Court Opinion

ID: 5416759
Source: CourtListenerOpinion
Date Created: 2022-01-08 16:19:16.784573+00
Date Added: 2024-06-11T08:31:03.332902
License: Public Domain

Bijur, J. (dissenting).
I dissent. This action was originally brought against the defendant Manhattan Savings Institution to recover $500 upon an assignment to that extent of a savings bank account represented by a book issued by it to one Mamie Blender-man. The impleaded defendant, Florence Blender-man, claims that the account was held in trust for her by Mamie Blenderman, who is her stepmother. It appears without contradiction that the moneys in the account were the property of Florence, and that the account had for some years prior to the transaction involved in the present suit stood in the name of “ Mamie Blenderman in trust for Florence;” that early in January, 1915, Mamie asked her stepson, Florence’s brother, to apply to the plaintiff: for a loan; that the brother “ went to inquire as to whether my stepmother could negotiate a loan with the bank for $500 * * * they [the bank] said it would be necessary to give security * * * Then I spoke of the pass-book that was in the Manhattan Savings Institution that my stepmother held in trust for my sister Florence * . * * Then he [the manager of the bank] said they could not make a loan on the book being in trust, so I made a suggestion that if the book was transferred to my stepmother’s name if the loan could be made. Mr. Kellum [the manager] said that provided the book was in my stepmother’s name and she was making the loan they could lend the money. *619That was all that day. A few days later I went to the Manhattan Savings Institution and the account was transferred from ‘ Mamie in trust for Florence ’ to ‘ Mamie Blenderman and thereafter the loan was made in due form.
Upon this state of facts I have no doubt that the Manhattan Savings Institution was warranted in changing the account from the name of “ Mamie Blenderman in trust for Florence Blenderman ’ ’ into the name of Mamie Blenderman as an individual. Wickenheiser v. Colonial Bank, 168 App. Div. 329; affd., 224 N. Y. 651. See, also, Bischoff v. Yorkville Bank, 218 N. Y. 108. The fact, however, that the Manhattan Savings Institution was justified in either changing the name of the account or as it might have been, paying the actual money to the trustee who had the legal title thereto, did not convert the trust fund into individual property of the trustee. The uncontradicted testimony of the brother of the defendant, Florence Blenderman, establishes that the plaintiff had notice that the funds were held by Mamie in trust for Florence and that Mamie was seeking a loan for her own benefit as an individual upon the security of the trust fund. We have not to decide whether there would be any infirmity in the plaintiff’s position had an application for a loan been made by or on behalf of the trustee without further circumstance or explanation. It may well be that under such circumstances the plaintiff might have been entitled to presume that the trustee would use the loan for the trust purposes. Here, however, the refusal to ifiake the loan while the account stood in a form expressing the trust indicates plaintiff’s appreciation of the fact that the loan was sought not for the benefit of the trust but for the individual purposes of the trustee. It was, therefore, to say the least, put upon inquiry as to whether the beneficiary consented to such *620use of her estate. Her testimony at the trial, which was believed, was to the effect that she had not so consented. Upon familiar principles, therefore, the claim of the plaintiff in this case was subject to the equity in favor of Florence. See, generally, First National Bank v. National Broadway Bank, 156 N. Y. 459; Rochester & C. T. R. Co. v. Paviour, 164 id. 281; Squire v. Ordemann, 194 id. 394.
In my opinion, therefore, the judgment rendered was correct and should be affirmed with costs to respondent.
Judgment reversed, with costs.