Sybedon Corp. v. Bank Leumi Trust Co.

—Order, Supreme Court, New York County (Herman Cahn, J.), entered on or about April 12, 1995, which partially granted defendant’s motion for summary judgment, unanimously affirmed, without costs.

Plaintiffs are precluded by UCC 3-405 (1) (c), the "padded payroll” rule, from recovering against defendant bank on the 16 checks drawn by and made payable to plaintiff Sybedon Corporation and forged by plaintiffs’ defalcating employee with Sybedon’s indorsement "for deposit only” to plaintiff ZBL Associates’ account with defendant, with respect to which the employee had actual authority to withdraw…