Case ID: ad2d_162/html/0177-02.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

City of New York, Respondent, v Chase Manhattan Bank, N. A., Appellant and Third-Party Plaintiff-Respondent-Appellant. Citibank, N. A., Third-Party Defendant-Appellant-Respondent.
   Judgment, Supreme Court, New York County (Eugene Nardelli, J.), entered July 26, 1988, finding in favor of the plaintiff against the defendant, unanimously affirmed, without costs. Judgment of the same court, entered August 5, 1988, awarding judgment over against third-party defendant Citibank, N. A., unanimously affirmed, without costs.

The plaintiff City of New York issued a check, drawn on Chase Manhattan Bank, which was stolen after mailing and which was deposited with a forged indorsement in an account at Citibank, the third-party defendant. The city became aware of the theft and notified the payor bank, defendant Chase, to stop payment, but the check had already been paid.

Plaintiff commenced this action against Chase, which in turn brought a third-party action against Citibank for breach of its presentment warranty under UCC 4-207 (1) (a). On the arguments presented, we affirm the grant of summary judgment to the city in the main action, and to Chase as third-party plaintiff. We find no issues of fact as to proper mailing of the check to the named payee. While we are concerned that the proceeds of the check might have been frozen in the Citibank account, and the loss avoided, had the plaintiff acted promptly to notify defendant Chase of the theft, we find that no claim in defense is properly presented by third-party defendant Citibank under UCC 4-406 (5), and that Citibank was liable on the breach of its warranty. Nor are we persuaded that any common-law remedy of estoppel lies. (See, Prudential-Bache Sec. v Citibank, 73 NY2d 263 [1989].) Concur —Kupferman, J. P., Ross, Kassal, Smith and Rubin, JJ.