People v. Federal Bank — 94 N.Y.S. 732

Majority

p. 732

PEOPLE v. FEDERAL BANK OF NEW YORK.

(Supreme Court, Appellate Division, First Department.

July 7, 1905.)

Headnote

Banks—Receiver—Return of Checks—Impossible Requirement.

Where petitioner, having three checks in possession against a bank, sent them to the bank for collection, and the checks were received by the bank, who deliverd to the petitioner its check on another bank to pay these checks, and the bank on which the check was drawn refused to honor it, and on the insolvency of the first bank the petitioner asked for a return of'the three checks which it had presented for payment and in payment of which it had received the check drawn by the insolvent bank, the receiver of such insolvent bank will not be ordered to deliver such checks to the petitioner when they are not in his possession, but have been returned as paid to the depositors, who drew them.

Appeal from Special Term, New York County.

Proceeding by the people against the Federal Bank of New York. The petition of the Broadway Trust Company for an order requiring Leo Schlesinger, receiver of the defendant, to deliver certain checks to petitioner was denied, and the petitioner appeals from the order denying the petition.

Affirmed.

p. 733

Argued before O’BRIEN, P. J., and McRAUGHLIN, PATTERSON, INGRAHAM, and LAUGHEIN, JJ.

S. S. Myers, for appellant.

C. E. Thorn, for respondent.

The Federal Bank, a state banking corporation, became insolvent, and on June 1, 1904, a receiver was appointed by the Supreme Court. The petitioner, a trust company ■organized under the laws of this state and doing business in the •city of New York, was, on April 14th, in possession of three checks drawn on said Federal Bank by depositors thereof, and sent these ■checks to the Federal Bank for collection. These checks were received by the Federal Bank, who delivered to the petitioner its ■check on the Importers’ & Traders’ Bank to pay these three checks. The Importers’ & Traders’ Bank refused to honor such check, whereupon the petitioner demanded of the receiver of the Federal Bank a return of the three checks which it had presented for payment and in payment of which it had received this" check drawn on the Importers’ & Traders’ Bank. The receiver having refused to -deliver these three checks to the petitioner, on February 17, 1905,■ the petitioner served a notice of' motion to require the receiver to return the three checks referred to in the petition. The receiver filed an answer to that petition, stating that the checks referred to in the petition were not, and for a long time had not been, in his possession, but had been returned by him to the several depositors upon balancing of their passbooks.

It does not appear from the petition that the three checks were in the possession of the receiver at the time the demand on him was made, but it does appear without dispute that when the motion was made the checks were not in the possession of the receiver, but had been returned by him to the depositors of the bank. Under these ■circumstances it is quite clear that the court below should not have required the receiver to deliver checks which were not in his possession, and which it was impossible for him to deliver, and for. this reason the court below properly denied the motion.

The order appealed from is therefore affirmed, with $10 costs and disbursements, but without prejudice to such proceedings as the petitioner may be advised, to obtain any relief to which it may be entitled. All concur.