Rapp v. Dime Sav. Bank of New York

396 N.E.2d 740, 48 N.Y.2d 658, 421 N.Y.S.2d 347, 27 U.C.C. Rep. Serv. (West) 501, 1979 N.Y. LEXIS 2307

Opinion

OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be affirmed, with costs.

On the present record, there are no factual issues concerning the legality of defendant bank’s collection policy. Defendant, as a depository or collecting bank, generally may not prohibit a customer from drawing against a check deposited in his account after a reasonable time has elapsed from receipt of a provisional settlement for that item (Uniform Commercial Code, § 4-213, subd 4, par [a]). But the parties are free to formulate their own definition of "reasonable time” by agreement, so long as the time fixed is not manifestly unreasonable (Uniform Commercial Code, § 1-204).

In support of its cross motion for summary judgment, defendant demonstrated, prima facie, that its customers had assented to a collection agreement containing specific time frames. Having failed to come forward with an evidentiary showing sufficient to raise factual questions as to the validity of this contract or the manifest reasonableness of the time fixed, plaintiffs must suffer the consequences of summary judgment (see, e.g., Connell v St. Mary’s Hosp. of Troy, 45 NY2d 944, 946; Indig v Finkelstein, 23 NY2d 728).

Chief Judge Cooke and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Meyer concur in memorandum.

Order affirmed.