Kenny v. Harlem Savings Bank

Giegerich, J. The plaintiff deposited moneys in the defendant savings bank but, being unable to write, could not sign in the bank’s signature book except by his mark. He later learned to write his name and then recorded his signature at the bank. Thereafter, at different times, he drew three drafts on the savings bank which he presented and which were duly paid. The last of them was presented and paid on April 22, 1907. On October 19, 1907, a draft, signed in the plaintiff’s name, was presented at the bank by one Farley, who also produced the plaintiff’s bank book and answered the test questions put to him by the paying teller. This draft was paid; and thereafter ten other drafts, similarly signed, were presented by Farley, who produced the bank book on each occasion, and were paid to him. The eleven drafts last mentioned had been forged by Farley who had got possession of the bank book without the plaintiff’s knowledge and, happening to be a native of the same town in Ireland, had been able to answer the teller’s questions concerning the plaintiff’s age, occupation and family. The eleven forged drafts were paid between October 19, 1907, and March 20, 1908. On March 22, 1908, the plaintiff discovered that his bank book was missing and at once [468] notified the bank. Farley was arrested upon the complaint of an officer of the bank and, three days later, died in the Tombs prison. The plaintiff then visited the bank again and demanded'his money, but was told that it had been paid to Farley and that the bank would not pay it over again. He had previously informed the bank that he could not produce the bank book; that it had been taken from the locked drawer in which he was accustomed to keep it. The fourteen drafts, paid as above mentioned, were received in evidence and are reproduced in the record. The signatures upon the three genuine drafts are practically alike. Those upon the eleven forged drafts are also very uniform and similar in appearance, one with another. Between the g’enuine and the forged signatures there is not the slightest similarity. The only witness for the defendant was its paying teller. He testified that he examined the signatures upon the forged drafts in each instance and compared them with the signature on record in the signature book and admitted that there was a distinct difference between the two and that, on each occasion, he was doubtful whether Farley was the depositor, but paid him upon his producing the bank book and answering the test questions which, he testified, he put to Farley in every case. At the close of the case, the trial judge directed a verdict for the plaintiff for the amount of. his deposit and interest, less all payments made both to the plaintiff and to Farley. The plaintiff’s motion to go to the jury upon the question whether or not the bank had exercised due care was denied and an exception taken. I think the court erred in directing the allowance to the bank of the payments made upon the forged drafts. I am by no means certain that the plaintiff was not entitled to the direction of a verdict for the full amount of his claim; but ho was certainly entitled to go to the jury. Where the signature to a draft is distinctly different from the signature on record in the bank and totally unlike previous signatures of the depositor, it certainly cannot be held that, as a matter of law, the bank has used due care when it pays the draft without [469] any identification of the person presenting the draft, even though the latter produces the hank hook and answers the test questions. The savings hank, unlike the ordinary hank of discount and deposit, is only liable to the depositor for a payment by mistake upon a forged draft where it has failed to exercise due care in paying away his funds. But the hank is bound to use ordinary care, and the question whether or not it has used that degree of care in any particular case necessarily depends upon the special circumstances of that case. Kelley v. Buffalo Savings Bank, 180 N. Y. 171. Where the difference between the signature upon the draft and that on record with the bank is slight and the bank book is produced and the test question satisfactorily answered, it has been held that the bank is not liable. Wall v. Emigrant Industrial Savings Bank, 64 Hun, 249; Ferguson v. Harlem Savings Bank, 43 Misc. Rep. 10. But no case has gone so far as to hold that, where there is no similarity between the signatures, the hank may escape liability, although it pay the draft without identification of the person presenting it; much less that the bank-is entitled to the direction of a verdict in its favor. It is argued that, as the teller knew that the plaintiff had only learned to write at a time subsequent to the opening of his account at the bank, it was reasonable for him to assume that the plaintiff’s handwriting would show a material change as time passed, due to a natural improvement and an increasing facility in the use of his pen. "Whatever - weight this argument might properly have if addressed to the jury in a close case, it probably would not justify the direction of a verdict in any case and certainly cannot in the case at bar, where there was an abrupt change from the unformed and laborious characters of the illiterate depositor to the quite regular and fairly formed hand of the forger. The respondent seeks to sustain the judgment upon the ground that the plaintiff did not establish a cause of action. Counsel for the defendant, when the plaintiff rested and again after both sides had rested, moved for a dismissal of the complaint upon the ground that, when the plaintiff demanded his money, the bank was not only justified but was [470] required to refuse payment under the provision of section 152 of the Banking Law (Consol. Laws, chap. 2), which forbids payment to a depositor unless his pass-book is produced at the time. The section further provides, however, that the trustees may provide, by their by-laws, for making payments in cases where pass-books are lost or cannot, for other exceptional reasons, be produced without serious inconvenience to depositors. In the present case, the bank was informed that the pass-book had been stolen from the plaintiff’s drawer and that he could not produce it, and itself, procured the arrest of the thief who had obtained possession of it and to whom it had made numerous payments, partly upon the strength of his possession of the book, nevertheless, when the plaintiff made his demand for payment he was met, not by any request for compliance with special rules or by-laws or any information that such rules or by-laws had been made by the trustees, but by a flat refusal to pay. I think his cause of action then accrued and is not affected by the provisions of the section of the Banking Law just cited. But, however this may be, and even assuming that the defendant’s motion for a dismissal of the complaint should have been granted, the argument does not justify the direction of the verdict and the consequent judgment upon the merits against the plaintiff. The judgment and order must be reversed' and a new trial ordered, with costs to appellant to abide the event. Gone, J., concurs.