New York Law Review

Tag: forgery

  • World Exchange Bank v. Commercial Casualty Insurance Co., 255 N.Y. 1 (1930): Definition of Forgery and Insurance Coverage

    World Exchange Bank v. Commercial Casualty Insurance Co., 255 N.Y. 1 (1930)

    Forgery, in the context of insurance coverage for losses due to forged checks, occurs when a person falsely makes a writing that purports to be the act of another, even if the person uses an assumed name, with the intent to deceive.

    Summary

    World Exchange Bank (plaintiff) sought indemnity from Commercial Casualty Insurance Co. (defendant) under a policy covering losses from forged checks. A depositor, using different names at different banks, deposited checks signed under assumed names into his account at World Exchange Bank, then withdrew the funds before the checks were returned unpaid. The court held that the checks were indeed forgeries because the depositor signed them under assumed names to deceive the bank into believing they were drawn by different individuals, thus triggering coverage under the insurance policy.

    Facts

    A man opened accounts at three different banks under the names George D. Wagner (at World Exchange Bank), Charles G. Weber (at Chatham & Phenix Bank), and Charles F. Viets (at Yorkville Bank).
    Wagner deposited two checks into his World Exchange Bank account, one purportedly from Weber and the other from Viets, both drawn to his order.
    In reality, Wagner signed both checks using the assumed names.
    The bank, believing the checks to be genuine, credited Wagner’s account, and he withdrew $800.
    The checks were returned unpaid due to insufficient funds or no account at the drawee banks.

    Procedural History

    The trial court ruled in favor of the World Exchange Bank.
    The Appellate Division reversed, finding that the checks were not forgeries under the policy.
    The Court of Appeals reversed the Appellate Division’s decision, reinstating the trial court’s ruling.

    Issue(s)

    Whether the checks signed by the depositor under assumed names constituted “forged” checks within the meaning of the insurance policy issued by Commercial Casualty Insurance Co.

    Holding

    Yes, because the depositor signed the checks under assumed names intending to deceive the bank into believing they were drawn by different individuals, constituting a “false making” of the instruments and thus a forgery.

    Court’s Reasoning

    The court reasoned that while a person may generally use any name, doing so to defraud others constitutes forgery. The checks in question were not what they purported to be – instruments drawn by one person to the order of another and endorsed by the payee. The act of signing and endorsing the checks under different names created a false impression that two separate individuals were involved.

    The court emphasized that the test of forgery is whether a person falsely and with the purpose to defraud made a writing which purports to be the act of another. The court quoted Commonwealth v. Baldwin, 77 Mass. 197, stating, “Forgery, speaking in general terms, is the false making or material alteration of or addition to a written instrument for the purpose of deceit and fraud. It may be the making of a false writing purporting to be that of another.”

    Even though the signatures matched the names on file at the respective banks, the intent to deceive World Exchange Bank transformed the act into forgery. The court distinguished this case from situations where a person signs a check under an assumed name simply to withdraw funds from their own account; here, the intent was to create the false impression of a transaction between two distinct parties.

    The court stated, “In all forgeries the instrument supposed to be forged must be a false instrument in itself; and that if a person give a note entirely as his own, his subscribing it by a fictitious name will not make it a forgery, the credit there toeing wholly given to himself, without any regard to the name, or any relation to a third person.” The Court found that the check was made by the plaintiff’s depositor not as his own but as the act of a third party. Credit was not given wholly to himself but upon the faith of an instrument purporting to be that of a third party.

    Therefore, the court held that the bank’s loss was covered by the insurance policy because the checks were indeed forgeries as defined by law and the policy’s intent, warranting indemnification by the insurance company.

  • People v. Risley, 214 N.Y. 75 (1915): Admissibility of Mathematical Probability Evidence

    People v. Risley, 214 N.Y. 75 (1915)

    Evidence based on mathematical probability, particularly when used to establish the improbability of certain events or conditions, is inadmissible when it lacks a foundation in observed data and relies on speculation rather than demonstrable facts.

    Summary

    Risley, an attorney, was convicted of offering a forged document as evidence. The prosecution presented expert testimony applying mathematical probability to typewriter defects to argue the document was altered on Risley’s machine. The Court of Appeals reversed, holding that such speculative probability evidence, lacking a basis in actual observed data about typewriters and their use, was inadmissible and prejudicial. The ruling underscores the importance of grounding evidence in factual observations rather than theoretical probabilities, especially when expert testimony may unduly influence the jury.

    Facts

    Risley represented Bennett in a patent dispute against Iron Clad Manufacturing. During a trial in February 1911, Risley offered an affidavit. It was alleged the words “the same” had been fraudulently inserted into the affidavit. The prosecution claimed Risley altered the affidavit to strengthen his client’s case after an appellate court highlighted deficiencies in the evidence. The prosecution presented evidence that Risley had accessed the document at the County Clerk’s office shortly before the trial. Samples of typewriting from Risley’s office typewriter were introduced to demonstrate similarities with the altered document.

    Procedural History

    Risley was convicted in the trial court for offering a forged document in evidence. The Appellate Division affirmed the conviction. Risley appealed to the New York Court of Appeals.

    Issue(s)

    Whether the trial court erred in admitting expert testimony based on mathematical probabilities to demonstrate the unlikelihood of the defects in the forged document being produced by a typewriter other than the defendant’s.

    Holding

    No, because the mathematical probability evidence presented by the prosecution was speculative and lacked a sufficient foundation in observed data, rendering it inadmissible and prejudicial to the defendant.

    Court’s Reasoning

    The Court of Appeals found the admission of mathematical probability evidence to be reversible error. The Court emphasized that the expert witness (a mathematics professor) lacked specific expertise in typewriters and did not account for the human element in operating the machine. The Court distinguished this type of evidence from actuarial tables, which are based on observed data. The Court stated the witness’s testimony “was not based upon actual observed data, but was simply speculative, and an attempt to make inferences deduced from a general theory in no way connected with the matter under consideration supply the usual method of proof.” The Court noted that the jury might give undue weight to such complex and seemingly scientific evidence, potentially obscuring other important facts. Therefore, the Court concluded that allowing such speculative evidence was prejudicial to the defendant and warranted a new trial.

  • People v. Graham, 6 Park. Crim. Rep. 135 (N.Y. Sup. Ct. 1867): Sufficiency of Forgery Indictment Without Addressee

    People v. Graham, 6 Park. Crim. Rep. 135 (N.Y. Sup. Ct. 1867)

    An indictment for forgery is sufficient even if the forged instrument lacks a specific addressee, provided the instrument on its face demonstrates the potential to injure or affect the rights or property of another.

    Summary

    The defendant was convicted of forgery for uttering a false instrument purporting to be a request from Daily & Co. for the delivery of goods. The instrument was not addressed to any specific person. The defendant argued that the indictment was deficient because the instrument lacked an addressee and because the Meriden Cutlery Company, the entity defrauded, was improperly identified. The court upheld the conviction, reasoning that the statute covered any instrument affecting property rights and that the indictment sufficiently identified the intended victim of the fraud.

    Facts

    The defendant was indicted for forging an instrument purporting to be a request from Daily & Co. for the delivery of certain goods. The instrument was presented to the Meriden Cutlery Company, and the defendant obtained goods using it. The instrument was not addressed to any specific person or entity. The Meriden Cutlery Company was located in Connecticut and had an agency in New York City where the instrument was presented and the goods were obtained. The indictment charged the defendant with intent to defraud the Meriden Cutlery Company.

    Procedural History

    The defendant was convicted at trial. The defendant appealed the conviction, arguing that the indictment was insufficient because the forged instrument lacked a specific addressee and because the Meriden Cutlery Company was improperly identified. The Supreme Court reviewed the conviction on a writ of error.

    Issue(s)

    1. Whether an instrument lacking a specific addressee can be the subject of forgery under the statute.

    2. Whether the Meriden Cutlery Company could properly be regarded as the subject of an intended fraud.

    3. Whether the indictment was defective because it charged the defendant with intent to defraud persons unknown to the jury, when the grand jury and petit jury allegedly knew who was defrauded.

    Holding

    1. Yes, because the statute covers any instrument that affects property rights and aims to prevent any question of whether the specific paper forged is embraced by or specially enumerated in the statute.

    2. Yes, because the evidence showed the existence of the company, its property, and the fact that it was defrauded, thus making it a capable subject of fraud, or because, even if the company did not legally exist, the indictment was sufficiently broad to reach its individual members or agent.

    3. No, because the knowledge of the petit jury is irrelevant to the validity of the indictment, and it is not necessary for the indictment to particularly designate the party meant to be defrauded if the indictment indicates a real person or entity that was defrauded or intended to be defrauded.

    Court’s Reasoning

    The court reasoned that the statute (2 R.S., p. 673, § 33) was broad enough to cover any instrument in writing that purported to be the act of another and by which a pecuniary demand or obligation was created, or by which property rights were transferred, conveyed, discharged, or diminished. The court emphasized the revisers’ intent to create a sweeping provision that embraces every forgery of a writing that could injure an individual or body politic in person or estate. The court distinguished English cases that required a specific addressee, noting that New York’s statute omits the enumeration of specific instruments, instead using the general designation “any instrument.” The court stated, “It is sufficient that the paper or instrument be of such a character that, by its use, another may be deprived of his property, or by which a pecuniary liability might be created.”

    Regarding the identity of the defrauded party, the court held that the Meriden Cutlery Company could be the subject of fraud, whether it was a corporation or a copartnership. Even if the company did not legally exist, the indictment was sufficient because it charged an intent to defraud “divers other persons to the jury unknown,” which could include the company’s members or agent. The court emphasized that the proof showed the existence of the company, its property, and the fact that it was defrauded.

    Regarding the third exception, the court found no error in the refusal to charge that the indictment must be disregarded if the grand jury and petit jury knew who was defrauded. The court reasoned that the knowledge of the petit jury was irrelevant, and it was not necessary for the indictment to particularly designate the party meant to be defrauded. The court cited Lowel’s case (1 Leach, 248; 2 East. P.C., p. 990, § 60) to support the proposition that it is sufficient if any person could be indicated from the words used in the indictment, and whether that person was the meditated object of the fraud is a matter for the jury to consider at trial. The court stated that “it is essential to aver that some real person or existent body was defrauded, or that the intent existed to defraud some such.”