
    Alfred McCarville, Plaintiff, v. Theresa Lynch, Defendant.
    (New York Common Pleas
    Equity Term,
    October, 1895.)
    No right can be acquired by a forged indorsement.
    A delivery by the payee of a certificate of deposit to his order without indorsement confers.no apparent, ownership or power of disposition on the holder.
    A delivery by the payee of a certificate of deposit as security for his good conduct in an employment imparts no title which, in the/hands, of a bona fide purchaser, will prevail against the title of the payee.
    Receiving the certificate in the belief" that he who passes, it is the payee, and in reliance on his indorsement as the indorsement of the payee, is not taking it upon the faith of apparent ownership in the former conferred by the latter.
    -In the absence of either an indorsement or assignment of the certificate by the payee, another to whom possession of the certificate is intrusted cannot, by his assignment, convey title even to a bona fide holder for value.
    Action to compel surrender of a certificate of deposit.
    
      Abner G. Thomas, for plaintiff.
    
      Abram KUng, for defendant.
   Pryor, J.

One Lawrence, fraudulently pretending that he had secured an employment for plaintiff, represented tó him that the fictitious employer required security for his ’faithful conduct. Thereupon plaintiff procured a certificate of deposit as follows: ,

■“ Fifth National Bank. “ $150.

“ New York, December 15th, 1894.

This certifies that Alfred McOarville has deposited in this ¡bank one hundred and fifty dollars, to the order of himself.

“ W. S. Beokley, Teller.

“ S. Kelly, Vice-President.”

Feigning to be Alfred McOarville, Lawrence indorsed that name on the certificate and delivered it to the defendant for 'ninety dollars in jewelry and sixty dollars in money. Discovering the cheat practiced upon him by Lawrence, McOarville demanded the certificate of defendant, and on her refusal to return it he brings this action'to compel its surrender.

Conceding the defendant’^ contention that, in legál effect, the paper is the negotiable note of the bank, and that she holds it in good faith and for value, still she may not retain it from the plaintiff.

Of course, the defendant, no matter what her caution, ■acquired no right by virtue of the forged indorsement. Graves v. Am. Ex. Bank, 17 N. Y. 205 ; Colson v. Arnot, 57 id. 253. Neither does she get title by operation of the ■statutory provision that a promissory note, payable to the ■order of the maker, is, when negotiated by him, in legal effect, payable to bearer; for here the certificate is not to the order ■of the maker, but of the payee (Plets v. Johnson, 3 Hill, 112, 116), and the payee, instead of negotiating it, merely deposited it as security. Baring v. Lyman, 1 Story, 416.

Another position of the defendant is that the plaintiff communicated a "title tó Lawrence which, though voidable for fraud, became indefeasible in favor of a bona fide transferee f<?r value. Simpson v. Del Hoyo, 94 N. Y. 189,194. Plaintiff, however, intended to impart no title to Lawrence, but merely delivered the certificate in bailment. The principle invoked is applicable only .when a vendor purposes to pass the property to the fraudulent vendee; and is ineffectual for the protection of a purchaser from a bailee. Paddon v. Taylor, 44 N. Y. 371.

It is argued again that the plaintiff invested Lawrence with an apparent power of disposition, and so enabled him to convey title to the defendant. McNeil v. Tenth Nat. Bank, 46 N. Y. 325. But mere possession of the certificate was not the equivalent of apparent ownership, and imported no power of disposition (Moore v. Metropolitan Bank, 55 N. Y. 41, 48; McNeil v. Bank, 46 id. 329, 330), especially since the paper was not indorsed by the person to whose order it is. payable. Goshen N. Bank v. Bingham, 118 N. Y. 349, 358. The absence of such indorsement .was in itself notice of a defect of title in Lawrence. Nor did defendant take the certificate upon the faith of an apparent title in Lawrence, communicated by the plaintiff (Moore v. Bank, 46 N. Y. 41), but in the belief;, after investigation, that Lawrence was the plaintiff and in reliance upon the indorsement of Lawrence as the indorsement of plaintiff. Colson v. Arnot, 57 N. Y. 253.

It is contended, finally, that although defendant took nothing as indorsee, yet she got title as assignee. By assignment from whom? Not from plaintiff; for he made' no assignment either to defendant or Lawrence. Not from Lawrence, for he had nothing to assign. In Risley v. Bank, 83 N. Y. 318, there was an actual and effectual assignment of the deposit independently of the check. Lynch v. Bank, 107 N. Y. 179, 185. So in Freund v. Bank, 76 id. 352, 358, there was an assignment of the check by the payee, and to one who could enforce it against the maker. Assuming, however, defendant to be assignee .of Lawrence, she takes subject to plaintiff’s title. Simpson v. Del Hoyo, 94 N. Y. 189, 192; Greene v. Warnick, 64 id. 220; Westfall v. Jones, 23 Barb. 9.

Judgment must be awarded to plaintiff.

Since it was defendant’s refusal to surrender the certificate . on demand, and her persistence in retaining it after knowledge of the facts that forced plaintiff into court, it is equitable that he be indemnified the expense^ of the litigation by an allowance of taxable costs.

Judgment for plaintiff, with costs.  