Court Opinion

ID: 5373237
Source: CourtListenerOpinion
Date Created: 2022-01-08 08:22:53.189895+00
Date Added: 2024-06-11T08:30:02.416481
License: Public Domain

Dowling, J. (dissenting).
I think section 326 of the Negotiable Instruments Law was properly stricken from the answer since that section has no relation to a forged countersignature. (Matteawan Mfg. Co. v. Chemical Bank & Trust Co., 244 App. Div. 404, 414; Kleinman v. Chase National Bank, 124 Misc. 173, 175; North British & M. Ins. Co. v. Merchants’ Nat. Bank, 161 App. Div. 347, 355 [dissenting opinion].) There is no allegation in either complaint that the attention of the defendant was called to General Order 29 which was made pursuant to section 30 of the Bankruptcy Act and which order related to the deposit and withdrawal of funds in bankruptcy matters. This being the case, the only function of the countersignature on the checks in question was to authenticate the signature of the trustee, Haidt. (Fifth Ave. Bank v. F. S. S. & G. S. F. R. R. Co., 137 N. Y. 231, 240.) That Haidt signed his name to the checks as maker is not in dispute. Haidt was the agent of the United States of America. It selected him and held him out as reliable and competent to discharge the duties of his office and ordinarily the principal is bound by the acts of the agent done within the scope of the agency. (Clarkson Home v. Missouri, K. & T. R. Co., 182 N. Y. 47,57,58; Ultramares Corp. v. Touche, 255 N. Y. 170,193; Benenson v. National Surety Co., 260 N. Y. 299, 303.) Under the common law the depositor owes the duty to his bank to make a reasonably careful examination of his cancelled checks and to notify his bank within a reasonable time thereafter. The depositor here was guilty of negligence and so was the government in failing to examine the returned vouchers and to report the forgeries to the defendant, at least a jury might so find, if the defendant was free from negligence. (Morgan v. U. S. Mortgage & Trust Company, 208 N. Y. 218.) Of course, one would not expect Haidt, the trustee, to report his own forgeries to the defendant (Fidelity & Cas*423ualty Company v. Farmers National Bank, 275 N. Y. 194, 207), more the reason why the United States should have given reasonable attention to the acts of its trustee. The United States may be estopped by its neglect and inattention to inspect the said vouchers from asserting Haidt’s forgeries as a basis of relief herein. (Hanover Bank v. American Dock & Trust Company, 148 N. Y. 612, 620, 621; Nowack v. Metropiltan St. R. Co., 166 N. Y. 433, 440; Hudson Trust Company v. American Linseed Company, 232 N. Y. 350.) The defendant had a right to assume that Haidt would apply the funds which he withdrew, to their proper purposes. (Newton v. Scott, 254 App. Div. 140, 142.) The last four affirmative defenses should not have been stricken out.
All concur with Habéis, J., except Cunningham, J., not voting, and Dowling, J., who dissents and votes for modification in a separate opinion.
Present — Cunningham, Taylor, Dowling, Habéis and McCubn, JJ.
Orders reversed on the law with ten dollars costs and disbursements and motions denied, with ten dollars costs.