Marcuson v. Yorkville Bank

147 N.Y.S. 472

• Court: Appellate Terms of the Supreme Court of New York
• Decided: April 28, 1914
• Status: Published

Opinions

PAGE, J.

One Morris Kushner, who was ill of tuberculosis in a hospital, wrote a letter to the Public Bank, in which he had a deposit of $70, requesting the Public Bank to pay whatever money he had on deposit to his son, Harry Kushner. Harry Kushner presented the letter to the Public Bank, and received a cashier’s check, drawn by the Public Bank upon the National Bank of Commerce, payable to the order of Morris Kushner. Harry Kushner indorsed the check in Hebrew in his own name and delivered it to Sadie R. Marcuson, the plaintiff, who then indorsed it and delivered it to the defendant, York-ville Bank. The Yorkville Bank received payment through the New York Clearing House, and indorsed it with the usual receipt, “Indorsements guaranteed.” About 11 months thereafter the National Bank of Commerce wrote the Yorkville Bank that a claim had been made by the Public Bank that the money had been paid without the indorsement of the payee, Morris Kushner,. upon the check. After discovering that such was the fact, and that the check was not paid upon'the order of Morris Kushner, the Yorkville Bank repaid the money to the National Bank of Commerce, who in turn refunded it to the Public Bank.

[1, 2] It is apparent that the Public Bank did not honor the request of Morris Kushner to pay the balance of his account to Harry Kushner, but drew its check payable to the order of Morris Kushner upon the National Bank of Commerce, thereby giving to Morris Kushner the power to make such disposition of his balance as he might desire. The National Bank of Commerce was bound to pay the check as directed. The Yorkville Bank presented the check to the Bank of Commerce with indorsements guaranteed, and was bound to make good any loss occasioned by lack of proper indorsement upon the check. It is not disputed that the name of the payee was not indorsed upon the check and that the payment was unauthorized. The Bank of Commerce was bound, therefore, to repay the money to the Public Bank, and the Yorkville Bank was bound by its indorsement to make up the loss to the Bank of Commerce. The plaintiff stood in the position of guarantor to the defendant, and was in turri bound to repay the amount of the check to it.

If the facts showed an intention upon the part of the Public Bank to make Harry Kushner the actual payee of the check, and that he was the individual to whom payment should have been made, a different, question would have been raised; but in my opinion there is no evidence of such intention. The teller of the Public Bank testified that it was the custom of the bank, when it received orders of this kind from its depositors, to make the checks given thereon payable to the depositor himself, in order to protect the bank. This and the check itself are the only evidence of the intention of the drawer of the check presented to the court, and a finding of any other intent than that stated in the check would be totally unsupported by proof.

There is no injustice in this disposition of the case. If Harry Kushner is entitled to the money as donee causa mortis or inter vivos, or by assignment, as claimed by the appellant, the money is in the Public Bank in the name of Morris Kushner, deceased, and can be obtained by Harry Kushner upon proof of his right to it, or by the plaintiff by an appropriate action in equity.

[3] The indorsement upon the check, being in Hebrew letters, might well have been mistaken by English tellers for that of the payee, and failure of the Public Bank to detect the error at once was for this reason not such gross negligence as would estop them from making their claim against the Bank of Commerce. The case is in effect the same as if the indorsement had been forged, in which case the drawer is allowed by statute one year from the' date of return of his checks to make the claim. Negotiable Instruments Law (Consol. Laws, c. 38) § 326.

The judgment should be affirmed, with costs, with leave to appeal to the Appellate Division, First Department.

LEHMAN, J., concurs.