Hutzler v. Hertz Corporation
Court of Appeals of New York
347 N.E.2d 627 (1976)
After Christina Hutzler (plaintiff) settled her suit against Hertz Corporation (Hertz) (defendant), Hertz mailed a settlement check payable to both Hutzler and her attorney, Daniel Yudow; Yudow signed his own name, forged Hutzler's signature, deposited the check at Manufacturers Hanover Trust Company (Manufacturers) (defendant), and disappeared. Hutzler demanded Hertz pay her directly, and when Hertz refused, she sued both Hertz and Manufacturers; the lower court awarded Hutzler judgment against Hertz (reduced by the value of Yudow's legal services) but granted summary judgment to Manufacturers, and both Hertz and Hutzler appealed.
Whether the drawer of a settlement check is discharged from further liability to the payee once the check is paid by the drawee bank to the payee's own attorney, even though the attorney forged the payee's indorsement and kept the proceeds for himself.