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127 N. Y. 488, 13 L. R. A. 786, 28 N. E., and promulgated by the defendant bank, 398.

and are as follows: “The secretary will In the case of Allen v. Williamsburgh endeavor to prevent frauds, but all paySav. Bank, 69 N. Y. 314, the wife of a dements made to persons producing the depositor had wrongfully secured possession posit books, or duplicates thereof, shall be of his pass book, forged his signature to a good and valid payments to the depositors draft, and obtained payment from the respectively.” “On the decease of any debank. But there the bank had adopted a positor the amount standing to the credit special by-law requiring it to use its best of the deceased shall be paid to his or her efforts to prevent fraud, and this was con- legal representatives when legally demandstrued to bind the bank to a higher degree ed.” In the recent case of Mahon v. South of care than that enjoined by the general Brool:lyn Sav. Inst. 175 N. Y. 69, 96 Am. rule.

St. Rep. 603, 67 N. E. 118, we had ocIt is to be observed that all of the cases casion to discuss the effect of these two above cited present instances of payments rules; and, as bearing upon the defense to the wrong persons during the lifetime that the bank had exercised due diligence of the depositors, and it is true that, in in paying out money upon the account of a construing certain rules generally deceased depositor, we said: “The rule of adopted by savings banks as to have ac- diligence invoked by the defendant bank quired almost the binding force of statutes, applies only to the case of a living deposiit has been held by this court that there is tor. When, through a depositor's carea difference between the relations of a lessness, his bank book gets into the hands savings bank and a living depositor, on the of a third person, who presents it to the one hand, and the relations of such a bank bank, the latter may show its care and and the legal representatives of a deceased diligence in making payment to the person depositor, on the other hand. The rules presenting the pass book, and thus proreferred to are among the by-laws adopted tect itself against a second demand for became bound by the rules. Ladd v. Augusta / pressing the depositor's agreement to abide by Sav. Bank, 96 Me. 516, 58 L. R. A. 288, 52 Atl. the regulations of the institution as expressed 1012.

in the by-laws, it was decided that the power to When, also, the depositor was present, but change the by-laws did not empower the bank to was not compelled to subscribe the rules, and change the contract which the parties had made they provided that the depositor must so sub- (thus really begging the question, since the quesscribe and by that act be considered as as- tion was, What was the contract?); and ausenting to the by-laws, it was held that the thority to make such a material change in the fact that the bank took the deposit without contract, without the knowledge of the derequiring his assent by subscribing the by-laws positor, could not be inferred from her agreewas not conclusive that he did not assent to ment to abide by the regulations of the insti. them, that being only one method of assent; tution. Kimins Boston Tive Cents Sav. and by receiving and holding the book contain- Bank, 141 Mass. 33, 55 Am. Rep. 441, 6 N. E. ing the by-laws, of which he had actual knowl- 242. edge, he must be taken to have actually as- Where a bank had a standing rule to the sented to them, except that one which he knew effect that anyone presenting a pass book was not complied with. Gifford v. Rutland Sav. should be taken to be the depositor, or to have Bank, 63 Vt. 108, 11 L. R. A. 794, 25 Am. St. a genuine order from him if he presented an Rep. 744, 21 Atl. 340.

order, and that payment to him should be And when an illiterate depositor subscribed good against the depositor ; but there was no the by-laws, but the bank had no notice of his evidence that this rule, although one of general inability to read, it had the right to assume notoriety in regard to all the savings banks in that he had read them and knew their contents, the city, had been brought to the attention of and he was bound by them, as was his legal the depositor,--this was not binding upon him, representative after his death. Donlan

when a by-law, which undoubtedly was bind. Provident Inst. for Savings, 127 Mass. 183, 34 ing upon both parties, provided that the acAm. Rep. 358.

count should be paid to the depositor, or to his Where the by-laws, as contained in the de- order, or to his legal representative. Eaves v. posit book given the depositor at the time of her People's Sav. Bank, 27 Conn. 229, 71 Am. Dec. first deposit, were later amended so as to make 59. the responsibility of the bank for payments to Under the New York statute of 1875, clap. fraudulent claimants less stringent, but no no- 371, $ 23, a savings bank depending upon its tice of the change was imputable to the depos- by-laws for its defense in an action by a deitor; and after the change several payments | positor to recover moneys paid out by it to a were made to a fraudulent claimant,-although fraudulent claimant, must show affirmatively the bank contended that the by-law later added that it has complied with the provision of that became incorporated into the contract between statute directing that the bank shall put up the parties, under the general statute which in some conspicuous place, where its business provided that the deposits might be withdrawn is transacted, the regulations for payments of in such manner as the by-laws directed, and un- deposits, and that they shall be printed in the der another by-law which was in force at the pass book; and it is not an excuse for failure time of the first deposit, to the effect that to comply with the law that the regulations changes might be made in the by-laws, and ex- were printed in the pass book, when the deposit

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payment by the careless depositor. But cision reached by this court was the only the by-law which is designed to protect logical sequence of the finding. The lanthe bank in such a case must be read in guage of the opinion is general and comconnection with the other by-law, which prehensive, but of that it is enough to provides that, after the depositor's death, say that judicial discussion is to be limpayment must be made “to his or her legal ited to what is actually decided. People representatives.' This latter by-law is for ex rel. Metropolitan Street R. Co. v. State the protection of the depositor, who can no Tax Comrs. 174 N. Y. 417, 63 L. R. A. longer protect himself, and therefore the 884, 67 N. E. 69. bank is bound to see that payment was In the case at bar the situation is made to the proper person. Payment to different. While there is no direct finding any other person is made at the bank's to the effect that the officers of the peril." That case is now relied upon by spondent bank had no knowledge of Ellen the appellant. As applied to

to the facts | Neville's death, that is the direct and in. there established, the language just quoted evitable implication of the other findings; was precise and correct, because the bank and thus the question that remains to be had knowledge of the depositor's death, discussed is whether the findings as to and assumed to pay out the money credit what the officers of the bank actually did, ed to her account to one who claimed it by support the legal conclusion that they virtue of an alleged gift causa mortis, were not guilty of negligence in making which the trial court found had never payments to the persons who presented the been made; and the unanimous aflirmance decedent's pass book and drafts purporting of that finding of fact by the appellate di- to have been signed by her. The substance vision left this court no alternative but to of the findings upon that subject is that apply the rule there laid down. In that a critical examination and comparison of case the finding of faet clearly established the signatures on the several drafts rethe absence of ordinary care, and the de- | ferred to with the true signature of the


or did not read them. Kress v. East Side Sav.

b. What is a reasonable by-law. Bank, 50 N. Y. S. R. 273, 21 N. Y. Supp. 652. In the case of a savings bank organized under

In several instances judicial decisions have the Michigan general banking law, by which

been made as to the validity of the by-laws of the profits belong to the stockholders, and not savings banks, as affected by their reasonableto the depositors, the by-laws of which provided that, “while the officers of this institution will

So in Hayden v. Brooklyn Sav. Bank, 15 Abb. do their utmost to prevent fraud, yet, as they | Pr. N. S. 297, a regulation providing, as the will be unable to identify every depositor, this by-laws usually do, that payments to persons institution will not be responsible for loss sus producing the pass book should be good and tained when a book has been mislaid, stolen, valid payments to the depositor, was approved. or lost, if, before the cashier is notified thereof, (But in Kelly v. Emigrant Industrial Sav. such book be paid ;" and that the owner is re Bank, 2 Daly, 227, half the court held that a quired to give immediate notice of the loss of by-law to the effect that "payments to persons the book ; but there was nothing to indicate producing the pass book shall be valid pay. that the depositor's attention had been called ments to discharge the bank” was void as not to the by-laws, or that he had even read them,

within the powers of a savings bank. granted -it was held that the decision cited by the

by its charter.) bank, in viaine, Massachusetts, and New York,

By-laws requiring the depositor, at the time were in regard to savings banks which were

his deposit book is given him, to sign the book created and managed for the benefit of the de- kept for that purpose, and providing that he

shall by that act be considered as assenting to positors, instead of the stockholders, and the

and being bound by the by-laws, and also that conditions are so unlike those in Michigan that

the bank will not be responsible for loss susthe decisions are not controlling in that state,

tained when a depositor has not given notice where the officers of the bank are the agents of

that his book has been lost or stolen, if it is the stockholders and not of the depositors, so

paid on presentment,--were sustained as reathat the relation of debtor and creditor sub

sonable and binding on the depositor, in Gifford sisted between the bank and the depositor, v. Rutland Sav. Bank, 63 Vt. 108, 11 L. R. A. and the general rule would apply that the by- 794, 25 Am. St. Rep. 744, 21 Atl. 340. laws of the corporation are binding upon none This is similar to the by-law held to be but its members and officers; hence, a by-law reasonable in LANGDALE V. CITIZENS' BANK. passed by the bank is not a by-law of a de A more stringent rule is approved in Burrill positor, and, i? the effect of it is to change the v. Dollar Sav. Bank, 92 l'a. 134, 37 Am. Rep. relation of the creditor to the debtor so as to

669, providing, in exact terms, that "if any

the relieve the obligation of the debtor to the cred person shall present a deposit book at itor, the creditor must have his attention called

office of this corporation, and allege himself or

herself, untruly, to be the depositor named there. to the by-law in such a way that he shall under

in, and shall thereby obtain from the officers stand its effect before he is bound by it.

of this corporation the amount deposited, or Ackenhausen v. People's Sav. Bank, 110 Mich.

any part thereof, and the actual depositor shall 175, 33 L.. R. A. 408, 64 Am. St. Rep. 338, 68 not have given previous notice at the office of N. W. 118.

his or her book having been lost or taken from

decedent would have disclosed the fact comparison of the signatures in the case that the signatures on the drafts were not at bar was consistent with the exercise of genuine; that the officers of the bank ordinary care on the part of the defendmade no critical examination or physical ant bank may depend upon peculiar facts comparison of the signatures on the drafts which are not found in the record before with the genuine signature of the de- us. The finding quoted in the foregoing cedent, entered and signed in the bank's statement of facts, to the effect that there signature book; and that the officers of was no such disparity or difference bethe bank made no effort, by a critical ex-tween the signature of said Ellen Neville amination or physical comparison, to as- upon the signature book of the defendant certain the genuineness of the signatures and the several signatures upon five checks on the drafts, or to ascertain the identity as to create doubt or misgiving concernof the person presenting



It is pos

The ing the genuineness of said five signatures use of the disjunctive “or” in these find in the mind of a competent and reasonably ings separates that portion of them which careful bank officer, when presented by a relates to a critical examination of the person unknown to him, with the bank signatures from that which relates to a book, and that therefore the bank exercised physical comparison thereof, and, fairly due care and caution, and was not guilty construed, they import that no physical of negligence, is really a conclusion of comparison of the signatures was made by law, and not a finding of fact. the officers of the bank. These two find sible that there may be special cases in ings are not necessarily inconsistent with which it may not be necessary for bank each other, but they are so divergent as to officers to make a physical comparison beentitle the appellant to the benefit of the tween one signature on file with

a bank one most favorable to her. Redfield v. and another upon a draft or check preRedfield, 110 N. Y. 671, 18 N. E. 373. sented to it for payment, but, if so, there Whether the failure to make a physical must exist some unusual and pertinent exhim or her, this corporation will not be re

of law, a circumstance to cause inquiry or sussponsible for the loss.

picion. Geitelsohn v. Citizens' Sav. Bank, 17 Misc. 574, 40 N. Y. Supp. 662, Reversing 17

Misc. 57, 39 N. Y. Supp. 840. IV. Limits of the application of the rule requiring reasonable care.

b. Payment upon fraudulent claim of identity a. In general.

merely. The standard of care which will determine In many of the earlier cases involving the the bank's liability for payment to a fraudulent liability of savings banks for payments to claimant is that degree of care which persons

fraudulent claimants all the means of idenof average prudence exercise, and not the de

tification of the applicant required by the bank gree of care ordinarily exercised by the bank in were, first, the possession of the bank book, the conduct of its business. Brown v. Merri and correct responses to questions put to him mack River Sav. Bank, 07 N. H. 549, 68 Am.

at the time of the payment, without any reSt. Rep. 700, 39 Atl. 336.

quirement that the applicant make, at the time, It is necessary, however, for the depositor, a signature to be compared with the true in an action for the amount of his deposit, to sigoatuure of the depositor, kept on file. In give proof of facts tending to show a failure the case of illiterates, who constitute a large to exercise reasonable care and prudence in dis proportion of the customers of most savings bursing the money; and where the record pre-banks, this is impossible, but the practice is sents no proof of such facts upon which neg now very general of demanding the signature ligence by the bank's officials can possibly be

of an unknown applicant. predicated, there is no question for submis In Smith v. Brooklyn Sav. Bank, 101 N. Y. sion to the jury, and a nonsuit is proper.

Israel / 58, 54 Am. Dec. 653, 4 N. E. 123, it was laid v. Bowery Sav. Bank, 9 Daly, 507.

down that a pass book is not negotiable paper, Where the plaintiff testified that she had not

and its possession, in itself, as bearing upon received the money which the defendant al

the question of the bank's negligence in payleged had been drawn by her, a nousuit was im- ing a deposit, constitutes no evidence of a right properly allowed, since the plaintiff was en

to draw money upon it; it merely imports a titled to go to the jury on the question whether liability of the bank to the depositor for the the bank bad exercised proper care in making moneys deposited, and an agreement to repay the payments alleged by it to have been made

them at such time and in such manner as he to the plaintiff, under the usual by-law provid- shall direct. ing that “the treasurer will endeavor to pre

Since that case, however, it has been devent frauds, but all payments made to persons

clared by an inferior court, under a particular producing the pass book shall be deemed valid by-law, that it is error for the court to charge payments." Fox v. Onondaga County Sav.

that possession of a bank book by a stranger Bank, 25 N. Y. S. R. 672, 7 N. Y. Supp. 17.

constitutes no evidence of the right to draw If tl:ere is nothing to arouse suspicion in the money upon it, since this completely ignores appearance or demeanor of a person presenting the rule under which the deposit is received, a pass book for payment, the fact that the whole providing that the pass book shall be the evi. deposit is demanded at once is not, as a matter

dence of the depositor's property in the in

cuse that is not discoverable in the find. I could have adopted a rule that would cover ings now before us, tending to show that a payment made in good faith to a person the failure to make such a comparison is in possession of the pass book of a deceased not at variance with the requirements of depositor, it had not done so when the payordinary care. We think the finding most ments in question were made. As its rules favorable to the appellant, to wit, that the then stood, such a payment bound the de. defendant made no physical comparison of positor while he was ive, but did not the signatures upon the five drafts with bind his estate after he was dead, for they the signature of Ellen Neville in the de expressly provided that "on the decease of fendant's signature book, does not support any depositor the amount standing to the the conclusion of law to the effect that the credit of the deceased shall be paid to his complaint should be dismissed, and for or her legal representatives when legally that reason the judgment herein should demanded.” This rule is absolute, and a be reversed.

part of the contract. It is the law of the This view of the case renders it unneces- case made by the parties. The language sary to pass upon the exceptions to rulings is that of the bank, and hence, if ambiguthat may not be repeated upon another ous, is to be construed in favor of the detrial, nor upon the extent of the appellant's positor, who is not responsible for the rights in case she should

a ambiguity. If we add to it, in effect, the judgment, and it should appear that, as one proviso, "But payment to one presenting of the surviving sisters of Ellen Neville, the pass book of a deceased depositor she has already received a part of the fund shall be good unless the bank has notice of which she now seeks to get in her repre- the death,” we make a new contract. I resentative capacity.

peat, as applicable to the case in hand, The judgment herein should be reversed, what we recently said in another and a

new. trial granted, with costs to "This latter by-law is for the protection of abide the event.

the depositor, who can no longer protect

himself, and therefore the bank is bound Cullen, Ch. J., and O'Brien, Bart- to see that payment was made to the lett, Haight, and Martin, JJ., concur. proper person. Payment to

person is made at the bank's peril.” MaVann, J., concurring:

hon v. South Brooklyn Sav. Inst. 175 N. I concur for reversal, but upon a | Y. 69, 72, 96 Am. St. Rep. 603, 67 N. E. more radical ground. While the defendant | 118.



any other


stitution, and the presentation of the book shall lost, if such book be paid in whole or in part be sufficient authority to the bank to make any presentment;" and the book was stolen. payment to the holder of it. Geitelsohn v. Cit- and the account drawn by a person pretending izen's Sav. Bank, 17 Misc. 574, 40 N. Y. Supp. to be the depositor, who had not given notice of 662, Reversing 17 Misc. 57, 39 N. Y. Supp. 840. the theft,-- it was held, on the one hand, a pay. (As to matters of evidence, see infra, VI. ment to the wrong person upon presentment of

Unless, at the time of the payment, some fact the hook, even before notice of loss, if it were or circumstance is brought to the attention of presented under such circumstances or in such the bank's officers calculated to excite suspicion a manner as would tend to excite suspicion, or and inquiry by an ordinarily careful person, the put · man of ordinary prudence upon inquiry, bank will be discharged by payment of the ac- would not exonerate the institution, whose of. count of a depositor, who is personally not ficers should be held to the exercise of reasonknown to the officers of the bank and who can- able care and diligence : but, if using such care not write, to a person who presents the book and diligence, but lacking the present means of and answers correctly all the questions con- identifying the depositor, they pay, upon pretained in the signature book. Geitelsohn v. sentation of the book by one apparently in the Citizens' Sav. Bank, 17 Misc. 574, 40 N. Y. lawful possession of it as its owner, the inSupp. 662, Reversing 17 Misc. 57, 39 N. Y. stitution has a right to rely upon the conSupp. 840.

tract of the depositor safely to keep the eviYet it cannot be said, as a matter of law, dence of his claim, or to make known its loss that a bank exercised ordinary care and dili. before it is presented for payment, and is acgence in protecting the depositor, when the de- cordingly not liable to the depositor for the positor could not read or write, and the teller amount of the deposit. Sullivan v. Lewiston merely asked the person presenting the book Inst. of Savings, 56 Me. 507, 96 Am. Dec. her age, whether she was married, her name,

500. her husband's name, and where she was born ; But under this rule reasonable care is not and it was held that a verdict denying that exercised by the bank when its officers make a the bank exercised such reasonable care and payment to a person unknown to them, who diligence should not be disturbed. Abramowitz merely presents the bank book of a depositor, v. Citizens' Sav. Bank, 17 Misc. 297, 40 N. Y. when they have not in a place convenient for Supp. 383.

reference the signature of the depositor, and do Where the depositor subscribed the by-laws, not exact from the applicant a signature made which provided that “the institution will not be at the time, for comparison, and require no responsibie for loss sustained when a depositor further proof of identity.

Ladd V. Augusta has not given notice of his book being stolen er Sav. Bank, 96 Me. 516, 58 L. R. A. 288, 52




fact that he also is negligent in the care

which he takes of his bank book.

6. Whether or not a savings bank is WATERBURY SAVINGS BANK, Appt.

negligent in failing to preserve the

signatures of depositors for compari(77 Conn. 295.)

son, in paying money on forged orders with

out comparing the signatures, and in issuing 1. An assignment that the court erred a duplicate book without requiring adequate

“in charging the jury as certified to in the proof of the destruction of the original one, printed record," without pointing out thie

are questions for the jury. error complained of, raises no question which the appellate court is bound to review.

(November 11, 1904.) 2. A depositor in a savings bank, by

Accepting and using a deposit book, assenis to and is bound by the rules printed APPEAL by defendant from a judgment therein regulating the method of withdraw

of the Superior Court for Litchfield ing money.

County in plaintiff's favor in an action 3. A regulation printed in the deposit brought to recover a savings-bank deposit.

books of a savings bank, relieving Affirmed.
the bank from liability for any fraud that The facts are stated in the opinion.
may be practised on its officers in withdraw-

Mr. Nathaniel R. Bronson, for appeling money by means of forged certificates, does not relieve the bank from its duty to lant: exercise ordinary care to prevent payment Payment on presentation of the pass book to the wrong person.

was sufficient. 4. Negligence of a depositor in a sav

Eates v. People's Sav. Bank, 27 Conn. ings bank in failing to keep his de- 229, 71 Am. Dec. 59; Schoenwald v. Metroposit book where it will not fall into the hands of persons who will fraudulently with politan Sav. Bank, 57 N. Y. 418; Levy v. draw the deposit does not relieve the bank Franklin Sav. Bank, 117 Mass. 448; Donfrom liability in case it is guilty of negli-lun v. Provident Inst. for Savings, 127 Mass. gence in paying out a deposit to one not 183, 34 Am. Rep. 358; Goldrick v. Bristol authorized to receive it.

County Sav. Bank, 123 Mass. 321; 5 Cyc. 5. A depositor in a savings bank is Law & Proc. p. 608 ; McCaskill v. Connecti

not estopped to hold the bank sponsible in case it negligently pays the cut Sav. Bank, 60 Conn. 308, 13 L. R. A.

deposit to an unauthorized person by the | 737, 25 Am. St. Rep. 323, 22 Atl. 568; 2 Atl. 1012. (As for the obligation to require, bank will endeavor to prevent fraud, but that a signature for comparison, see infra, IV. g. al: payments to persons producing pass books

And proof that the paying teller of a savings shall be valid payments to discharge the bank. bank personally knew the depositor, and yet

when the evidence does not show any effort paid over his account to a stranger presenting on the part of the bank to ascertain whether his pass book, without any inquiry, is sufficient the person presenting the book was entitled to to sustain a finding that the bank did not ex its custody, and no questions appear to have ercise ordinary care and caution under the cir been asked, although the teller was requested cumstances, but guilty of negligence.

to prepare the draft signed by the person to Geitelsohn v. Citizens' Sav. Bank, 20 Misc. 84, whom the payment was made, and did so, the 45 N. Y. Supp. 90, Affirming 19 Misc. 422, 44 bank assumes the obligation of ordinary care, N. Y. Supp. 89.

and must employ it in all cases where a demand But it was sufficiently established, to support

is made, as, for instance, by a simple test, a verdict for a bank, that it exercised all nec

made by an examination of the signature of the essary care in making a payment to one pro

depositor, if he can write, or an interrogation ducing a pass book, upon proof by a bank officer,

as to the number of the book, or as to the testifying from a book of the bank, without

residence and antecedents of the person prewhich witness admitted that he would not have senting the draft, which would perhaps be a remembered the transaction at all, that the

sufficient compliance with the obligation asindividual answered correctly the questions put sumed by the bank, if nothing suspicious appears to her, and that all the formalities required in

result of the examination. Cornell paying out the money were complied with. Emigrant Industrial Sav. Bank, 9 N. Y. S. Hales v. Seamen's Bank, 28 App. Div. 407, R. 72. 51 N. Y. Supp. 140.

And, notwithstanding an agreement between

a depositor and a savings bank, contained in c. Payment upon impersonation of the depositor,

the by-laws printed in the pass book, that all combined with forgery.

payments made to any person producing the Where the fraudulent applicant presents with proper pass book shall be good and valid pay. the book a receipt or withdrawal slip signed

ments, the bank continues liable for the moneys with the name of the depositor, the care re deposited, if, with the exercise of ordinary care, quired of the bank's officials would seem nat it could have prevented the perpetration of urally to be greater in proportion to the ease fraud upon it by the person presenting the pass of verifying the applicant's claim of identity book. So where the evidence showed that there with the depositor.

was a marked difference between the signature l'nder the usual by-law provisions that the cf the depositor in the signature book kept by





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