Court Opinion

ID: 3629822
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:09:38.881311+00
Date Added: 2024-06-11T14:07:39.915299
License: Public Domain

After a most careful consideration of this case I am constrained to yield my own earlier impressions and to concur in the conclusions set forth in the opinion of Chief Judge CULLEN. This change of attitude is due to my inability to work out any theory in law or logic under which a judgment for the plaintiff could be sustained. I had thought it possible to uphold the order of the Appellate Division upon the ground that the defendant's conduct, in the issuance of the check upon which this litigation has arisen, constituted such negligence as to render it liable in tort, without reference to the rules of the law merchant. That position I have been compelled to abandon as untenable for reasons which I shall briefly state.
In the first place, the complaint is not only barren of allegations, which would tend to support that theory, but it affirmatively charges that the check was delivered to a person purporting to be Antonio Cona upon a presentation of the pass book evidencing his right to the moneys therein credited "after identification satisfactory to said defendant, to wit, to said Maynard, the teller thereof, and to F.E. Flandreau, the cashier of the defendant." If this was intended as an allegation of negligence against the defendant the pleader was singularly *Page 230 
unfortunate in his choice of language. As I read the third paragraph of the complaint, it contains an unequivocal assertion that the defendant issued the check to the person whom its officers supposed to be its depositor, after taking all the usual precautions to establish his identity. If that specific paragraph of the complaint is thus correctly interpreted, it overrides the general conclusions of law which are pleaded in the twelfth paragraph to the effect "that by reason of the premises, and through the neglect, carelessness and want of care on the part of the defendant herein" the plaintiff has been damaged, etc.
As this criticism of the complaint does not appear to have been made at the trial, it is of no present significance except as it indicates that the complaint as a whole was framed for the purpose of pleading a cause of action under the law merchant, which would be governed by the rules relating to contract by estoppel, and not by the law of torts under the head of negligence.
Waiving the form of pleading, however, and assuming, without deciding, that an action sounding in tort is a permissible and appropriate remedy in circumstances similar to those in the case at bar, I am of the opinion that the evidence in the record does not establish actionable negligence. The defendant is a savings bank with nearly seventy thousand depositors. In the nature of things these could not all be personally known to its officers. Equally impracticable would it be to search the personal history or identity of each depositor with absolute completeness and accuracy. There are, of course, a few obvious and necessary precautions which savings banks may observe without great inconvenience in their business, such as keeping a record of the signature, general description and place of residence of each depositor. The practice in that regard is so familiar, general and uniform that the courts may take judicial cognizance of it without proof. This general course was followed by the defendant in opening an account upon its book in the name of Antonio Cona, and to the record thus kept the defendant referred when *Page 231 
the pass book issued to him was presented with a request for the withdrawal of the money on deposit to his credit. This latter stage of the transaction may properly be punctuated by reference to a few circumstances which are of paramount importance in passing upon the defendant's alleged negligence. The real depositor was an Italian, and so was the impostor who applied for a withdrawal of the money. As the record discloses no details concerning the character of either signature it is fair to assume that both depositor and impostor belonged to that large class of Italians who either cannot write at all, or who write so imperfectly as to render the handwriting test of little or no value. Almost equally difficult is it to identify persons of this class by their physical characteristics, for there is a general racial resemblance in which individual peculiarities are lost to all except the most critical observers. These were the conditions under which the defendant's officers were called upon to decide whether they would grant or refuse the application for a withdrawal of the money deposited in the name of Antonio Cona. The applicant gave that as his name. He answered the "test" questions correctly, but his description did not correspond with that of the depositor. When his attention was called to this discrepancy he explained it by saying that he had given the money to his uncle, of the same name, to deposit, and that the uncle had given his own description instead of that of the nephew. When asked to produce his uncle at the bank, he explained that the uncle had gone to Italy, and that he was also intending to sail in a day or two. Was this an improbable story? In the light of the well known habits and customs of this class of persons I should say it was quite probable; and if it was, the defendant's officers had the right to rely upon it, even to the extent of paying him in money. They did not do that, however, but took the precaution to give him a cashier's check which would have to be indorsed by the real depositor before the money could be lawfully obtained upon it. This circumstance is relied upon by the plaintiff to establish the defendant's negligence. The *Page 232 
learned Appellate Division have said: "That the defendant was culpably negligent cannot be doubted. The person to whom the check was delivered succeeded in doing what the defendant knew he would try to do with the means with which it supplied him." That might be quite true if the check had been delivered under circumstances clearly charging the defendant with knowledge that the person to whom the check was issued was an impostor, for then the presumption would naturally have followed that the recipient would resort to unlawful methods to have it cashed. But the facts brought to the knowledge of the bank were such that it had quite as good a right to rest upon the presumption that the check would be properly used as to suspect that it would be criminally altered (Holmes v. Trumper, 22 Mich. 427), and where that is the case culpable negligence is not predicable. In the case ofKelley v. Buffalo Savings Bank (180 N.Y. 171), where the relations between savings banks and their depositors were discussed at length, it was held that savings banks, in making payments upon depositors' accounts, are bound to exercise only ordinary care; and we there endeavored to point out the hardships which a stricter rule would entail, not merely upon the banks, but upon the thousands of poor and honest but unknown depositors who would find it extremely difficult if not quite impossible to so establish personal identity as to leave no room for doubt or mistake.
Upon the other phase of the case, which relates to the plaintiff's right to recover upon the check under the rules of the law merchant, I think Chief Judge CULLEN has demonstrated that the plaintiff cannot recover. When the plaintiff procured the check to be certified, the drawer (defendant) and prior indorsers were discharged (Neg. Ins. Law, sec. 324) and the holder (plaintiff) could thereafter look for payment only to the drawee. But even if that circumstance were not in the case the plaintiff would be no better off. When he was sued by the Oriental Bank, with which he deposited the check, he had the right to insist that the defendant here was estopped, by its conduct, from denying that the person from *Page 233 
whom he received the check was not the payee therein named. That contention would have presented an issue of fact which, if established in the plaintiff's favor, would have been a complete defense in that action. The plaintiff appears to have taken it for granted, however, that the indorsement of Antonio Cona was a forgery, and so the only issue upon which he could have successfully defended that suit seems to have gone against him by default. The result is precisely as conclusive as though it had been fully litigated and affirmatively decided against him. He cannot now litigate an issue which he was called upon to present and defend in the suit against him.
I shall not discuss the case of First National Bank v. Am.Ex. Nat. Bank (170 N.Y. 88) and the other cases relied upon by the plaintiff. As pointed out in the opinion of Chief Judge CULLEN, they rest upon principles which have no application to the case at bar.
I agree that the order of the Appellate Division should be reversed and the judgment of the Trial Term affirmed, with costs in all courts.
GRAY, WILLARD BARTLETT, HISCOCK and CHASE, JJ., concur with CULLEN, Ch. J., and WERNER, J.
Order reversed, etc.