Chase National Bank v. Battat

The complaint in this action, insofar as it purports to allege a cause of action against plaintiff’s depositor, is insufficient in that it fails to allege ratification by the depositor of the bank’s payment after receipt of the stop-payment order. (American Defense Society v. Sherman Nat. Bank, 225 N. Y. 506.)

Although section 213 of the Civil Practice Act is to be liberally construed the plaintiff bank should not be permitted to avail itself of the provisions of that section to sustain a defective complaint against its depositor where the result will be to involve the depositor in a lawsuit with a third party over a controversy in which the burden has been placed upon the depositor by reason of the bank’s negligence in failing to comply with its depositor’s instructions.

The order and the judgment should be affirmed, with costs to the respondents.

(dissenting). In the light of the provisions of section 213 of the Civil Practice Act, under paragraph twelfth of the complaint plaintiff may prove that the drawer of the cheek owed the money to the payee, was actually credited with payment, accepted such credit and, accordingly, ratified and was unjustly enriched.

I dissent and vote to reverse and deny the motion to dismiss.

Martin, P. J., Glennon, Callahan and Yan Yoorhis, JJ., concur in Per Curiam opinion; Dore, J., dissents in opinion.

Judgment and order affirmed, with costs.