Cohen v. Manufacturers Trust Co.

• Citation: 144 N.Y.S.2d 366
• Parties: Walter COHEN, Plaintiff, v. MANUFACTURERS TRUST COMPANY, Defendant.
• Decision Date: 05 August 1955
• Court: United States State Supreme Court (New York)

Page 366

144 N.Y.S.2d 366

Walter COHEN, Plaintiff, v. MANUFACTURERS TRUST COMPANY, Defendant.

Supreme Court, Special Term, New York County, Part I.

Aug. 5, 1955.

Carb, Luria, Glassner & Cook, New York City, for plaintiff, in opposition.

Simpson, Thacher & Bartlett, New York City, for defendant, for the motion. STEVENS, Justice.

This is a motion by defendant pursuant to rules 113 and 114 of the Rules of Civil Practice and section 476 of the Civil Practice Act for summary judgment or for partial summary judgment dismissing the complaint to the extent warranted.

This action was instituted by the service of a summons upon the defendant on March 17, 1955, to recover the proceeds of twenty nine checks on which he claims the endorsement of his name was forged. Twenty eight of these checks were drawn to the order of 'Walter Cohen', and one check was drawn to the order of 'Walter Cohen or Cash'. The endorsements on these checks were forged by the confidential bookkeeper and secretary of several corporations in which the plaintiff was interested. The first thirteen causes of action are predicated upon thirteen separate checks, each in the sum of $100, drawn to the order of the plaintiff by the 111-115 Broadway Company, Inc. upon the Title Guarantee & Trust Company dated between October 8, 1948, and February 4, 1949. All of these checks bearing the purported endorsement of the plaintiff were deposited by William Holzman & Co. in the latter's account in the defendant bank for collection. The defendant, the collecting bank, presented the checks to the drawee bank, the Title Guarantee & Trust Company, and collected the proceeds which it credited to its depositor's account. The plaintiff, the payee, admits that all of these thirteen checks were collected by the defendant bank prior to February 8, 1949. As to these thirteen causes, the defendant raises the defense of the Statute of Limitations. It argues that more than six years have elapsed since their alleged accrual and consequently, no recovery may be had thereon.

Section 48 of the Civil Practice Act provides as follows:

'The following actions must be commenced within six years after the cause of action has accrued:

'1. An action upon a contract obligation or liability express or implied, except a judgment and except as provided by section forty-seven and section forty-seven-a.'

A cause of action upon a check by the payee against a bank other than the one on which it was drawn, which collected and paid it, is an action on contract and must be commenced within six years. Having failed to commence action on these thirteen checks within six years, the Statute of Limitations is a complete defense to any recovery with respect to the first thirteen causes of action. Henderson v. Lincoln Rochester Trust Co., 303 N.Y. 27, 100 N.E.2d 117.

The fourteen causes of action numbered 'Eighteenth' to 'Thirty-first' inclusive are based upon fourteen separate checks drawn by Charles F. Noyes Co., Inc., on the defendant bank and payable to the order of the plaintiff. In each the plaintiff, as payee, is suing the defendant as the drawee bank. On each, the endorsement of the payee was forged by the employee. In these fourteen causes of action, plaintiff would have been entitled to recover in an action for conversion commenced before the three year period of limitations had run. Spaulding v. First National Bank, 210 App.Div. 216, 205 N.Y.S. 492, affirmed 239 N.Y. 586, 147 N.E. 206; Henderson v. Lincoln Rochester Trust Company, 303 N.Y. 27, 100 N.E.2d 117. Since the plaintiff admits that all fourteen checks were paid by the defendant bank prior to June 30, 1951, and since more than three years have elapsed, the defense of the Statute of Limitations applies, summary judgment must be granted with respect thereto.

The remaining four causes of action numbered 'Fourteenth' to 'Seventeenth', inclusive, are based upon two checks, one in the sum of $498.50, dated February 17, 1953, payable to the order of Walter Cohen or Cash, and drawn by plaintiff; the second in the sum of $49, dated July 24, 1953, payable to Walter Cohen, and drawn by him. Defendant bank, in its answer with respect to the check for $498.50, interposes the defense that plaintiff failed to give notice of the forged endorsement, as required by Section 43 of the Negotiable Instruments Law which provides:

' § 43. Forged or unauthorized endorsements

'No national bank or banking organization as defined in the banking law shall be liable to a depositor for the payment by it of a check bearing a forged or unauthorized endorsement unless, within two years after the return to the depositor of the voucher of such payment,...