In Manhattan Imported Cars, Inc. v. Dime Savings Bank, 70 Misc.2d 889, 335 N.Y.S.2d 356 (App. Term 1972), Dime Savings Bank stopped payment on its "teller's check" payable to Manhattan Imported Cars and given to the bank in payment of an automobile which was then delivered to Dime Savings Bank's depositor. Citing International Firearms and Malphrus, the court held that the teller's check was delivered as the equivalent of cash, that the teller's check was Dime Savings Bank's own direct and primary obligation to Manhattan Imported Cars and that Dime Savings Bank could not resist enforcement of its contract.Summary of this case from Guaranty Federal Savings & Loan Ass'n v. Horseshoe Operating Co.
February 17, 1972
Appeal from the Civil Court of the City of New York, New York County, OLIVER C. SUTTON, J.
Mervin Roseman and Simon J. Hauser for appellant.
Arthur J. Clyne for interpleaded defendant-respondent.
Plaintiff clearly was entitled to summary judgment against defendant savings bank based on its teller's check payable to plaintiff's order and given to it in payment of an automobile, which was thereupon delivered to the bank's depositor. The teller's check, delivered as the equivalent of cash, was the bank's own direct and primary obligation to plaintiff and it could not resist enforcement of its contract in order to make a setoff or counterclaim available to its depositor ( International Firearms Co. v. Kingston Trust Co., 6 N.Y.2d 406; Malphrus v. Home Sav. Bank, 44 Misc.2d 705; Krom v. Chemical Bank N Y Trust Co., 63 Misc.2d 1060; Uniform Commercial Code, § 3-802, subd. , par. [a]). The depositor-purchaser is relegated to an action for rescission or damages with regard to her claim of fraudulent representations or breach of warranty against plaintiff.
There can be no question as to plaintiff's entitlement to interest as a matter of right for breach of the bank's contract (CPLR 5001, subd. [a]). Here, obviously, the bank had the use of these funds and plaintiff was deprived of their use.
Nor was there any ground for a finding that to allow costs to plaintiff would not be equitable under all of the circumstances (CPLR 8101; CCA, §§ 1902; 1903, subd. [b]), since the bank had stopped payment on an "affidavit for lost check", known by the bank to be false prior to the time of suit, despite which it compelled plaintiff to institute this action and contested its right to summary judgment.
The appeal from order dated May 4, 1971, should be dismissed, that order having been superseded by the order dated June 29, 1971, made upon reargument; order dated June 29, 1971, should be modified to provide that plaintiff's motion for summary judgment is granted with interest and costs and without attachment of any conditions and that the interpleader action is dismissed and, as modified, affirmed, with $10 costs to plaintiff.
Concur — STREIT, J.P., QUINN and GOLD, JJ.
Appeal from order dated May 4, 1971 dismissed, etc.