Court Opinion

ID: 9568007
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:59:50.69784+00
Date Added: 2024-06-11T10:24:14.100461
License: Public Domain

Justice Carlton
dissenting.
I respectfully dissent from the majority opinion. Unlike the majority, I cannot accept the argument that the Bank restricted the assignment of passbooks only and did not thereby restrict the assignment of the corresponding accounts. I agree with the Court of Appeals that the distinction between the passbook and the underlying account, with regard to the issue of assignability, is illusory.
The majority makes much of the use of the term “Bank Book” instead of “account” or “deposits” in the Bank regulation restricting assignability and in the placement of that regulation under the heading of “Bank BOOKS.” In my opinion, the other rules and regulations printed under “Bank BOOKS” show beyond question that the “Bank Book” is tied to the account and is severable therefrom only in the event the Book is lost or stolen. For example, the Book “must be presented when money is deposited or withdrawn,” and the Bank may refuse to enter into any transaction relating to that account if the Book is not presented. Additionally, Rule 12 provides that:
A duplicate pass book will be given the depositor for the amount to his or her credit as appears from the records of the Bank, if said book is lost, destroyed or stolen or mislaid, provided satisfactory indemnity is furnished the Bank to protect it against any claim which may, at any time, be made against it by any person coming into possession of the book *548first issued. The Bank shall not be responsible for payment to any person producing the Bank Book, if the book be lost or stolen, unless and until written notice thereof shall have been given it.
These rules make clear that the sole function of the Bank Book is to represent the underlying account and that the Book has no inherent value or meaning in and of itself.
I would further argue that the headings used in the RULES And REGULATIONS are merely illustrative and were not intended to have substantive effect. The Rules are listed consecutively from 1 to 17; each new heading does not begin with Rule 1. This shows that the headings were inserted as a convenient aid to locate rules on a particular subject and not as substantive limitations on the rules themselves. Thus, tji'e placement of the rule restricting assignment under the heading “BANK BOOKS” is of no substantive significance.
A straightforward reading of the rules and regulations leads me to conclude that Rule 11 restricts the assignment of Bank Books and the corresponding accounts. To interpret this Rule as applying only to the Bank Book divorced from the funds in the underlying account is absurd. The Bank Book, in and of itself, has no inherent value to assign. Although the majority is correct in stating that an account may be validly assigned without the delivery of a passbook, citing McCabe v. Union Dime Savings Bank, 150 Misc. 157, 268 N.Y.S. 499 (1934), that case goes on to say that validity of the assignment must be determined by considering whether the failure to produce the passbook is excusable. This question is not the same as the one confronting us here. The question here is whether a provision restricting assignment of the passbook extends to the funds represented by the book. In my opinion, it does. The function of a passbook is to act as a memorandum of the account. As such, it represents the underlying funds. A provision restricting the transfer of the item which represents the funds, in my opinion, extends to the funds represented.
Justice EXUM joins in the dissenting opinion.