New York Metro Corp. v. Chase Manhattan Bank, N.A.

• Decision Date: 16 December 1980
• Citation: 52 N.Y.2d 732,436 N.Y.S.2d 266
• Parties: , 417 N.E.2d 560 NEW YORK METRO CORPORATION, Respondent, v. CHASE MANHATTAN BANK, N. A., Appellant.
• Court: New York Court of Appeals Court of Appeals

Page 266

436 N.Y.S.2d 266

52 N.Y.2d 732, 417 N.E.2d 560

NEW YORK METRO CORPORATION, Respondent, v.CHASE MANHATTAN BANK, N. A., Appellant.

Court of Appeals of New York.

Dec. 16, 1980.

Michael J. Levin, Andrew J. Connick and Edward I. Handelman, New York City, for appellant.

Miles F. McDonald, Jesse Climenko, Robert A. Katz, Joseph J. Einhorn and Laurie A. Asch, New York City, for respondent.

OPINION OF THE COURTMEMORANDUM.

The order of the Appellate Division should be reversed, 73 A.D.2d 573, 423 N.Y.S.2d 162, with costs, and the case remitted to Supreme Court for a new trial.

In this action to impose liability on appellant bank for permitting an unauthorized withdrawal of funds from a corporate account at the direction of the corporate president, the case was defended by the bank principally on the theory that it was protected from liability under the provisions of section 9 of the Banking Law inasmuch as it had had a corporate resolution authorizing such withdrawal on file at the time of the withdrawal, although that resolution had subsequently been inadvertently destroyed.But the jury, in a special verdict, found that no such corporate resolution had been on file with the bank, thus effectively negating this defense.

There was, however, other evidence, though not extensive, from which the jury could have concluded that Mr. Schuddekopf had authority, as corporate president, to direct withdrawals from the corporate account unrelated to any specific corporate resolution.In addition to requests for a...