#### Joseph Meighan, Respondent, *v.*The Emigrant Industrial Savings Bank, Appellant.

First Department,

May 14, 1915.

Banks — savings bank deposit — inability of depositor „o produce book — statute construed.

The provision of the Banking Law to the effect that no savings bank shall pay any deposit unless the pass book of the depositor shall be produced and the proper entry made therein at the time of the transactions, does not make the production of the pass book an arbitrary condition which must at all hazards be complied with, and a depositor is entitled to receive his money where circumstances render the production of the book impossible. The rule requiring the production of the book is to protect the bank against the payment of deposits to others than those entitled thereto, and the reasonableness of the excuse for not producing the book must be determined in the light of this purpose.

Thus, where in an action by a depositor against a savings bank to recover a deposit, it appears that he had removed to a foreign country with his wife, and while he was confined in an asylum his wife obtained the pass book, together with the proceeds of a check which the depositor had

*543drawn, and departed for parts unknown to him, and he was subsequently unable to ascertain her whereabouts after reasonable inquiry, and the bank had no rule relating to the payment of deposits without the production of the book, and at trial made no contention that the plaintiff’s search for his wife was not adequate, a judgment founded upon the verdict of a jury for the amount of the deposit should be affirmed.

Dowling and McLaughlin, JJ., dissented, with opinion.

Appeal by the defendant, The Emigrant Industrial Savings Bank, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Hew York on the 29th day of October, 1914, apon the verdict of a jury, and also from an order entered in said clerk’s office on the same day, denying defendant’s motion for a new trial made upon the minutes.

The facts were as follows: The plaintiff, then a resident of Hew York city, had an account with the defendant standing in his individual name. The account was subject to the defendant’s by-laws, which contained this provision: “The Bank shall not be liable or called on to make any payment without the presenting of the pass-book at its counter, that the proper entry may be made in it.” When the account was opened' and when this action was commenced, the Banking Law provided that no savings bank shall pay any deposit unless the pass book of the depositor shall be produced and the proper entry made therein at the time of the transaction. It further provided that the trustees of savings banks might in their by-laws provide how payment should be made in case of loss of a pass book or under other exceptional circumstances where the book could not be produced without loss or serious inconvenience to depositor, the right to make such payments to cease when the Superintendent of Banks should so direct. (See Banking Law [Consol. Laws, chap. 2; Laws of 1909, chap. 10], § 152.)* The by-laws of the defendant made no provision whatever for payment without the production of the pass book.

In the summer of 1912 plaintiff, with Bridgét, his wife, went to Dublin, Ireland, where they lived at Ho. *1*Malachy road. While at this place plaintiff mailed to defendant his pass book *544together with a draft on defendant for fifty dollars. Having received the book and draft the defendant, on July 30, 1912, returned the book with a draft for the equivalent of fifty dollars to plaintiff by registered mail, and on August 8, 1912, the package was delivered to plaintiff’s wife at No. 7 Malachy road. In the latter part of July, 1912, plaintiff was committed to a lunatic asylum, where he was confined for five weeks, including the 8th day of August, 1912. On leaving the asylum plaintiff inquired at the general post office in Dublin and was . told that the registered package sent by the defendant and containing plaintiff’s bank book had been delivered to his wife as above recited. Plaintiff did not see his wife while he was in the asylum or after he left. After leaving the asylum plaintiff went to No. 7 Malachy road and found the house vacant. He inquired of neighbors concerning the whereabouts of his wife but obtained no information. The wife had relatives living near Dublin, but plaintiff did not inquire for her of them. Subsequently plaintiff wrote to defendant asking for a payment on account, and in reply was told he could draw no money without .presenting the pass book, and that defendant had received a communication from plaintiff’s wife stating that it was in her possession.

There was no evidence that the wife made any claim to the book adverse to plaintiff, and plaintiff testified that he had never assigned the book or any interest therein. On returning to this country plaintiff made demand on defendant for the amount remaining to his credit. He also in substance informed defendant of the facts, showing his inability to produce the book, but his demand was refused, defendant taking the position that it would not pay without the book. Thereupon this action was commenced.

*Richard O’Gorman,*for the appellant.

*Richard J. Donovan, for*the respondent.

*

 ¡Now Banking Law (Consol. Laws, chap. 2; Laws of 1914, chap. 369), 248.— [Rep.

Hotchkiss, J.:

The defendant does not contend that the provision of the Banicing Law requiring the production of the pass book is an arbitrary condition that must at all hazards be complied with, but if it did, the contention could not be upheld. In *Warhus**545v. *Bowery Savings Bank*(21N. Y. 543) it appeared that in pursuance of the provisions of the act incorporating the defendant and by which it was authorized to prescribe regulations for the withdrawal of moneys, the defendant had adopted a rule that “no person shall have the' right to demand any part of his principal or interest without producing the original book, that such payment may be entered therein,” and it was held that proof of the loss of the pass book or inability to find it after proper search, excused its non-production and entitled the depositor to his money. But the plaintiff in that case having offered no proof whatever of the loss or destruction of the book or any proof to account for its non-production, a dismissal of the complaint was sustained. In the present case, defendant having made no rule regulating payment- where, because of its loss or because of other exceptional circumstances, the book could not be produced, the first inquiry must be whether the facts disclose a reasonable excuse for plaintiff’s failure to present his book when he sought to withdraw his money.- The purpose of the rule requiring the production of the book is to protect the bank against the payment of deposits to others than those entitled thereto, and the reasonableness of the excuse for not producing the book must be determined in the light of this purpose. Had it been shown that the book was actually lost, a refusal to pay without its production would not have been justified. *(Mierke*v. *Jefferson County Savings Bank,*208 N. Y. 341.) Is the situation changed because, although it is to be inferred that the book is in the possession of a certain identified individual (no ground for suspecting an adverse claim on his part appearing), the whereabouts of that person cannot after reasonable search be ascertained ? I think not. Assuming that the delivery of the registered package by the Irish post office authorities to plaintiff’s wife was justified, notwithstanding it was addressed to plaintiff himself, what presumption can follow except that the wife received the package as plaintiff’s agent and to hold for him ? When after his release from the asylum plaintiff returned to the marital domicile and found it closed, and when after inquiry of those living in the neighborhood

*546plaintiff was unable to ascertain the whereabouts of his wife, I think he had performed every duty that could be reasonably required, particularly in view of the fact that the uncertainty of his wife’s whereabouts was characterized by the circumstance that she had neither visited nor communicated with him while he was in the asylum. In *Palmer*v. *Providence Institution for Savings*(14 R. I. 68), after the death of the depositor, plaintiff, his administrator, was unable to obtain the pass book from the depositor’s family, who had taken possession of it after his death, which fact plaintiff communicated to the defendant, which refused to pay, but the court held plaintiff entitled to recover. There is nothing in the record before us to show that if the plaintiff had made inquiry of them, the relatives of his wife, who lived near Dublin, could have given him any information of her whereabouts. The plaintiff testified that on several occasions he called at defendant’s banking house and informed its deputy comptroller of the facts concerning his search for his wife and his attempts to get possession of his book, but was told that no payment would be made without the book, and this was corroborated by the deputy comptroller, who said: “ I told him where the pass book was and. we had information it was in the hands of his wife.” On this evidence the jury was justified in finding that having adopted no rule or by-law regulating the conditions under which deposits might be withdrawn without producing the book, defendant stood out and refused to pay solely on this ground. If the defendant was dissatisfied with the sufficiency of the attempts plaintiff had made to get possession of the book, it should have said so, and, although I do not mean, to suggest that it would then have been plaintiff’s duty to have pursued any further search, I think that, defendant having failed to make any objection on the ground of insufficient search at the time when demand was made upon it and having apparently placed its refusal on the sole ground that the book was not produced and was in possession of plaintiff’s wife, it is in no position now to claim that plaintiff’s search for his wife was not as thorough as it might have been. .

The judgment and order should be affirmed, with costs.

*547Ingraham, P. J., and Laughlin, J., concurred; McLaughlin and Dowling, JJ., dissented.

Dowling, J. (dissenting):

The account of the plaintiff was received by the defendant subject to the latter’s by-laws which were printed in the depositor’s book, and which constituted part of the contract between the parties on which the deposit was received. *(Warhus*v. *Bowery Savings Bank,*21 N. Y. 543.) One of these by-laws provided: *“*The Bank shall not he liable or called on to make any payment without the presenting of the pass-book at its counter, that the proper entry may be made in it, nor shall it be liable for any deposit unless made at its counter during business hours.” The *Warhus*case just cited held that there was nothing unreasonable in such a regulation, nor did it work a forfeiture of the depositor’s money, and that if the depositor, when he wished to withdraw the money, could not do what the regulation of the defendant required, he must do the next best thing: account for the non-production of the pass book, and show its loss or destruction. The plaintiff herein has done neither. What he has shown is that the pass book, when returned to him by mail by defendant, as instructed by him, was taken possession of by his wife, who presumably still retains the same. He has taken no legal steps to secure the return of this pass book. He left Ireland without any adequate effort to find his wife, to ascertain her whereabouts or to regain possession of the book. This despite the fact that she had a brother and sister living in Ireland within a short distance of his then residence there, and from neither of them did he seek any information as to his wife’s whereabouts. He' returned to this country without any attempt to regain possession of his pass book, though he knew from the bank’s correspondence with him that they stood upon their contract and would, not pay him without the production of the book. *Mierke*v. *Jefferson County Savings Bank*(208 N. Y. 347) held that where a hank had failed to make a by-law providing for the method of making payments in case of the loss of a pass hook, or other exceptional cases, where the hook could not be produced without loss or serious inconvenience to depositor (Banking *548Law [Consol. Laws, chap. 2; Laws of 1909, chap. 10], §§ 143, 152)* the defendant could not insist on the giving of an indemnity bond, but the only question was whether plaintiff had given satisfactory evidence of the loss of the book. Here the record affirmatively shows that the book is in existence; it-has not been lost, but to plaintiff’s knowledge is in the possession of a third party; he has taken no means to regain such possession; and, therefore, it seems to me, until plaintiff has exhausted every reasonable means of obtaining possession of his pass book, or has made the party holding it a party defendant in his action, that he cannot recover against the depositary in the face of the express terms of the contract between them, which have been held not to be unreasonable. I, therefore, believe that the judgment appealed from should be reversed, with costs, and judgment given in favor of defendant, with costs.

McLaughlin, J., concurred.

Judgment and order affirmed, with costs.

*

 Now Banking Law (Consol. Laws, chap. 2; Laws of 1914, chap. 869), 248.—[Rep.