PEOPLE v. CUNNINGHAM

ROSENBLATT, J.

Defendant was convicted of forgery in the second degree (Penal Law § 170.10) for signing his own name to a corporate check, in excess of his authority. Because defendant's conduct does not constitute forgery under our statute, we reverse his conviction.

As the owner of a logging operation, Peter Morat planned to open a sawmill business in Madison County, under the name Herkimer Precut, Inc. He engaged defendant as a consultant to arrange for financing and related activities. In exchange for his services, defendant was to receive a 20% interest in the new venture. As the project progressed, Morat turned over various financial aspects of the business to defendant, entrusting him with control over the corporate checkbook. Because defendant was responsible for paying bills, Morat would sometimes provide defendant with blank, signed checks. At no time, however, did Morat authorize defendant to sign any checks.

After Morat discovered that corporate bills were not being paid, he examined the company's bank records and found unauthorized payments, some on checks he had signed in blank and others bearing a signature he did not recognize. Morat alleged that by improperly signing or issuing checks, defendant stole thousands of dollars from Herkimer Precut.

In two indictments consolidated for trial, a Montgomery County grand jury charged defendant with one count of grand larceny in the second degree, 15 counts of forgery in the second degree and 15 counts of criminal possession of a forged instrument in the second degree. A single count survived the trial: the forgery conviction before us, stemming from a $195.50 Herkimer Precut check defendant wrote to Nancy Herrick for work performed by Northeast Woodcraft. In Montgomery County, defendant signed his own name to that check, telling Herrick that he owned Herkimer Precut. Herrick was acquainted with defendant personally and professionally and knew that he was affiliated with Herkimer Precut. She did not know, however, that Morat owned the company and that defendant lacked authority to sign checks. The check was for defendant's personal expenses.

A divided Appellate Division affirmed defendant's conviction. We agree with the dissenters that forgery was not proved.

In People v. Levitan ( 49 NY2d 87, 90), we held that "[w]hile it is true that in certain rare instances one may commit a forgery by signing one's own name, this is so only where the signing is done in such a way as to deceive others into believing that the signer is in fact some third party." Levitan signed her name to deeds purporting to convey real property she did not own. In reversing her forgery conviction, we noted that "no pretense was ever made that the signatory was anyone other than defendant" ( id. at 89). We also observed that "[u]nder our present Penal Law, as under prior statutes and the common law, a distinction must be drawn between an instrument which is falsely made, altered or completed, and an instrument which contains misrepresentations not relevant to the identity of the maker or drawer of the instrument" ( id. at 90).

Although the Legislature has updated the statute to cover credit cards ( see L 1984, ch 949, § 1) and certain other technological advances ( see L 1996, ch 357, § 4), it has not abrogated Levitan's classic approach to forgery. In defining forgery, Penal Law § 170.00 (4) provides, in pertinent part, that "[a] person `falsely makes' a written instrument when he makes or draws a complete written instrument . . . which purports to be an authentic creation of its ostensible maker or drawer, but which is not such . . . because the ostensible maker or drawer . . . did not authorize the making or drawing thereof" (emphasis supplied).

The terms "authentic creation" and "ostensible maker" are pivotal. In most prosecutions, the forger, acting without authority, signs someone else's name. Thus, in a typical case, the forger, John Doe, wrongfully signs Richard Roe's name, (mis)leading the payee into believing that the check is the authentic creation of Richard Roe, its ostensible maker. Roe, of course, has not granted Doe any such authority and in many such instances has never even met Doe. In this simple formulation, the ostensible maker (Roe) and the actual maker (Doe) are two different people. If, however, the ostensible maker and the actual maker are one and the same, there can be no forgery under the statute.

Not surprisingly, the parties here disagree as to who is the ostensible maker. The prosecution argues that it is Herkimer Precut; defendant argues that he, the actual maker, is also the ostensible maker. They also disagree as to whether the check was the authentic creation of its ostensible maker.

The People contend that Herkimer Precut is the ostensible maker because its name appears on the check as owner of the account. Further, they argue that because defendant lacked authority to sign company checks, the check in question was not the authentic creation of the company, and a forgery is made out. Defendant counters that the check was an authentic creation of its ostensible maker and that because he signed his own name, he cannot be guilty of forgery: as the ostensible maker, he did not pretend to be anyone other than himself — the actual maker. Moreover, defendant argues that even if Herkimer Precut was the "ostensible maker" of the check, defendant's relationship with Herkimer Precut was sufficient to make the check the "authentic creation" of the company. In People v. Briggins ( 50 NY2d 302, 307), we observed that "when an individual signs a name to an instrument and acknowledges it as his own, that person is the `ostensible maker.'" Although Briggins involved a slightly different setting (and not a corporate check, as here), its language along with the statute's history and purpose, informs our analysis and supports defendant's position.

Forgery is a crime because of the need to protect signatures and make negotiable instruments commercially feasible ( see generally Kessler, Forged Indorsements, 47 Yale LJ 863 [1938]). In its common-law roots, forgery had little to do with abstract questions of authority. At Queen's Bench, Chief Justice Cockburn wrote that forgery "by universal acceptation . . . is understood to mean . . . the making or altering of a writing so as to make the writing or alteration purport to be the act of some other person, which it is not" ( In re Windsor, 6 Best Sm 522, 122 Eng Rep 1288, 1290 [1865]). As one treatise explains, "it is not forgery for a person to sign his own name to an instrument, and falsely and fraudulently represent that he has authority to bind another by doing so" and "the signer is guilty of false pretenses only" (Clark and Marshall, A Treatise on the Law of Crimes § 12.34, at 957 [7th ed 1967]). Although statutes vary, most jurisdictions in this country have tended to follow the Windsor approach to forgery ( see e.g. 2 Wharton, Criminal Law § 859, at 1162-1163 [12th ed 1932]).

In Gilbert v. United States ( 370 US 650), the Court considered whether a federal forgery statute included misrepresented agency. An accountant endorsed a government check written to a client by signing the name of the payee and then his own, as agent. He had no authority to do so. Under the federal statute, forgery "does not embrace a purported, but misrepresented, agency endorsement" ( id. at 652). Recognizing the common-law origins of that statute, the Court ( id. at 655) quoted Regina v. White (2 Car K 404, 413, 175 Eng Rep 167, 170 [1847]), which held that "indorsing a bill of exchange under a false assumption of authority to indorse it per procuration, is not forgery, there being no false making."

As the court noted in United States v. Young ( 282 F3d 349, 351-352 n 1 [5th Cir 2002]), "[t]he majority of state law cases hold that signing one's own name on one's own check without sufficient funds to cover the amount of the check does not constitute forgery. In these cases, the person writing the check is not trying to pass himself off as someone else. . . . The same principle applies when an agent signs a company check without actual authority to do so." We conclude that authority and authenticity are not the same thing. Defendant did not commit forgery merely by exceeding the scope of authority delegated by the corporation. Our interpretation leaves no gap in the Penal Law. Although embezzlers who use their own names to sign checks beyond their authority are not guilty of forgery in New York, their conduct would ordinarily fall within our larceny statutes ( see Penal Law § 155.00 et seq.; see also, n 2 at 595.

Moreover, importing issues of authority into the statute, without express legislative language, would create vexing problems in adjudging forgery cases. If, for example, a corporate officer authorized to sign corporate checks does so for a personal purchase, is that forgery? Would an officer authorized to sign checks up to $20,000 who signs a check for $25,000 be guilty of forgery? While the prosecution argues that we should read our statute to justify convictions in those instances, it has not identified any New York decision interpreting the statute that expansively.

Accordingly, the order of the Appellate Division should be reversed and the indictment dismissed.

Order reversed, etc.