Opinion
March 11, 1971
Order, Supreme Court, New York County, entered on July 30, 1970, granting defendant bank's motion for partial summary judgment to the extent of dismissing the first cause of action in plaintiff's complaint, unanimously modified on the law to the extent of granting defendant's motion to dismiss the second cause of action, as requested in its notice of motion at Special Term, except for the two above-mentioned checks as to which summary judgment was not sought, and otherwise affirmed, without costs and without disbursements. Plaintiff's predecessor maintained a checking account with defendant bank which required two signatures on checks drawn on that account. Its comptroller, over a period of several years, signed those checks, as he was authorized to do, and forged the signature of another officer. Plaintiff, claiming that it did not discover the forgeries until September, 1967, has asserted two causes of action, the first of which seeks to recover the proceeds of checks drawn between February, 1963, and September, 1966, and the second of which seeks to recover the proceeds of checks drawn thereafter. We agree with the holding of Special Term that the first cause of action is barred by the time limitation contained in subdivision (4) of section 4-406 of the Uniform Commercial Code. With regard to the second cause of action, it would appear that plaintiff suffered no loss as a result of defendant's acts. Each of the checks involved (except for two with regard to which summary judgment is not sought) was drawn to the order of Davis and was indorsed to the order of Security National Bank, "Davis Aircraft Products, Inc., Petty Cash Account". Plaintiff received the proceeds of those checks when they were paid to its account at Security. Payment on the checks by defendant was not the cause of plaintiff's loss. That was the result of manipulations with regard to plaintiff's Security account, over which defendant had no control. Since plaintiff initially received the proceeds of the checks which defendant paid, it suffered no loss which is recoverable from defendant. Moreover, under the facts of this case, it appears that, if defendant is liable to plaintiff for payment of the forged checks, then plaintiff, as payee-indorser of said checks, is liable to defendant for breach of warranty. (Uniform Commercial Code, § 3-417, subd. [1], par. [b].)
Concur — Capozzoli, J.P., McGivern, Markewich, Nunez and Kupferman, JJ.