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GUY, J.  The motion for a reargument herein is granted. The controversy is as to whether there were two deposits, of $300 each, made by plaintiff in defendant bank, one on the 7th day of May, 1908, and the other on the 15th day of May, 1908, or whether there was but one deposit of such amount. The defendant conceded in open court that a deposit of $300 had been made by plaintiff on May 15, 1908, upon being confronted with documentary evidence in the form of a duplicate deposit slip of that date, signed by an authorized employé of the bank, with whom plaintiff testifies she left the money for deposit after banking hours. Plaintiff also introduced in evidence her bank deposit book, in which there appears an entry, under date of May 7, 1908, of another deposit of $300. The defendant denied that there was any deposit made on May 7, 1908, of any amount, claiming that the entry of a deposit of $300 on that date in plaintiff's deposit book, and a similar entry in the loose-leaf ledger kept by defendant, was erroneously made, and that said deposit was, as matter of fact, the deposit made by plaintiff after banking hours on May 15, 1908. In support of this contention, defendant introduced evidence as to the method of receiving and recording deposits which prevailed in the bank, and further evidence to the effect that during the month of May, 1908, there was no difference in the balancing of the books of the bank of an amount of $300, or thereabouts, and urged that, had plaintiff made two deposits of $300, and been credited with one such amount, of necessity the books would not have balanced, and would have shown a difference of $300. This contention of defendant is not entirely convincing, because, through an erroneous crediting of the deposit of May 7th to the account of another depositor, the books would have balanced.
Plaintiff further meets this contention of defendant by producing written evidence of her deposit in the form of a duplicate deposit slip, crediting her with a deposit of $300 as of May 7, 1908, which she testified was given to her by defendant's assistant cashier a considerable time subsequent to May 15, 1908, after the assistant cashier had communicated with the clerks in the bookkeeping department and obtained the information set forth in the duplicate deposit slip. The assistant cashier testifies that he sent the slip up to the bookkeeping department, apparently with only the name of the plaintiff depositor written thereon, and received from that department the information from which he finally made out or completed the slip which he delivered to plaintiff. When asked where the clerks in the bookkeeping department would go to get such information, he testified, although he had previously stated that he had no personal knowledge in the matter, that they would go to the teller's ledger. The clerk who received the slip in the bookkeeping department and furnished the information to the assistant cashier was not called as a witness, nor was his absence accounted for. The evidence does not disclose whether he got his information from the teller's ledger or from an inspection of an original deposit slip. The president of the bank, Mr. Warren, testified as follows:
"The modus operandi of receiving a deposit from ladies is that it goes to the receiving teller on the female side of the bank, where there is a separate
window. He receives the deposit and enters it in the passbook, and the deposit ticket is checked by an assistant, who enters it in the teller's deposit book, then the deposit ticket is sent to our bookkeeping department, which is on an upper floor, and is entered into a daily balance ledger of which there is a daily proof taken. The deposit ticket then goes to the original book of entry, known as the 'teller's ledger.' The deposit slip is then entered into a deposit book, known as the 'book of deposit entries' in the bookkeeping department, run by a third man or assistant, known as a 'debit and credit clerk.' Then it is filed away and retained in the bank records of the deposits of the day."
It is hardly conceivable that, under the system of daily balancing of books which prevails in banks, an erroneous entry in the loose-leaf ledger and in the teller's deposit book, referred to by the president of the bank, could have been made on May 15, 1908, or on the morning of May 16, 1908, erroneously crediting plaintiff with a deposit as of May 7, 1908; but, assuming that such a thing is possible, it is not credible, in the absence of further explanation, that a second error of the kind could have been committed, after the controversy had arisen as to whether there were one or two deposits, by still another clerk, on whose information the assistant cashier made out a duplicate deposit slip as of May 7th. At least the testimony of each one of the clerks connected with such erroneous entries is essential to the
proper disposition of the case. The evidence is vague and unsatisfactory as to who made the original entry in plaintiff's deposit book; the witness Witter, apparently, having merely initialed the entry with the letter "W." The clerk or assistant who made the entry in the deposit book originally should have been called as a witness, or his absence accounted for; also the clerk who kept the loose-leaf ledger and made the alleged erroneous entry in that book. No reasons were given for the failure to produce these witnesses.
[2, 3] The learned trial judge committed reversible error, which, in the light of all the evidence, was highly prejudicial to plaintiff's case, in allowing the assistant cashier, Stebbing, over plaintiff's objection. and exception, to give the following testimony:
"Q. Now, look at that book and tell me whether or not, after your recollection has been refreshed, this lady, the plaintiff, made a deposit in your bank on the 7th day of May, 1908. A. She did not."
The witness having previously testified that he had no personal knowledge or recollection whatever in connection with the transaction, and did not make any of the entries in the book, the admission of this evidence was, in effect, permitting the witness to assume the function of the jury in determining the only vital issue in the case. To properly dispose of this unfortunate controversy, it is essential that all doubt as to the actual occurrences should, as far as possible, be removed, and all material evidence produced. For this purpose a new trial is necessary.
The judgment must therefore be reversed, and a new trial ordered, with costs to the appellant to abide the event.
GAVEGAN, J., concurs.
BIJUR, J. I dissent. The question whether the defendant had sufficiently explained the error of its bookkeeping department was
submitted to the jury. Indeed, counsel agreed to submit the case without any summing up, solely on the charge of the court, to which no exception was taken. There appears, it is true, to have been a technical error committed in permitting a witness, on behalf of the defendant, to testify apparently to his conclusion that, after looking at a certain book, plaintiff had made no deposit in the bank on May 7th, and this he did, after saying that his "recollection had been refreshed" by looking at the book. But it is quite clear that, while the question was loosely put and the answer apparently improper, the witness was manifestly testifying as to the significance of bookkeeping entries, because he had already said that he had no personal knowledge of the transaction, and the next question, to which no objection was taken, was "If any deposits were made, they would appear in that book in red ink?" to which the witness answered, "Yes." My review of the testimony leads me to the conclusion that plaintiff failed to make out her case by inability or unwillingness to sufficiently identify a deposit other than the one of May 15th, and by contradictory statements in that regard.
Under such circumstances, I think that the verdict of the jury was in accordance with the evidence, and that the apparent error in the matter of testimony was negligible, and did not affect the result. I think, therefore, that the judgment should be affirmed.
(166 App. Div. 517)
GIBBS v. KNICKERBOCKER SAVINGS & LOAN CO.
(Supreme Court, Appellate Division, Second Department. March 5, 1915.) 1. BANKS AND BANKING 290-SAVINGS BANKS-PAYMENT OF OFFICIALS. Where a contract for legal services to be rendered a savings bank provided for payment of a sum which would, with the other operating expenses of the bank, exceed the statute limiting the operating expenses of such institutions to 21⁄2 per cent. of the total amount of dues actually received and credited to the members and dividends duly apportioned, plaintiff, having rendered services, may recover an amount equal to the difference between the amount limited by statute and the sum paid for other operating expenses during the year.
[Ed. Note. For other cases, see Banks and Banking, Cent. Dig. §§ 1129, 11322; Dec. Dig. 290.]
2. ASSIGNMENTS 31-WHAT CONSTITUTES.
Where plaintiff, who was an official of and attorney for a savings bank, and other officials, agreed that, in consideration of the treasurer's surrender of stock to the company for cancellation, they would out of their salaries make certain payments, and, in event their salaries did not reach a given amount, would make the payments individually, there was no assignment of plaintiff's salary, and he was the real party in interest in an action to recover compensation for services.
[Ed. Note. For other cases, see Assignments, Cent. Dig. 8 61; Dec. Dig. 31.]
3. BANKS AND BANKING 307-SAVINGS BANKS-MERGER-AGREEMENTS. Where stock of a savings bank was surrendered and canceled, so as to increase its assets, a merger agreement, approved by the superintendent For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes
of banks, who understood the way the assets were increased, is not invalid, as the result of fraud or conspiracy.
[Ed. Note. For other cases, see Banks and Banking, Cent. Dig. §§ 126, 1212; Dec. Dig. ~307.]
Appeal from Trial Term, Westchester County.
Action by Herbert H. Gibbs against the Knickerbocker Savings & Loan Company. From an order dismissing counterclaims, and directing verdict in plaintiff's favor, defendant appeals. Affirmed.
See, also, 164 App. Div. 951, 149 N. Y. Supp. 1084.
Argued before JENKS, P. J., and THOMAS, CARR, RICH, and PUTNAM, JJ.
T. A. McCarthy, of New York City, for superintendent of banks. Lee Parsons Davis, of White Plains, for respondent.
RICH, J. The plaintiff brought this action to recover $5,000 for legal services rendered the defendant, commencing February 1, 1909, and continuing for two years. His retainer is shown by a resolution of defendant's directors, adopted February 20, 1907, and read and approved by the stockholders of the company at their annual meeting. thereafter held. Second, for a balance of $1,850, alleged to be due him for services rendered defendant as its secretary from February 1, 1906, to February 1, 1910. The amended answer alleges three separate defenses to each alleged cause of action-the first being based upon the provisions of the Banking Law (Consol. Laws, c. 2), limiting the operating expenses of savings and loan companies to 212 per centum of the total amount of dues actually received and credited to its members and dividends duly apportioned and credited thereon; second, that the plaintiff is not the real party in interest; and, third, that the plaintiff, with other officers and directors of defendant, entered into and carried out a conspiracy to deceive the superintendent of banks and to defraud the defendant and its stockholders. Two counterclaims are pleaded, based upon allegations that the sum of $5,850, received by plaintiff as salary and compensation in 1906, 1907, 1908, and 1909, was obtained fraudulently and in violation of his duty as one of defendant's directors and trustees, and in violation of the provisions of the Banking Law limiting defendant's operating expenses.
The defendant was closed by the superintendent of banks on May 20, 1911. In August following, plaintiff presented his verified claims to the superintendent, who rejected them, and this action was thereupon commenced. At the close of the evidence, plaintiff's counsel moved for a direction of a verdict, and defendant asked that the complaint be dismissed. It was stipulated that the decision of the motions be made by the court, "such decision to have the same force and effect as though it were now rendered and a verdict directed to be entered accordingly."
The court later denied defendant's motions to dismiss, and granted plaintiff's motion to direct a verdict to the extent of $877.68 earned in
For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes
the year 1909, $885.98 earned in the year 1910, and $208.33 for the month of January, 1911, with interest, such amounts representing in each of said years the difference between defendant's operating expenses and said 22 per centum limitation; the defendant's liability to plaintiff exceeding such sums, but a recovery being limited thereto by the statute. Recovery sought for the years 1906, 1907, and 1908 was denied, upon the ground that in each of those years the operating expenses exceeded the statutory limitation, and, although the salary and compensation was earned and unpaid, no recovery therefor could be had. The plaintiff was also given judgment dismissing upon the merits the counterclaims set up in the amended answer. From the order and judgment accordingly entered, this appeal is taken.
[1, 2] Upon the trial the defendant contended that, inasmuch as its operating expenses for the five years covered by the transaction, considered as a whole, exceeded the statutory 22 per centum limitation, the payment or allowance of plaintiff's claimed arrears of salary and compensation would be illegal, and was prohibited by the statute. The learned trial court overruled this contention, holding that the statute did not prohibit the payment to plaintiff of an amount equal to the difference between the amount limited by the statute and a less sum paid by defendant for other operative expenses in each year in which such operating expenses were less than such limitation. This legal conclusion was correct. At the time Black, defendant's treasurer (to meet the requirement of the superintendent of banks that the assets of the Knickerbocker Company should be increased $10,000 as a condition of his approving the proposed merger of the Provident Company with it), canceled and surrendered $10,000 of the Knickerbocker Company's class C prepaid stock, owned by his mother and himself, the plaintiff, then defendant's secretary, with Molyneaux, its president, and Gerken, one of its directors, entered into an agreement with him which, after reciting the facts in a long preamble, provided:
"And the said Gerken, Molyneaux, and Gibbs, in consideration of the facts recited in the preamble hereto, and of the foregoing agreement of said Black, as well as for the benefit to them thereby accruing, do hereby covenant and agree to and with the said Black that, upon the gift and surrender of the stock as aforesaid, the salary or salaries received by them, or either of them, as officers or agents of said Knickerbocker Savings & Loan Company during the five years ensuing next after the filing of the papers in the abovementioned merger, as aforesaid, shall be immediately applied by them, and each of them, so receiving such salary or salaries, to the reimbursement of said Black, to the par value of said stock, to wit: Ten thousand dollars ($10,000) and the interest thereon at six per centum (6%) per annum from and after the filing of said papers, as aforesaid, interest computed semiannually; said Gerken, Molyneaux, and Gibbs hereby assigning said salaries, to the extent named, to said Black. And the said Gerken, Molyneaux, and Gibbs do, for the consideration aforesaid, also covenant and agree to and with the said Black that they will personally guarantee the reimbursement of said Black of said sum of ten thousand dollars ($10,000) and interest, within the said term of five years, if said sum shall not be paid from salaries as above set forth, to the extent of the sum of seventy-five hundred dollars ($7,500.00) and interest thereon, interest computed semiannually."
The defendant contends that this agreement operated to divest plaintiff of all his interest in the salary and compensation sued for, and