Court Opinion

ID: 5374866
Source: CourtListenerOpinion
Date Created: 2022-01-08 08:30:39.22791+00
Date Added: 2024-06-11T08:30:03.424040
License: Public Domain

Callahan, J.
(dissenting in part). Plaintiff’s action rested upon the theory that the defendant had knowledge of facts which would have put a reasonably careful banker on notice that the attorney in fact was guilty of irregularities. The trial court instructed the jury that defendant bank was chargeable with notice if, “with the use of ordinary care” it should have detected such irregularities. A claim of that nature placed defendant’s liability on negligent omission to perform a duty. Therefore, the case was not one where plaintiff’s right to recovery rested on the existence of bad faith or of actual knowledge by the bank that there had been a diversion of plaintiff’s property. Though the complaint pleaded breach of contract for the failure to return securities on demand, the gravamen of plaintiff’s cause of action was the negligent failure to perform such contract. Under such circumstances the negligence of plaintiff’s testator in failing to examine statements would be a bar to recovery, and plaintiff may not avoid such a defense by mere repetition of the claim of defendant’s negligence.
If the case were one like Critten v. Chemical Nat. Bank (171 N. Y. 219) wherein a bank had paid a forged instrument and was seeking to assert a set-off against its absolute liability on the basis of plaintiff’s failure to examine vouchers, a different rule would apply. Notice on the part of the bank (proof of negligence) would not be essential to establish plaintiff’s right to recover in such a case. The bank would be absolutely liable, having what amounted to a right of set-off based on the depositor’s negligence, which right would, in turn, be barred by the bank’s contributory negligence.
The court’s charge which said, in effect, that if the bank had notice of irregularities, depositor’s failure to' examine his *398statements constituted no defense, was error which requires reversal of the judgment. It is my view, however, that a new trial should be ordered. We cannot say that the failure to examine the statements was negligence as a matter of law, where, as here, a trusted but dishonest employee used skillful methods to allay testator’s suspicion, by furnishing her employer with false reports of the condition of his accounts. Under such circumstances a jury might say that plaintiff’s testator acted with reasonable care in relying on these reports. Nor can we determine the question of “ notice ” as a matter of law. Notice may be proved by'direct evidence or may be inferred or implied from circumstances. (Fidelity & Deposit Co. v. Queens County Trust Co., 226 N. Y. 225.)
As a new trial is necessary, all of the issues raised by plaintiff’s complaint must be tried over, for here there were not two claims easily separable, but a single claim the determination of which depended on the existence of notice, which, in turn, rested on cumulative events.
I vote to reverse the judgment and order a new trial.
Martiet, P. J., Uettermyer and Cohet, JJ., concur with Dore, J.; Callahaet, J., dissents in part, in opinion.
Judgment reversed, with costs, and the complaint dismissed, with costs.