Court Opinion

ID: 5357223
Source: CourtListenerOpinion
Date Created: 2022-01-08 07:08:11.710589+00
Date Added: 2024-06-11T08:29:49.225906
License: Public Domain

McNamee, J.
(dissenting). Anna Gaddis had a deposit of about $7,000 in the Hudson City Savings Institution, herein called the savings bank, on April 1, 1936. She held an ordinary savings bank passbook showing the balance due her, and containing the usual printed rules and contract. There was presented to the savings bank on May 7, 1935, a withdrawal “ receipt ” for $5,000, purporting to be signed by Anna Gaddis, with her mark; the savings bank thereupon drew its draft to her order for that amount on the defendant First National Bank, with which it kept a deposit, and debited the Gaddis account accordingly on its own books. The withdrawal item was not entered in the Gaddis passbook.
This draft bearing the purported indorsement of Anna Gaddis by her mark, was indorsed by the defendant White and was deposited in the Farmers Bank by him to his credit, on May 9, 1935. Thereupon the Farmers Bank indorsed the draft and presented it to the First National Bank, where it was paid to the Farmers.
On October 24, 1935, Anna Gaddis made a demand on the savings bank for the full amount of her deposit and payment thereof was refused, except a balance of about $2,000; and on the same day she brought an action on her deposit against the savings bank, by the service of a summons only, with notice of the amount claimed.
On the 16th day of November, 1935, the savings bank wrote a letter to the Farmers Bank, and referred to the $5,000 draft, and its course up to the time of its payment by the First National, and stated that it had been sued by Anna Gaddis for the full amount of her said deposit, and added that “ We understand that claim is made by the said Anna Gaddis that she did not endorse said draft,” and further, that “ This information is given you for the purpose of enabling you to take any proceedings which you think are desirable for your protection and the protection of the other parties interested. As soon as the complaint has been served in the action, we will send you a copy of it and we will then be pleased to discuss with you the matter of the defending of the suit, as we shall look to you for reimbursement in case said draft was illegally paid.”
*37In her complaint served December 3, 1935, Anna Gaddis alleged that no part of her deposit had been withdrawn by her or with her authority, and that the full amount thereof was owing. The savings bank interposed its answer admitting the complaint, except as to the balance in its hands, and alleged four defenses: (1) That Anna Gaddis had received from the savings bank by way of withdrawal from her account a draft for $5,000, upon the presentation of her passbook; that the savings bank had delivered its draft to her order on the First National Bank for that amount; that she had received the money from the Farmers Bank; and that it was paid by the First National Bank (there was no claim that the savings bank had paid the draft, and in fact it did not pay it); (2) that it was the practice of Anna Gaddis to have Mrs. Haner present her book and make withdrawals, and that the savings bank had exercised due care; (3) that Anna Gaddis was negligent in permitting Mrs. Haner to have possession of her passbook and withdraw funds; and (4) that the passbook is the depositor’s voucher for the payment of items entered therein, and that the bank was justified in making payments to those who present the passbook.
Copies of the complaint and answer were forwarded by the savings bank to the Farmers Bank.
In brief, Anna Gaddis made claim for her deposit; and the savings bank presented affirmatively the issues that she had been paid, was guilty of negligence, and was bound by the use of her passbook and the entries therein. Only in the letter is there found any reference to possible irregularity; and that, when it stated, “We understand that claim is made by the said Anna Gaddis that she did not endorse said draft.” This letter was written before the complaint was served. The pleadings in that action created no issue of fraud, nor of forgery, nor of improper payment by any one other than the savings bank. The clerk’s minutes of trial show that, at the close of the plaintiff’s case and at the close of all the proof, the savings bank moved for a dismissal of the complaint on the grounds of plaintiff’s negligence; and the judgment indicates the trial of no other issue. And even now, the claimed facts and circumstances leading up to the utterance of the draft by the savings bank, and its indorsement, are unknown, except as they are related in affidavits on this motion. The evidence in the savings bank action is not in the record.
In the present action the complaint and the answer of the First National allege forgery in the indorsement and collection of the draft in question at the time it was presented to the Farmers Bank. This charge is denied by the Farmers Bank in its answer. Here is the issue to be resolved in this action. But the plaintiff and the *38¡First National seek to avoid a trial of that issue, and to procure ' summary judgment, on the theory that the savings bank “ vouched in ” the Farmers Bank in the Gaddis action, and thereby bound the Farmers Bank by an adjudication of forgery in that action. As shown by the pleadings, clerk’s minutes and judgment in that action, no such issue of fraud or forgery was presented, tried or adjudged therein — even if the Farmers Bank could have been “ vouched over ” in that action, and even if the notice from the savings bank to the Farmers Bank had been timely and adequate for that purpose. In my judgment, neither assumption is sound.
It is academic that the general relation existing between a bank and its depositor is that of debtor and creditor. (Baldwin’s Bank v. Smith, 215 N. Y. 76, 82; Bank of Br. North America v. Merchants’ Nat. Bank of N. Y., 91 id. 106.) That was the only relation between the savings bank and the First National (drawer and drawee), while the former maintained its deposit with the latter. And there was no contractual relation whatever between the savings bank and the Farmers; and, therefore, the Farmers could not be liable over to the savings bank on the facts of this case. The Farmers’ responsibility was to the First National only, because it guaranteed the indorsements to the paying bank. The savings bank could not be injured by an improper payment of the Farmers or the First National, if there were one. It paid nothing, and lost nothing thereby. And in addition, the savings bank did not seek from the First National payment to it of its deposit, the $5,000 in question, and there was no refusal to pay, until June 18, 1936, long after it sought to vouch in the Farmers Bank, and months after the trial and the judgment in the Gaddis action against the savings bank. Of course, until demand for payment of its deposit, the savings bank could have no action against its drawee, the First National, and had suffered no loss. The appellant frankly admits in its brief: “ It is, of course, recognized that the Savings Institution could not have recovered in an action against the Farmers Bank. Its cause of action was against The First National Bank.” But even then demand upon the latter was essential. But whether admitted or not, the fact is plain from the relation, and the lack of it, between the banks. {General Fire Assurance Co. v. State Bank, 177 App. Div. 745, 750.)
This lack of relation between the savings bank and the Farmers Bank gives rise to the basic question before us. Although it is evident that an issue of forgery exists on the pleadings between the First National and the Farmers Bank in this action, the First National contends that the Farmers Bank may and should be denied a trial of that issue here, because it was vouched in in the Gaddis *39action by the savings bank. The savings bank could not vouch in the Fanners Bank in that action, because the Farmers Bank was not liable over to the savings bank. As before indicated, the Farmers Bank was neither hable nor interested in the Gaddis action. The doctrine of “ vouching in ” a party is one aspect of res adjudicata; and that doctrine has no application to the facts here. All of the cases in point recognize the essential element that the party to be vouched in must be liable over to the voucher. (Cohen v. Bass, Inc., 246 N. Y. 270, 278; Matter of Culver Contracting Corp. v. Humphrey, 268 id. 26, 41; New York Title & Mortgage Co. v. Title Guarantee & Trust Co., 187 App. Div. 537, 540.)
Section 193 of the Civil Practice Act is basically the modern and statutory development of the same doctrine. Whether at common law or under the statute the purpose is the same, viz., to bind the person vouched in, or brought in as a party, by the judgment to be rendered in the action. And under our statute the person sought to be brought in and bound must be liable over, at the time, to the defendant who seeks to bring him in. (Fox v. Western New York Motor Lines, Inc., 257 N. Y. 305, 307, 308; Rhynders v. Greene, 255 App. Div. 401, 403.) The theory in either instance is that the person brought in is liable over to the party who seeks to bind him by the judgment. And that the Farmers Bank was not liable to the savings bank in the Gaddis action is not open to dispute, and is conceded.
But if the Farmers Bank could be regarded as liable to the savings bank under any circumstances claimed here, the notice by which the savings bank sought to vouch in the Farmers was wholly inadequate. It was given before any issues had been framed, and even before the complaint had been served. It stated simply that the savings bank “ understood ” that Anna Gaddis “ claimed ” she did not indorse the draft; and that “ as soon as ” the complaint was served, it would “ then ” discuss a defense of the suit. When later served the pleadings created no issue in which the Farmers Bank could have any interest. They dealt only with the contractual relations between the plaintiff Gaddis and the defendant savings bank, and charges of negligence on the part of that plaintiff. This was not notice that the Farmers Bank was ultimately liable to the savings bank on the instrument in question or in that action, nor could it be regarded as an invitation to defend, or an opportunity to do so. As a matter of law, the notice was not sufficient on its face to bind the vouchee on issues thereafter to be made, issues which, when made, did not concern the vouchee.
What issues were tried in the Gaddis action does not appear from the judgment roll therein. If the trial was confined to the *40pleadings, those issues did not include forgery, or other fraud. What occurred on a trial or in an action in a court of record, is not a proper subject-matter for affidavits on which to prevent a trial or to base a final judgment in another action. The proceedings themselves are the proof. It cannot be said in this case with finality that the Gaddis action was tried and decided upon an issue of forgery. That issue was not raised by the pleadings, and several other issues were pleaded and tried, and a general verdict rendered. Even if an opposite view could be held, then a question of fact is present for trial in this case.
And finally it might be observed that the First National Bank was not a party to the Gaddis action, and did not pay to the savings bank the $5,000 in question which it had on deposit. It succeeded to no rights whatever from the savings bank, and it lost nothing by payment. The savings bank did not pay, nor was it reimbursed for the payment of the judgment against it in the Gaddis action by the plaintiff surety in this action. The same surety also insured the First National. And, of course, in any action by the plaintiff against the First National to recover because of the single loss in question, the First National had a complete defense under its surety contract against the plaintiff. But despite these considerations, the First National has permitted a judgment against it herein by consent in favor of the plaintiff, and now seeks to recover against the Farmers Bank the amount for which it has become hable to the plaintiff on its own default. When all the facts are available, there may be a question whether the First National Bank is entitled to a judgment against the Farmers Bank in any event, and without regard to the rights the plaintiff surety may have against the Farmers Bank. It well may be that a bank which has sustained a loss and has been indemnified by a surety, and has subrogated the surety to the latter’s rights, may not in its own right maintain an action for the loss against another. If for no better reason, the confusion of facts here might well persuade the Special Term to deny summary judgment.
The order denying the motion for summary judgment should be affirmed, with costs.
Crapser, J., concurs.
Order reversed on the law and facts, with costs, and the motion for summary judgment granted, with costs.