LeBovici v. Jamaica Sav. Bank
| Decision Date | 15 June 1981 |
| Citation | 81 A.D.2d 150,439 N.Y.S.2d 688 |
| Parties | Ronald S. LeBOVICI et al., Respondents, v. JAMAICA SAVINGS BANK, Appellant. |
| Court | New York Supreme Court — Appellate Division |
Jerry J. Limoncelli, Jamaica, for appellant.
Ronald S. LeBovici, P. C. (Louis Schaeffer, Hewlett, of counsel), respondent pro se and for respondent Tanya LeBovici.
Leopold S. Rassnick, New York City (Cullen & Dykman, William P. Tucker, Brooklyn, John P. Cuddahy and Joseph E. Kaht, New York City, of counsel), for Savings Bank Association of New York State amicus curiae.
Before RABIN, J. P., and GULOTTA, WEINSTEIN and THOMPSON, JJ.
This case raises a question of major interest to the thrift institutions in this State: whether a savings bank may refuse permission to a depositor to make a premature withdrawal of a time deposit when the account application forbids such withdrawals without the bank's permission but when the bank's policy at the time the deposit was made had been to permit such withdrawals.
In July, 1977 petitioners opened a time savings account with the bank, depositing $6,000 for a period of six years with interest at 7 3/4% per annum (compounded daily), payable at maturity. The reverse side of the time savings account application provided, inter alia, directly above petitioners' signatures, that:
At the time they opened the account, petitioners alleged, they were told by the bank officer serving them "that the bank policy has always been to permit * * * premature withdrawal provided the penalty was paid." The bank, through the officer, did not deny making the alleged statement, but the bank did specifically deny having given petitioners any indication that that policy would continue. Approximately two years after opening their account, petitioners sought to withdraw their funds. The bank denied permission. Negotiations between the parties failed, and petitioners commenced the proceeding at bar. Special Term, in granting their application, found "that this is a case where justice calls for the exercise of its powers of equitable estoppel * * * premised upon the failure of the to adequately and succinctly explain to the petitioners not only their rights but their obligations under this agreement." We disagree.
The application signed by the petitioners is a contract in which petitioners promised to leave their money on deposit for six years in consideration of the bank's promise to pay interest on the money deposited at a rate higher than the passbook rate. The terms were definitely stated. The contract formed was real, not illusory, as petitioners co...
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