COMMANDER-LARABEE M. CO. v. MANUFACTURERS & T. TR. CO.

Citation61 F. Supp. 341
Decision Date12 June 1945
Docket NumberCivil Action No. 2139.
PartiesCOMMANDER-LARABEE MILLING CO. v. MANUFACTURERS & TRADERS TRUST CO.
CourtUnited States District Courts. 2nd Circuit. United States District Court of Western District of New York

Saperston, McNaughtan & Saperston, of Buffalo, N. Y. (Richard H. Wile, of Buffalo, N. Y., of counsel), for plaintiff.

Babcock, Newbury & Russ, of Buffalo, N. Y. (Hugh McM. Russ, of Buffalo, N. Y., of counsel), for defendant.

KNIGHT, District Judge.

This action is brought to recover the amount of numerous checks properly drawn by plaintiff, but upon which the payee's endorsement was forged. We have previously considered this matter to some extent, and on April 9, 1945, we ordered plaintiff to serve a bill of particulars. 4 F.R.D. 296.

Defendant now moves under Rules 12(b) and (f), Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, on the complaint and the bill of particulars for an order dismissing and striking out that portion of the complaint seeking to charge the defendant with liability for payment of the plaintiff's checks on which the endorsement of the payee was forged and which were issued by plaintiff (1) on and between March 13, 1941, and June 30, 1942, and (2) on such checks issued prior to March 13, 1941, because no cause of action is stated as to the forgeries within those periods covered and therefore they were irrelevant, immaterial and impertinent.

Defendant's motion is based on Section 43 of the Negotiable Instrument Law of the State of New York (c. 87 of the Laws of 1941, Consol.Laws N.Y. c. 38), which reads:

"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, such depositor shall notify the bank that the check so paid bore such forged or unauthorized endorsement. § 2. This act shall take effect immediately."

The provisions of section 43 are not contained in the Uniform Negotiable Instruments Act, 5 Uniform Laws Annotated. Plaintiff first notified defendant of the alleged forgeries on July 7, 1944. The statute exonerates defendant from liability for any forged checks issued between March 13, 1941, and June 30, 1942, because the check vouchers admittedly had been in plaintiff's hands more than two years without any notification to defendant, as required by Section 43. Plaintiff in its brief concedes this portion of the motion, and as to this the motion is granted. (2) As to the second part of the motion, defendant claims exoneration because plaintiff received and held these check vouchers more than two years after the enactment of section 43, effective March 13, 1941, before notifying defendant that the payee's endorsement was forged. The sole issue is whether or not section 43 has any effect upon forged endorsements made prior to its effective date. Plaintiff claims to have a vested right to have a six year period in which to discover the forgeries, and that section 43 is prospective and not retrospective. The six year period of limitations was the only bar prior to the enactment of section 43. Defendant asserts that the section is analogous to a statute of limitation; that it relates only to a form of procedure or a mode of attaining rights; does not affect vested rights and that it was well within the power of the law-making body to limit the time for giving notice.

Under federal or state law the rule is that the lawmaking body body may change laws relating to limitation of actions in pending cases. 1 McKinney's Consolidated Laws (N.Y.) Statutes, Section 59; Rexford v. Knight, 11 N.Y. 308; Lang v. Lutz, 180 N.Y. 254, 73 N.E. 24; Terry v. Anderson, 95 U.S. 628, 24 L.Ed. 365; Lamb v. Powder River Live Stock Co., 8 Cir., 132 F. 434, 67 L.R.A. 558; Gilbert v. Ackerman, 159 N.Y. 118, 53 N.E. 753, 45 L.R.A. 118; People v. Wendel, 217 N.Y. 260, 111 N.E. 846, Ann.Cas.1916B, 701. But all statutes must be construed as prospective unless the language of the act clearly indicates the intent that it be retrospective, and vested rights cannot be taken away.

"As a general rule a construction of a statute which will give it a retroactive operation is not favored by the courts. Thus it is said that all statutes are presumed to furnish a rule for future action only, and a law will not receive a retroactive construction unless its language, either expressly or by necessary implication, requires that it be so construed." McKinney's, supra, Sec. 51. The Rules of Statutory Construction as to retroactive operation of statutes are set forth in Sections 51-61, and they are construed by the numerous cases cited under these sections.

"A retroactive law is invalid when it is retrospective and attempts to take away or impair rights vested under existing laws * * * or when it creates a new obligation or attaches a new disability to transactions already past." Railroad Co-op. Building & Loan Ass'n v. Boston Building Estates, 149 Misc. 349, 267 N.Y.S. 204, 206; Neild v. District of Columbia, 71 App.D.C. 306, 110 F.2d 246. The rule in the federal courts is definitely...

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4 cases
  • Housing Authority of Union City v. Commonwealth Trust Co.
    • United States
    • United States State Supreme Court (New Jersey)
    • November 25, 1957
    ...liability.' (41 N.Y.S.2d at page 839.) The Bloch case was specifically approved in Commander-Larabee Milling Co. v. Manufacturers & Traders Trust Co., D.C., 61 F.Supp. 341, 343 (W.D.N.Y.1945), where the court 'Section 43 does not by any expression make its application retroactive. No intent......
  • United States v. Gianoulis, Civ. A. No. 1218.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Delaware)
    • August 4, 1949
    ...v. St. Louis, San Fran. & Texas Ry. Co., 270 U.S. 1, 3, 46 S.Ct. 182, 70 L.Ed. 435; Commander-Larabee Milling Co. v. Manufacturers & Traders Trust Co., D.C.W.D.N.Y. 1945, 61 F.Supp. 341, 342-343; cf Cochran v. St. Paul & Tacoma Lumber Co., D.C.W.D.Wash. 1947, 73 F. Supp. 288, 289, A suit fo......
  • Van Sant v. American Express Co.
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. Western District of Pennsylvania
    • July 20, 1945
  • Billings v. East River Sav. Bank
    • United States
    • New York Supreme Court Appellate Division
    • February 2, 1970
    ...(1943); Cohen v. Manufacturers Trust Co., 144 N.Y.S.2d 366, 370, Sup.Ct.N.Y.Co.1955, Stevens, J.; Commander-Larabee M. Co. v. Manufacturers & T. Tr. Co., 61 F.Supp. 341 (W.D.N.Y.); Wm. M. Barrett, Inc. v. First Nat. Bank of Shreveport, 191 La. 945, 186 So. ...

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