398. In the case of Allen v. Williamsburgh Sav. Bank, 69 N. Y. 314, the wife of a depositor had wrongfully secured possession of his pass book, forged his signature to a draft, and obtained payment from the bank. But there the bank had adopted a special by-law requiring it to use its best efforts to prevent fraud, and this was construed to bind the bank to a higher degree of care than that enjoined by the general rule. 127 N. Y. 488, 13 L. R. A. 786, 28 N. E., and promulgated by the defendant bank, and are as follows: "The secretary will endeavor to prevent frauds, but all payments made to persons producing the deposit books, or duplicates thereof, shall be good and valid payments to the depositors respectively." "On the decease of any depositor the amount standing to the credit of the deceased shall be paid to his or her legal representatives when legally demanded." In the recent case of Mahon v. South Brooklyn Sav. Inst. 175 N. Y. 69, 96 Am. St. Rep. 603, 67 N. E. 118, we had occasion to discuss the effect of these two rules; and, as bearing upon the defense that the bank had exercised due diligence in paying out money upon the account of a deceased depositor, we said: "The rule of diligence invoked by the defendant bank applies only to the case of a living depositor. When, through a depositor's carelessness, his bank book gets into the hands of a third person, who presents it to the bank, the latter may show its care and diligence in making payment to the person presenting the pass book, and thus protect itself against a second demand for It is to be observed that all of the cases above cited present instances of payments to the wrong persons during the lifetime of the depositors, and it is true that, in construing certain rules SO generally adopted by savings banks as to have acquired almost the binding force of statutes, it has been held by this court that there is a difference between the relations of a savings bank and a living depositor, on the one hand, and the relations of such a bank and the legal representatives of a deceased depositor, on the other hand. The rules referred to are among the by-laws adopted became bound by the rules. Ladd v. Augusta Sav. Bank, 96 Me. 516, 58 L. R. A. 288, 52 Atl. 1012. | pressing the depositor's agreement to abide by the regulations of the institution as expressed in the by-laws, it was decided that the power to change the by-laws did not empower the bank to change the contract which the parties had made (thus really begging the question, since the question was, What was the contract?); and authority to make such a material change in the contract, without the knowledge of the depositor, could not be inferred from her agreement to abide by the regulations of the institution. Kimins V. Boston Five Cents Sav. When, also, the depositor was present, but was not compelled to subscribe the rules, and they provided that the depositor must so subscribe and by that act be considered as assenting to the by-laws, it was held that the fact that the bank took the deposit without requiring his assent by subscribing the by-laws was not conclusive that he did not assent to them, that being only one method of assent; 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 knowledge, he must be taken to have actually assented to them, except that one which he knew was not complied with. Gifford v. Rutland Sav. Bank, 63 Vt. 108, 11 L. R. A. 794, 25 Am. St. Rep. 744, 21 Atl. 340. Where the by-laws, as contained in the deposit book given the depositor at the time of her first deposit, were later amended so as to make the responsibility of the bank for payments to fraudulent claimants less stringent, but no notice of the change was imputable to the depositor; and after the change several payments were made to a fraudulent claimant,-although the bank contended that the by-law later added became incorporated into the contract between the parties, under the general statute which provided that the deposits might be withdrawn in such manner as the by-laws directed, and under another by-law which was in force at the time of the first deposit, to the effect that changes might be made in the by-laws, and ex 242. Where a bank had a standing rule to the effect that anyone presenting a pass book should be taken to be the depositor, or to have a genuine order from him if he presented an order, and that payment to him should be good against the depositor; but there was no evidence that this rule, although one of general notoriety in regard to all the savings banks in the city, had been brought to the attention of the depositor,--this was not binding upon him, when a by-law, which undoubtedly was binding upon both parties, provided that the account should be paid to the depositor, or to his order, or to his legal representative. Eaves v. People's Sav. Bank, 27 Conn. 229, 71 Am. Dec. 59. Under the New York statute of 1875, chap. 371, § 23, a savings bank depending upon its by-laws for its defense in an action by a depositor to recover moneys paid out by it to a fraudulent claimant, must show affirmatively that it has complied with the provision of that statute directing that the bank shall put up in some conspicuous place, where its business is transacted, the regulations for payments of deposits, and that they shall be printed in the pass book; and it is not an excuse for failure to comply with the law that the regulations were printed in the pass book, when the deposit logical sequence of the finding. The language of the opinion is general and comprehensive, but of that it is enough to say that judicial discussion is to be limited to what is actually decided. People ex rel. Metropolitan Street R. Co. v. State Tax Comrs. 174 N. Y. 417, 63 L. R. A. 884, 67 N. E. 69. payment by the careless depositor. But cision reached by this court was the only the by-law which is designed to protect the bank in such a case must be read in connection with the other by-law, which provides that, after the depositor's death, payment must be made to his or her legal representatives.' This latter by-law is for the protection of the depositor, who can no longer protect himself, and therefore the bank is bound to see that payment was made to the proper person. Payment to any other person is made at the bank's peril." That case is now relied upon by the appellant. As applied to the facts there established, the language just quoted was precise and correct, because the bank had knowledge of the depositor's death, and assumed to pay out the money credited to her account to one who claimed it by virtue of an alleged gift causa mortis, which the trial court found had never been made; and the unanimous affirmance of that finding of fact by the appellate division left this court no alternative but to apply the rule there laid down. In that case the finding of faet clearly established the absence of ordinary care, and the de or did not read them. Kress v. East Side Sav. Bank, 50 N. Y. S. R. 273, 21 N. Y. Supp. 652. In the case of a savings bank organized under the Michigan general banking law, by which the profits belong to the stockholders, and not to the depositors, the by-laws of which provided that, "while the officers of this institution will do their utmost to prevent fraud, yet, as they will be unable to identify every depositor, this institution will not be responsible for loss sustained when a book has been mislaid, stolen, or lost, if, before the cashier is notified thereof, such book be paid ;" and that the owner is required to give immediate notice of the loss of the book; but there was nothing to indicate that the depositor's attention had been called to the by-laws, or that he had even read them, --it was held that the decision cited by the bank, in Maine, Massachusetts, and New York, were in regard to savings banks which were created and managed for the benefit of the depositors, instead of the stockholders, and the conditions are so unlike those in Michigan that the decisions are not controlling in that state, where the officers of the bank are the agents of the stockholders and not of the depositors, so that the relation of debtor and creditor subsisted between the bank and the depositor, and the general rule would apply that the bylaws of the corporation are binding upon none but its members and officers; hence, a by-law passed by the bank is not a by-law of a depositor, and, if the effect of it is to change the relation of the creditor to the debtor so as to relieve the obligation of the debtor to the creditor, the creditor must have his attention called to the by-law in such a way that he shall understand its effect before he is bound by it. Ackenhausen v. People's Sav. Bank. 110 Mich. 175, 33 L. R. A. 408, 64 Am. St. Rep. 338, 68 N. W. 118. In the case at bar the situation is different. While there is no direct finding to the effect that the officers of the respondent bank had no knowledge of Ellen Neville's death, that is the direct and inevitable implication of the other findings; and thus the question that remains to be discussed is whether the findings as to what the officers of the bank actually did. support the legal conclusion that they were not guilty of negligence in making payments to the persons who presented the decedent's pass book and drafts purporting to have been signed by her. The substance of the findings upon that subject is that a critical examination and comparison of the signatures on the several drafts referred to with the true signature of the b. What is a reasonable by-law. In several instances judicial decisions have been made as to the validity of the by-laws of savings banks, as affected by their reasonable ness. So in Hayden v. Brooklyn Sav. Bank, 15 Abb. Pr. N. S. 297, a regulation providing, as the by-laws usually do, that payments to persons producing the pass book should be good and valid payments to the depositor, was approved. (But in Kelly v. Emigrant Industrial Sav. Bank, 2 Daly, 227, half the court held that a by-law to the effect that "payments to persons producing the pass book shall be valid payments to discharge the bank" was void as not within the powers of a savings bank, granted by its charter.) By-laws requiring the depositor, at the time his deposit book is given him, to sign the book kept for that purpose, and providing that he shall by that act be considered as assenting to and being bound by the by-laws, and also that the bank will not be responsible for loss sustained when a depositor has not given notice that his book has been lost or stolen, if it is paid on presentment,-were sustained as reasonable and binding on the depositor, in Gifford v. Rutland Sav. Bank, 63 Vt. 108, 11 L. R. A. 794, 25 Am. St. Rep. 744, 21 Atl. 340. This is similar to the by-law held to be reasonable in LANGDALE V. CITIZENS' BANK. A more stringent rule is approved in Burrill v. Dollar Sav. Bank, 92 Pa. 134, 37 Am. Rep. 669, providing, in exact terms, that "if any person shall present a deposit book at the office of this corporation, and allege himself or herself, untruly, to be the depositor named therein, and shall thereby obtain from the officers of this corporation the amount deposited, or any part thereof, and the actual depositor shall not have given previous notice at the office of his or her book having been lost or taken from at bar was consistent with the exercise of ordinary care on the part of the defendant bank may depend upon peculiar facts which are not found in the record before us. The finding quoted in the foregoing statement of facts, to the effect that there was no such disparity or difference between the signature of said Ellen Neville upon the signature book of the defendant and the several signatures upon five checks as to create doubt or misgiving concerning the genuineness of said five signatures in the mind of a competent and reasonably careful bank officer, when presented by a person unknown to him, with the bank book, and that therefore the bank exercised due care and caution, and was not guilty decedent would have disclosed the fact comparison of the signatures in the case that the signatures on the drafts were not genuine; that the officers of the bank made no critical examination or physical comparison of the signatures on the drafts with the genuine signature of the decedent, entered and signed in the bank's signature book; and that the officers of the bank made no effort, by a critical examination or physical comparison, to ascertain the genuineness of the signatures on the drafts, or to ascertain the identity of the person presenting the same. The use of the disjunctive "or" in these find ings separates that portion of them which relates to a critical examination of the signatures from that which relates to a physical comparison thereof, and, fairly construed, they import that no physical of negligence, is really a conclusion of comparison of the signatures was made by the officers of the bank. These two findings are not necessarily inconsistent with each other, but they are so divergent as to entitle the appellant to the benefit of the one most favorable to her. Redfield Redfield, 110 N. Y. 671, 18 N. E. 373. Whether the failure to make a physical V. him or her, this corporation will not be responsible for the loss. IV. Limits of the application of the rule requiring reasonable care. a. In general. The standard of care which will determine the bank's liability for payment to a fraudulent claimant is that degree of care which persons of average prudence exercise, and not the degree of care ordinarily exercised by the bank in the conduct of its business. Brown v. Merrimack River Sav. Bank, 67 N. H. 549, 68 Am. St. Rep. 700, 39 Atl. 336. It is necessary, however, for the depositor, in an action for the amount of his deposit, to give proof of facts tending to show a failure to exercise reasonable care and prudence in disbursing the money; and where the record presents no proof of such facts upon which negligence by the bank's officials can possibly be predicated, there is no question for submission to the jury, and a nonsuit is proper. Israel v. Bowery Sav. Bank, 9 Daly, 507. en Where the plaintiff testified that she had not received the money which the defendant alleged had been drawn by her, a nonsuit was improperly allowed, since the plaintiff was titled to go to the jury on the question whether the bank had exercised proper care in making the payments alleged by it to have been made to the plaintiff, under the usual by-law providing that "the treasurer will endeavor to prevent frauds, but all payments made to persons producing the pass book shall be deemed valid payments." Fox v. Onondaga County Sav. Bank, 25 N. Y. S. R. 672, 7 N. Y. Supp. 17. If there is nothing to arouse suspicion in the appearance or demeanor of a person presenting a pass book for payment, the fact that the whole deposit is demanded at once is not, as a matter law, and not a finding of fact. It is possible that there may be special cases in which it may not be necessary for bank officers to make a physical comparison between one signature on file with a bank and another upon a draft or check presented to it for payment, but, if so, there must exist some unusual and pertinent exof law, a circumstance to cause inquiry or suspicion. Geitelsohn v. Citizens' Sav. Bank, 17 Misc. 574, 40 N. Y. Supp. 662, Reversing 17 Misc. 57, 39 N. Y. Supp. 840. b. Payment upon fraudulent claim of identity merely. In many of the earlier cases involving the liability of savings banks for payments to fraudulent claimants all the means of identification of the applicant required by the bank were, first, the possession of the bank book, and correct responses to questions put to him at the time of the payment, without any requirement that the applicant make, at the time, a signature to be compared with the true signatuure of the depositor, kept on file. In the case of illiterates, who constitute a large proportion of the customers of most savings banks, this is impossible, but the practice is now very general of demanding the signature of an unknown applicant. In Smith v. Brooklyn Sav. Bank, 101 N. Y. 58, 54 Am. Dec. 653, 4 N. E. 123, it was laid down that a pass book is not negotiable paper, and its possession, in itself, as bearing upon the question of the bank's negligence in paying a deposit, constitutes no evidence of a right to draw money upon it; it merely imports a liability of the bank to the depositor for the moneys deposited, and an agreement to repay them at such time and in such manner as he shall direct. Since that case, however, it has been declared by an inferior court, under a particular by-law, that it is error for the court to charge that possession of a bank book by a stranger constitutes no evidence of the right to draw money upon it, since this completely ignores the rule under which the deposit is received, providing that the pass book shall be the evidence of the depositor's property in the in cuse that is not discoverable in the findings now before us, tending to show that the failure to make such a comparison is not at variance with the requirements of ordinary care. We think the finding most favorable to the appellant, to wit, that the defendant made no physical comparison of the signatures upon the five drafts with the signature of Ellen Neville in the defendant's signature book, does not support the conclusion of law to the effect that the complaint should be dismissed, and for that reason the judgment herein should Vann, J., concurring: I concur for reversal, but upon a more radical ground. While the defendant stitution, and the presentation of the book shall be sufficient authority to the bank to make any payment to the holder of it. Geitelsohn v. Citizen's Sav. Bank, 17 Misc. 574, 40 N. Y. Supp. 662, Reversing 17 Misc. 57, 39 N. Y. Supp. 840. (As to matters of evidence, see infra, VI. Unless, at the time of the payment, some fact or circumstance is brought to the attention of the bank's officers calculated to excite suspicion and inquiry by an ordinarily careful person, the bank will be discharged by payment of the account of a depositor, who is personally not known to the officers of the bank and who cannot write, to a person who presents the book and answers correctly all the questions contained in the signature book. Geitelsohn V. Citizens' Sav. Bank, 17 Misc. 574, 40 N. Y. Supp. 662, Reversing 17 Misc. 57, 39 N. Y. Supp. 840. Yet it cannot be said, as a matter of law. that a bank exercised ordinary care and diligence in protecting the depositor, when the depositor could not read or write, and the teller merely asked the person presenting the book her age, whether she was married, her name, her husband's name, and where she was born; and it was held that a verdict denying that the bank exercised such reasonable care and diligence should not be disturbed. Abramowitz v. Citizens' Sav. Bank, 17 Misc. 297, 40 N. Y. Supp. 385. Where the depositor subscribed the by-laws, which provided that "the institution will not be responsible for loss sustained when a depositor has not given notice of his book being stolen or could have adopted a rule that would cover a payment made in good faith to a person in possession of the pass book of a deceased depositor, it had not done so when the payments in question were made. As its rules then stood, such a payment bound the depositor while he was alive, but did not bind his estate after he was dead, for they expressly provided that "on the decease of any depositor the amount standing to the credit of the deceased shall be paid to his or her legal representatives when legally demanded." This rule is absolute, and a part of the contract. It is the law of the case made by the parties. The language is that of the bank, and hence, if ambiguous, is to be construed in favor of the depositor, who is not responsible for the ambiguity. If we add to it, in effect, the proviso, "But payment to one presenting the pass book of a deceased depositor shall be good unless the bank has notice of the death," we make a new contract. I repeat, as applicable to the case in hand, what we recently said in another case: "This latter by-law is for the protection of the depositor, who can no longer protect himself, and therefore the bank is bound to see that payment was made to the proper person. Payment to any other person is made at the bank's peril." Mahon v. South Brooklyn Sav. Inst. 175 N. Y. 69, 72, 96 Am. St. Rep. 603, 67 N. E. 118. lost, if such book be paid in whole or in part on presentment;" and the book was stolen, and the account drawn by a person pretending to be the depositor, who had not given notice of the theft, it was held, on the one hand, a payment to the wrong person upon presentment of the book, even before notice of loss, if it were presented under such circumstances or in such a manner as would tend to excite suspicion, or put a man of ordinary prudence upon inquiry, would not exonerate the institution, whose officers should be held to the exercise of reasonable care and diligence; but, if using such care and diligence, but lacking the present means of identifying the depositor, they pay, upon presentation of the book by one apparently in the lawful possession of it as its owner, the institution has a right to rely upon the contract of the depositor safely to keep the evidence of his claim, or to make known its loss before it is presented for payment, and is accordingly not liable to the depositor for the amount of the deposit. Sullivan v. Lewiston Inst. of Savings, 56 Me. 507, 96 Am. Dec. 500. But under this rule reasonable care is not exercised by the bank when its officers make a payment to a person unknown to them, who merely presents the bank book of a depositor, when they have not in a place convenient for reference the signature of the depositor, and do not exact from the applicant a signature made at the time, for comparison, and require no further proof of identity. Ladd v. Augusta Sav. Bank, 96 Me. 516, 58 L. R. A. 288, 52 CONNECTICUT SUPREME Mary A. CHASE v. WATERBURY SAVINGS BANK, Appt. (77 Conn. 295.) 1. An assignment that the court erred 3. A regulation printed in the deposit 4. Negligence of a depositor in a sav ings bank in failing to keep his deposit book where it will not fall into the COURT OF ERRORS. fact that he also is negligent in the care which he takes of his bank book. 6. Whether or not a savings bank is negligent in failing to preserve the signatures of depositors for comparison, in paying money on forged orders without comparing the signatures, and in issuing a duplicate book without requiring adequate proof of the destruction of the original one, are questions for the jury. (November 11, 1904.) APPEAL by defendant from a judgment of the Superior Court for Litchfield County in plaintiff's favor in an action brought to recover a savings-bank deposit. Affirmed. The facts are stated in the opinion. Mr. Nathaniel R. Bronson, for appellant: Payment on presentation of the pass book was sufficient. Eaves v. People's Sav. Bank, 27 Conn. 229, 71 Am. Dec. 59; Schoenwald v. Metro hands of persons who will fraudulently with-politan Sav. Bank, 57 N. Y. 418; Levy v. draw the deposit does not relieve the bank from liability in case it is guilty of negli gence in paying out a deposit to one not authorized to receive it. 5. A depositor in a savings bank is not estopped to hold the bank re sponsible in case it negligently pays the deposit to an unauthorized person by the Atl. 1012. (As for the obligation to require a signature for comparison, see infra, IV. g. And proof that the paying teller of a savings bank personally knew the depositor, and yet paid over his account to a stranger presenting his pass book, without any inquiry, is sufficient to sustain a finding that the bank did not exercise ordinary care and caution under the circumstances, but was guilty of negligence. Geitelsohn v. Citizens' Sav. Bank, 20 Misc. 84, 45 N. Y. Supp. 90, Affirming 19 Misc. 422, 44 N. Y. Supp. 89. But it was sufficiently established, to support a verdict for a bank, that it exercised all necessary care in making a payment to one producing a pass book, upon proof by a bank officer, testifying from a book of the bank, without which witness admitted that he would not have remembered the transaction at all, that the individual answered correctly the questions put to her, and that all the formalities required in paying out the money were complied with. Hales v. Seamen's Bank, 28 App. Div. 407, 51 N. Y. Supp. 140. Franklin Sav. Bank, 117 Mass. 448; Donun v. Provident Inst. for Savings, 127 Mass. 183, 34 Am. Rep. 358; Goldrick v. Bristol County Sav. Bank, 123 Mass. 321; 5 Cyc. Law & Proc. p. 608; McCaskill v. Connecticut Sav. Bank, 60 Conn. 308, 13 L. R. A. 737, 25 Am. St. Rep. 323, 22 Atl. 568; 2 bank will endeavor to prevent fraud, but that al payments to persons producing pass books shall be valid payments to discharge the bank, when the evidence does not show any effort on the part of the bank to ascertain whether the person presenting the book was entitled to its custody, and no questions appear to have been asked, although the teller was requested to prepare the draft signed by the person to whom the payment was made, and did so, the bank assumes the obligation of ordinary care. and must employ it in all cases where a demand is made, as, for instance, by a simple test, made by an examination of the signature of the depositor, if he can write, or an interrogation as to the number of the book, or as to the residence and antecedents of the person presenting the draft, which would perhaps be a sufficient compliance with the obligation assumed by the bank, if nothing suspicious appears as a result of the examination. Cornell V. Emigrant Industrial Sav. Bank, 9 N. Y. S. R. 72. 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. Where the fraudulent applicant presents with the book a receipt or withdrawal slip signed with the name of the depositor, the care required of the bank's officials would seem naturally to be greater in proportion to the ease of verifying the applicant's claim of identity with the depositor. Under the usual by-law provisions that the payments made to any person producing the proper pass book shall be good and valid payments, the bank continues liable for the moneys deposited, if, with the exercise of ordinary care, it could have prevented the perpetration of fraud upon it by the person presenting the pass book. So where the evidence showed that there was a marked difference between the signature of the depositor in the signature book kept by |