Halsey v. Bank of New York & Trust Co.

• Decision Date: 03 March 1936
• Citation: 270 N.Y. 134,200 N.E. 671
• Parties: HALSEY et al. v. BANK OF NEW YORK & TRUST CO. et al.
• Court: New York Court of Appeals Court of Appeals

270 N.Y. 134

200 N.E. 671

HALSEY et al.

v.BANK OF NEW YORK & TRUST CO. et al.

Court of Appeals of New York.

March 3, 1936.

Action by Van Rensselaer Halsey and others against the Bank of New York & Trust Company, in which the president and directors of the Manhattan Company and others were impleaded. An order of the Special Term denying the original defendant's motion for summary judgment against the impleaded defendants was reversed by the Appellate Division (244 App. Div. 701, 279 N.Y.S. 71), which granted the motion, and the president and directors of the Manhattan Company appeal.

Judgment of the Appellate Division reversed, and order of the Special Term affirmed.

Appeal from Supreme Court, Appellate Division, First Department.

Winfred C. Allen and Raymond B. Stringham, both of New York City, for appellants.

Herbert G. Roleke, of New York City, for respondent.

FINCH, Judge.

The plaintiffs brought this action against the original defendant, Bank of New York & Trust Company, to recover the sum of $2,652.12 which it was alleged the bank had improperly charged against the account of the plaintiffs. This sum was the aggregate of certain checks made payable to the order of D. P. McAlindin. It is alleged that the depository did not pay the amount of any of the checks to the named payee. The defendant Bank of New York & Trust Company impleaded the other defendants and alleged as against them that the plaintiffs drew certain checks payable to the order of D. P. McAlindin; that the impleaded defendants indorsed and presented these checks to the Bank of New York & Trust Company for payment bearing the purported indorsements of the payee, D. P. McAlindin; and that these checks were paid. Apparently the plaintiffs have recovered a judgment for the full amount against the Bank of New York & Trust Company. There is nothing in the record regarding this but a copy of the judgment has been forwarded to the court subsequent to the argument. The defendant Bank of New York & Trust Company made a motion for summary judgment against the impleaded defendants which was denied at Special Term. The Appellate Division reversed and granted the motion. The president and directors of the Manhattan Company alone appeal.

The affidavits relied upon by the moving party may be briefly summarized. An affidavit of Charles D. Halsey, one of the plaintiffs, sets forth that the plaintiffs were stockbrokers, that the checks in question were drawn upon the defendant to the order of D. P. McAlindin and were duly signed by a partner or employee of the plaintiff firm authorized to sign said checks, and that the checks were paid by the defendant Bank of New York & Trust Company, and debited by it to the account of the plaintiffs. It goes on to state that the checks bear the purported indorsement of D. P. McAlindin, the payee, but that D. P. McAlindin did not indorse the checks nor authorize any one else to do so nor receive the proceeds of any of the checks. There are several affidavits of employees and partners of the plaintiffs, who signed the checks, stating that they believed the firm owed the amounts to D. P. McAlindin and that they signed the checks for the purpose of paying him. There is a deposition of one David Peter McAlindin, in which he denies having signed the checks, authorized another to sign them, or received the proceeds of the checks. Finally there is an affidavit of a vice president of the Bank of New York & Trust Company which alleges that in reliance upon the indorsements of the collecting banks it paid them the amounts of the checks; that it is an intermediate, innocent party; and that if it is obliged to repay the plaintiffs it is entitled to recover from the collecting banks.

The answer of the Manhattan Company alleges that the plaintiffs intended to require the drawee bank to pay these checks to the person to whom they were delivered and who indorsed them as the payee thereof. of. The affidavits submitted in opposition to the motion allege that the indorsements on the checks were not forged, that it does not appear that the David Peter McAlindin, who signed the deposition submitted by the moving party, was connected in any way with the plaintiffs or that he was intended as the payee of the checks; that one Arthur Rush, an employee of the plaintiff, maintained an account in the name of ‘D. P. McAlindin’; that the checks were indorsed by Arthur Rush, who had a right to indorse and collect the checks; and that the checks did not result in an overdrawal of the account held by Arthur Rush in the name of ‘D. P. McAlindin.’ The affidavits also allege that David Peter McAlindin is a brother-in-law of Arthur Rush.

We have already noted that the record on appeal does not contain a judgment obtained by the plaintiffs against the Bank of New York & Trust Company. Since the Bank of New York & Trust Company can have no claim over against the impleaded defendants in the absence of such a...