Case Name: Meadow Brook National Bank, Respondent, v. Rogers & Haggerty, Inc., et al., Appellants, et al., Defendant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1966-04-04
Citations: 25 A.D.2d 754
Docket Number: 
Parties: Meadow Brook National Bank, Respondent, v. Rogers & Haggerty, Inc., et al., Appellants, et al., Defendant.
Judges: Christ, Acting P. J., Brennan, Hill, Hopkins and Benjamin, JJ., concur.
Reporter: Appellate Division Reports
Volume: 25
Pages: 754–755

Head Matter:
Meadow Brook National Bank, Respondent, v. Rogers & Haggerty, Inc., et al., Appellants, et al., Defendant.

Opinion:
In an action by a bank upon a promissory note, in which defendant Rogers & Haggerty, Inc. (maker of the note) interposed counterclaims for damages, said defendant and defendant Falino (indorser of the note) appeal from an order of the Supreme Court, Nassau County, entered June 29, 1964, which granted plaintiff's motion for summary judgment. Order affirmed, with $10 costs and disbursements. Prior to the making of the, note., the bank had honored four checks which defendant Rogers. & Haggerty, Inc., had drawn on its account with the bank and which were payable to the nonappealing defendant, Sol-Mar Painting & Decorating Co., Inc. A dispute ensued between Rogers and the bank as to whether the bank should have refused to pay the checks. The dispute was lulled by the bank's lending Rogers an amount of money equal to the total amount of the checks, the note being given for the loan. Appellants rely on an alleged simultaneous parol agreement that the note was not to be paid unless and until it would be. determined that Rogers was indehted to Sol-Mar for the total amount of the cheeks; and appellants assert that subsequent to the note transaction it was determined in a certain lawsuit that Rogers was not so indebted to. Sol-Mar, The counterclaims ave based on the bank's refusal to reeredit to Rogers' account the total amount of the cheeks and the bank's return of other cheeks issued by Rogers, with accompanying statements that there were insufficient funds, in Rogers' account to pay those check®. It is true that judgment was, granted to Rogers against Sol-Mar in the latter's action, but it was based on the fact, claimed by Rogers in that action, that the four cheeks constituted full payment to Sol-Mar. Accordingly, the alleged condition prece dent to enforeibility of tbe note has been met. It is unnecessary to reach the question of whether the condition precedent was unavailing to appellants, as violative of public policy. The counterclaims were properly dismissed. Rogers, having already taken credit in Sol-Mar's action for the bank's payment of the cheeks to Sol-Mar, it may not now seek to duplicate that gain by a defense against the bank on the theory that the bank should not have paid the cheeks. A bank does not incur a tort liability for injury to a depositor's credit or business for the improper return of a check. Its only liability therefor is in contract for a breach of its obligations in the depositor-banker relationship (Stella Flour & Feed Corp. v. National City Bank of N. Y., 285 App. Div. 182, affd. 308 N. Y. 1023).
Christ, Acting P. J., Brennan, Hill, Hopkins and Benjamin, JJ., concur.