 126 N. Y. 318, 27 N. E. Rep. 371. That was a case of forgeries by a trusted clerk of principals, who delivered to him checks which they had intended to draw to actual payees, but through the fraud and connivance of the clerk were drawn to payees, some of whom were real and some fictitious. It was therein held that negotiable paper, the payee of which does not represent a real person, cannot be treated as payable to bearer, unless the paper was put into circulation by the maker with knowledge that the name of the payee does not represent a real person ; and in the course of the opinion the court says:
“The maker’s intention is the controlling consideration which determines the character of such paper. It cannot be treated as payable to bearer unless the maker knows the payee to be fictitious, and actually intends to make the paper payable to a fictitious person.!’
The distinction thus presented between the two cases, we think, is clear. In the case cited the principals did not put paper in circulation [258]*258with knowledge that the name of the. payee did not represent a real person; whereas, in the case at bar, the bank, through its authorized officer, put in circulation paper, with knowledge on the part of the drawer, and with intent to indorse thereon the names- of payees who, for all intents and purposes, were fictitious payees, adopted and resorted to as a device to avert suspicion. A case which has been frequently referred to, and which we think more like this in principle, is that of Hortsman v. Hens haw, 11 How. 183, which was a case where a bill of exchange had upon it the forged indorsement of the payees, but it had been put into circulation by the drawers with such forged indorsement already upon it, and it was purchased in the market by a bona fide holder, who presented it to the drawee, who accepted and paid it at maturity, and then the drawers failed. In that case it was held that the drawee could not recover back the money which he had paid to the bona fide holder; and the reason, among others stated by the court in the opinion, was that “the bill was put in circulation by the drawers with the names of the payees indorsed upon it; and by doing so they must be understood as affirming that the indorsement is in the handwriting of the payees, or written by their authority. And ■if the drawee had dishonored the bill, the indorser would undoubtedly .have been entitled to recover from the drawers, and the drawers must be equally liable to the acceptor who paid the bill; for, having admitted the handwriting of the pajees, and precluded themselves from disputing it, the bill was paid by the acceptor to the persons authorized to receive the money according to the drawers’ own order. ” And it was further said that the English cases most analogous to this are those in which the names of the drawers or payees were fictitious, and the indorsement written by the maker of the bill. So we say that the cases most analogous to the one at bar, and the principles most nearly applicable, are those involving fictitious drawers and payees.
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O’BRIEN, J.
The question thus presented is, as stated by the learned trial judge, was the Sumpter bank bound by the act of its cashier in drawing the checks and indorsing them, and putting them in circulation so indorsed? It may serve us in reaching a conclusion upon this question if we first determine what would have been the position of the Sumpter bank, assuming that the checks had been drawn directly to the order of Gumming & Russell, or E. A. Bigelow & Co., or Latham, Alexander & Co., through whom they were presented to the defendant. It was the duty and within the scope of the authority of the cashier to draw bills or checks; and, though ne had drawn them for his own purposes, intending to defraud his bank, no question could arise but that the payment of such checks, properly indorsed, out of the funds of the Sumpter bank in the hands of the defendant, would be a good payment, unless there was something in the transaction tending to put the receiver of the checks upon inquiry. Again, if we assume that the names of the payees subsequently indorsed on the checks were fictitious names, knowingly made by the cashier, and indorsed by him, this would, in effect, be the same as though the bill or check was payable to bearer; and if, as in this case, subsequently indorsed and presented to defendant, and paid out of iunds of the plaintiff, the latter could not compel a repayment. Whether another and different rule is to be applied has been narrowed down to, and necessarily depends upon, the circumstance that the names of the payees wffiich were indorsed on the checks were similar to names borne by customers of the bank. The facts are susceptible, of course, of but one inference,—that at the time these names were inserted by the cashier he had no idea of delivering the checks to them; nor were their names used for any purpose other than to ward off the suspicion which might otherwise arise, or the discovery which might follow an examination by other officers of the bank, if checks were drawn in names that were strange to [257]*257such officers. The purpose in drawing the checks was to place them in the hands of the three firms to whom, after indorsing them, the cashier sent them. In other words, the object of the drawer was to put the drafts in circulation with the names of the payees indorsed upon them; and whether such payees were purely fictitious, or were similar to the names of persons whom the cashier may have known and used, instead of creating new ones, docs not seem to us to change the principle that should be applicable upon the facts presented. As said in Daniel on Negotiable Instruments, (4th Ed., § 140:)
“If the bill or note is payable to some person who has no interest in it. and was not intended to be a party to it. whether such person is or is not known to exist, the payee may be deemed fictitious. ”
And the same author continues:
“But if it be payable to some person known at the time to exist and present to the mind of the drawer when he made it as the part)' to whose order it was to be paid, the genuine indorsement of such payee is necessary in order to a recovery thereon by an indorsee, even though he had no interest in it, and the drawer knew that fact.”
As stated by the learned trial judge:
“Bartlett, as cashier, was authorized to draw the bills. That was within his power. * ** # When he drew the draft, he acted as cashier.”
And again:
“The intent of the cashier was the intent of his bank; that is, so far as the New York bank was concerned.”
That these views are correct must be apparent from a consideration of the relation of the person drawing the checks to the bank, and the principle applicable thereto, which must obtain,—that his act was the act of the bank. Having authority, therefore, to put in circulation the checks, the bank cannot escape liability because, in putting such checks or bills in circulation, with the names of the payees indorsed upon them, he adopted, with a view to allay the suspicion of the bank’s officers, the device of selecting names which were similar to those of persons with whom such officers were acquainted. Much stress is placed by appellant upon the case of Shipman v. Bank, 126 N. Y. 318, 27 N. E. Rep. 371. That was a case of forgeries by a trusted clerk of principals, who delivered to him checks which they had intended to draw to actual payees, but through the fraud and connivance of the clerk were drawn to payees, some of whom were real and some fictitious. It was therein held that negotiable paper, the payee of which does not represent a real person, cannot be treated as payable to bearer, unless the paper was put into circulation by the maker with knowledge that the name of the payee does not represent a real person ; and in the course of the opinion the court says:
“The maker’s intention is the controlling consideration which determines the character of such paper. It cannot be treated as payable to bearer unless the maker knows the payee to be fictitious, and actually intends to make the paper payable to a fictitious person.!’
The distinction thus presented between the two cases, we think, is clear. In the case cited the principals did not put paper in circulation [258]*258with knowledge that the name of the. payee did not represent a real person; whereas, in the case at bar, the bank, through its authorized officer, put in circulation paper, with knowledge on the part of the drawer, and with intent to indorse thereon the names- of payees who, for all intents and purposes, were fictitious payees, adopted and resorted to as a device to avert suspicion. A case which has been frequently referred to, and which we think more like this in principle, is that of Hortsman v. Hens haw, 11 How. 183, which was a case where a bill of exchange had upon it the forged indorsement of the payees, but it had been put into circulation by the drawers with such forged indorsement already upon it, and it was purchased in the market by a bona fide holder, who presented it to the drawee, who accepted and paid it at maturity, and then the drawers failed. In that case it was held that the drawee could not recover back the money which he had paid to the bona fide holder; and the reason, among others stated by the court in the opinion, was that “the bill was put in circulation by the drawers with the names of the payees indorsed upon it; and by doing so they must be understood as affirming that the indorsement is in the handwriting of the payees, or written by their authority. And ■if the drawee had dishonored the bill, the indorser would undoubtedly .have been entitled to recover from the drawers, and the drawers must be equally liable to the acceptor who paid the bill; for, having admitted the handwriting of the pajees, and precluded themselves from disputing it, the bill was paid by the acceptor to the persons authorized to receive the money according to the drawers’ own order. ” And it was further said that the English cases most analogous to this are those in which the names of the drawers or payees were fictitious, and the indorsement written by the maker of the bill. So we say that the cases most analogous to the one at bar, and the principles most nearly applicable, are those involving fictitious drawers and payees. In other words, we think that the circumstance that there was a resemblance between the names of the payees used to those of persons who were known to Bartlett, where it was not intended that such persons should become parties in any way to the paper, does not vary the rule or principle which would be applicable if, instead of using such names, he had used those which were purely fictitious. We are of opinion, therefore, that the judgment appealed from should be affirmed, with costs and disbursements. All concur.
NOTE.
The following opinion was delivered orally by Barrett, J., on the motion to dismiss the complaint:
“I do not think that a correct solution of the question presented depends upon the underlying question as to whether the bills were payable to a fictitious person, or, in legal effect, to bearer. The true solution of the question presented is simple, if we look at the precise facts. Bach of these bills was drawn and indorsed cotemporaneously. The real question, therefore, is, what was the cashier’s intent in drawing the bills in the form he did? He drew each bill to the order of either A. S. Brown or C. E. Stubbs. At the same moment, and before he had parted with or issued the bill, or had given it any legal vitality, he, in substance, directed its payment, not to A. S. Brown or to G. E. Stubbs, but to Gumming & Russell, or E. A. Bigelow & Co., or Latham, Alexander & Co. Now, What was his intent? As cashier he was authorized to draw the hills. That was [259]*259within his power. If he had drawn each of these bills to the order of Gumming & Russell, or E. A. Bigelow & Co., or Latham, Alexander & Co., it would have been within his authority, and payment by the New York bank to these respective houses on their valid indorsement would have been a perfectly valid payment as against the South Carolina bank. In place, however, of drawing each bill in that form, he wrote in the name of Brown or Stubbs as nominal paj’ee on the face of each draft, and at the same moment turned the draft over and wrote on the back, ‘Pay to the order of Gumming & Russell, or E. A. Bigelow & Company, or Latham, Alexander & Company. A. S. Brown;’ or ‘Pay to the order of either of these same houses. 0,cE. Stubbs.’ In my judgment, this act of indorsement at that time and under" those circumstances was not, in a legal sense, forgery. The writing of Brown’s or Stubbs’ name in that manner defrauded neither of these persons, nor did it defraud his own bank nor the New York bank, nor the New York firms who were named as indorsees. The fraud was the unlawful drawing of the draft for his own purposes, with intent to convert his own bank’s funds. An indictment against him for forgery would not lie, for his crime was really naught save larceny.
“Mr. Daniels, in his work on Bills, says that, if the bill is payable to a person known to exist at the time, and present to the mind of the drawer as the party to whose order it was to be paid, that was not a fictitious person. That is sound doctrine, but the evidence here is conclusive that in no single instance was one of these drafts made payable to the order of a person known to exist, and in the mind of the cashier as the party to whose order it was to be paid. He never intended that any of these drafts should be paid to Brown or Stubbs, or to the order of either of them. He intended that they should be paid to the order of the persons to whom he was about to send them, and that was his sole intention. If this cashier had been an individual drawing on his own bank, it would seem to be entirely clear. If, for example, I draw on my bank to pay money I owe Mr. Bowers, and instead of making the check directly payable to his order, I write in the name of Mr. Wingate (or of any other person who happens to come into my mind at the moment) as the payee, and I then indorse the check payable to Mr. Bowers, and sign Mr. Wingate’s name, (or the name of any such other person whom I may happen to have specified as payee,) 1 surely commit no forgery when I deliver the check thus indorsed to Mr. Bowers, and he upon his own proper indorsement procures from my bank thereon the money I owe him and intend to pay. I have simply resorted to a roundabout way of paying Mr. Bowers what I owed him and intended to pay him, and my bank, in honoring the check, has simply executed my will in the premises, and done what I directed. In form I have said that the money should be paid to'the order of Mr. Wingate, but when the money is actually paid to Mr. Bowers, upon my direction, it is a good payment; and whether that direction be given in the name of Mr. Wingate or in my own name is immaterial. Each draft which was drawn by this cashier to the order of Brown or Stubbs, and which was cotemporaneously indorsed by his own hand, payable to the specific persons whom he intended as its indorsee and as the recipient of its proceeds, was a direction which was within his mind when he drew the draft as he did. Such indorsement was just as much a part and parcel of the draft, as though he had written on its face, ‘Pay to the order of Gumming & Brown, or E. A. Bigelow & Co., or Latham, Alexander & Company.’ He never intended that any draft should reach Brown or Stubbs, or to be paid to them or either of them, or on their or either of their order. When he drew the draft, he acted as cashier; when at the same moment he indorsed it, he still acted as cashier. He was not cashier when he wrote the face of the draft, and an individual when he turned the draft over and wrote the indorsement. There was but one continuous act, and he simply completed the draft payable to the New York houses when he wrote the indorsement. If he had delivered the drafts to Brown or Stubbs unindorsed, and had subsequently reacquired them, that would have presented an entirely different question, and doubtless the indorsement of Brown’s or Stubbs’ name on a draft which had once been issued would have been a forgery. Here, however, the indorsement preceded the issuing or original delivery of the drafts, and the intent was palpable. That intent was that the New York bank should pay these drafts to the respective indorsees. This is evidenced not only by the fact that the indorsement was made cotemporaneous with the drawing of the instrument, and before it was issued or had any vitality, but also by ^the fact that these drafts were duly returned to the bank, and the cashier had full knowledge that they had been paid to the respective various indorsees. It seems to me, therefore, [260]*260that when the bank at New York paid the money on those drafts to their respective indorsees, they paid them rightfully,—that is, in accordance with the real tenor of the bills,—just as much as though the indorsees’ names had been mentioned as original payees. The intent of the cashier was the intent of his bank, that is, so far as the New York bank was concerned; if not, the New York bank would have no right to pay these bills at all.
“As to the other points, with respect to these accounts, and their retention for a considerable period without objection by the South Carolina bank, I should have very great difficulty in sustaining the defendant’s contention. It seems to me that the true effect of these accounts and the.r retention was to settle all question as to the cashier’s intent, as already suggested. To give them an)' other effect would require proof that the New York bank suffered by their retention and by the nonaction of the South Carolina bank, as, for instance, if vigilance on the latter’s part would have given the defendant such notice as "would have enabled it to collect from the cashier in whole or in part. It is not, however, necessary for me to speak definitely about that, as, for the reasons al ready given, the complaint should be dismissed. ”