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Bank Leumi TR v. Marine Midland

Supreme Court, Appellate Term, First Department
Dec 20, 1977
93 Misc. 2d 41 (N.Y. App. Term 1977)

Opinion

December 20, 1977

Appeal from the Civil Court of the City of New York, New York County, ANTHONY J. MERCORELLA, J.

David M. Berenson and Robert Wang for appellant.

Parker Chapin Flattau Klimpl (Stephen F. Harmon and Menachem J. Kastner of counsel), for respondent.


Order entered June 8, 1977 (MERCORELLA, J.), resettling order entered May 24, 1977, insofar as appealed from, and judgment entered April 26, 1977 (MERCORELLA, J.) reversed, with $10 costs, and plaintiff's motion for summary judgment denied.

Appeal from order entered April 21, 1977 (MERCORELLA, J.) dismissed, without costs, as academic. That order was superseded by the resettled order entered June 8, 1977 granting reargument.

On this record, summary judgment in favor of plaintiff was not warranted. While we do not disagree with the proposition that a collecting bank may breach its warranty of good title (see Uniform Commercial Code, § 4-207, subd [1]) when it presents a check for payment to a payor bank carrying a forged indorsement or lacking the indorsement of the payee, and may therefore be liable to the payor bank for the latter's improper payment thereon (Uniform Commercial Code, § 4-401, subd [1]) to the detriment of its customer (Myers v First Nat. Bank of Scotia, 42 A.D.2d 657; Feldman Constr. Co. v Union Bank, 28 Cal.App.3d 731) we note the significant absence of any claim by the drawer of the checks in issue against plaintiff drawee-payor bank that there was an improper payment herein. If the proceeds of these checks did in fact reach the entity intended to receive them, though made payable to variants of that entity's name, the drawer would be precluded from recovering as against the plaintiff (Gotham-Vladimir Adv. v First Nat. City Bank, 27 A.D.2d 190, 192-193; Tonelli v Chase Manhattan Bank, 41 N.Y.2d 667, 670-671), and plaintiff, in turn, would have no cause to proceed against defendant, the collecting bank. In that event, any loss sustained would be attributable to plaintiff's voluntary decision to honor checks when its depositor's account had insufficient funds to cover them, and not to defendant's failure to secure necessary indorsements. Accordingly, factual issues remain with respect to whether the drawer has the right to set up the missing indorsements as a bar to charging his account with the amounts of the checks.

Concur: HUGHES, J.P., RICCOBONO and ASCH, JJ.


Summaries of

Bank Leumi TR v. Marine Midland

Supreme Court, Appellate Term, First Department
Dec 20, 1977
93 Misc. 2d 41 (N.Y. App. Term 1977)
Case details for

Bank Leumi TR v. Marine Midland

Case Details

Full title:BANK LEUMI TRUST COMPANY OF NEW YORK, Respondent, v. MARINE MIDLAND BANK…

Court:Supreme Court, Appellate Term, First Department

Date published: Dec 20, 1977

Citations

93 Misc. 2d 41 (N.Y. App. Term 1977)
402 N.Y.S.2d 111

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