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(162 N.E.)

CARDOZO, C. J., and POUND, CRANE, ANDREWS, LEHMAN, KELLOGG, and

O'BRIEN, JJ., concur.

Judgments reversed, etc.

(248 N. Y. 252)

NEWHALL et al. v. LONGACRE BANK. Court of Appeals of New York. May 29, 1928. 1. Banks and banking 149-Payee of checks fraudulently uttered without consideration was not necessary party to action by drawee bank's receivers against collecting bank for proceeds.

Payee obtaining fraudulently uttered checks without consideration was not a necessary party defendant in action by receivers of drawee bank against collecting bank for proceeds thereof; drawee bank, not payee, being defendant's creditor.

2. Banks and banking 149-Burden was on collecting bank to protect itself from future litigation by making payee of fraudulently uttered checks party to action for proceeds.

Burden was on collecting bank' to protect itself from future action against it by payee of fraudulently uttered checks by making such payee a party to action against such bank by receivers of drawee bank for proceeds of checks.

ted by Miss Tefft, assuming to act this time in her capacity as treasurer of the trust company, defendant, without notice of the fraud, was enabled to collect them, and now, after notice, retains on deposit a balance of $6,843.14 of the proceeds. As far as this record shows, the bank has possession of moneys misappropriated from the trust company and deposited by a payee who gave no consideration. Defendant makes no claim of title, pleads no separate defense, nor produces any evidence tending to disprove the allegations of the complaint. It insists, as its sole argument, that, in the absence of CraggMatthews & Co. as a party defendant, no action can be maintained against it. The Trial Term supported its contention, and directed a verdict in its favor. That judgment has been modified by the Appellate Division to the extent of providing that it is not upon the merits and is without prejudice to an action against defendant in which Cragg-Matthews & Co. shall be joined as a party defendant.

[1] On the facts as disclosed by this record, the payee is not a necessary party. The presence of no other person is required finally to determine the issue. Chapman v. Forbes, 123 N. Y. 532, 544, 26 N. E. 3. The money deposited with defendant by Cragg-Matthews is shown by uncontradicted evidence to belong to the Kingston Trust Company. The payee is not defendant's creditor. The trust company is the creditor. The evidence proves

Appeal from Supreme Court, Appellate Di- that the payee never acquired title to the vision, First Department.

Action by George H. Newhall and another, receivers of the Kingston Trust Company of Kingston, R. I., against the Longacre Bank. From a judgment of the Appellate Division (221 App. Div. 837, 224 N. Y. S. 449), modifying a judgment of the Trial Term for defendant, plaintiffs appeal. Reversed, and judgment directed for plaintiffs.

Allen S. Hubbard, and Alfred M. Lindau, both of New York City, for appellants.

Oscar Lawrence, and Murray L. Jacobs, both of New York City, for respondent.

O'BRIEN, J. Maude E. Tefft was treaṣurer of the Kingston Trust Company of Kingston, R. I., of which plaintiffs are receivers. She contracted with Cragg-Matthews & Co. of New York to purchase for her personal account certain shares of stock in an oil company. Having no funds on deposit with the trust company, she drew, under a fictitious name, two checks aggregating $12,000 on that institution to the order of Cragg-Matthews & Co.

The payee did not deliver the stock to her nor give any other consideration, but deposited the checks with defendant bank for collection. Through a second fraud commit

proceeds of the checks, for the payee obtained them without consideration after the

checks had been fraudulently uttered. Stephens v. Board of Education, 79 N. Y. 183, 186, 35 Am. Rep. 511; People ex rel. Briggs v. Hanley, 226 N. Y. 453, 458, 123 N. E. 663.

[2] Nothing in the case contradicts plaintiffs' evidence. In the face of such proof, there is no defense to the action. That the bank might be held liable in some other action, if instituted against it by Cragg-Matthews, and different proof made in such an action, cannot change the conclusion that in this action plaintiffs have shown themselves to be the bank's creditors. Defendant might have protected itself from future litigation by bringing in the payee as a party defendant in the present action. Not since the service of its answer has it made an effort to do No heavier burden rests upon plaintiffs to sue the payee than rests upon defendant to make the payee a party. No adverse claimant is found, and so the bank must put the plaintiffs to their proof, and wage the contest as it can. Scheffer v. Erie County Sav. Bank, 229 N. Y. 50, 54, 127 N. E. 474. The proof has been produced, and shows that the bank owes the trust company the balance remaining on deposit.

So.

The judgment of the Appellate Division and that of the Trial Term should be reversed, and judgment directed for plaintiffs in the sum of $6,843.14, with interest from February 19, 1925, and with cost in all courts.

CARDOZO, C. J., and POUND, CRANE, ANDREWS, LEHMAN, and KELLOGG, JJ.,

concur.

Judgment accordingly.

(248 N. Y. 255)

PEOPLE v. SUGARMAN.

Court of Appeals of New York. May 29, 1928.

I. Forgery ~44 (12)—Evidence held to sustain conviction of second degree forgery.

In prosecution for forgery, evidence that defendant aided and abetted his brother and associate in falsely indorsing and uttering check sustained conviction for second degree forgery. 2. Criminal law 1159(1)-Jury's verdict is conclusive, unless material error appears on record.

Verdict of jury is conclusive, unless material error appears reviewably on the record. 3. Criminal law 662 (8)-Defendant's consent to examination of complaining witness conditionally and waiver of right to confrontation in return for adjournment of trial held binding (Code Cr. Proc. §§ 620-635; Civil Rights Law, § 12).

Defendant's consent to examination of complaining witness conditionally, under Code Cr. Proc. 88 620-635, and waiver of right to confrontation by the witness on the trial, was binding, where consent was given in return for adjournment of the case, since right to confrontation, under Civil Rights Law (Consol. Laws, c. 6), § 12, is one which may be waived.

4. Criminal law 662(8)-Right of defendant to confrontation by witness is not waived, except by strict compliance with law (Civil Rights Law, § 12).

Though fundamental right of defendant to be confronted by witnesses against him under Civil Rights Law (Consol. Laws, c. 6), § 12, may be waived, there is no waiver, except by strict compliance with the law.

5. Criminal law 662 (8)-Use of deposition of prosecuting witness after loss of exhibits attached thereto, and use of photostatic copies of exhibits in connection with deposition, held error, as outside waiver of defendant's right to confrontation (Code Cr. Proc. $$ 392, 631, 620-635; Civil Rights Law, § 12). In prosecution for forgery, in which defendant consented to conditional examination of

prosecuting witness on behalf of people, under Code Cr. Proc. §§ 620-635, and waived right of confrontation by witnesses, under Civil Rights

Law (Consol. Laws, c. 6), § 12, in return for adjournment, and in which original exhibits attached to deposition of prosecuting witness were lost, use of the deposition in evidence and of photostatic copies of some of the exhibits in connection therewith was error, under Code Cr. Proc. 631, limiting secondary evidence of depositions to certified copies, notwithstanding section 392; right to confrontation being waived only by strict compliance with law.

6. Depositions 93-Court may not permit part of deposition of state's witness to go to jury, where inability to submit entire evidence Is without defendant's fault.

Permitting incomplete deposition of state's witness on direct examination to go to jury in criminal case, where, without the fault of the defendant, the whole deposition cannot be submitted, is error.

Cardozo, C. J., dissenting.

Appeal from Supreme Court, Appellate Division, First Department.

Solomon Charles Sugarman was convicted of second degree forgery. The conviction was affirmed by the Appellate Division (222 App. Div. 726, 225 N. Y. S. 882), and defendant appeals. Reversed, and new trial ordered.

John J. Curtin, and Wesley S. Sawyer, both of New York City, for appellant.

Joab H. Banton, Dist. Atty., of New York City (Robert Daru, of New York City, of counsel), for the People.

POUND, J. The indictment charges defendant with forgery, second degree, in two counts; i. e., one, that defendant, having in his possession a check for $25,000, dated June 26, 1919, made by S. Barkin, payable to the order of George P. Smith, forged the indorsement of the name of the payee on the back thereof, and another, that he uttered the

same.

Smith, whose signature defendant is charged with having forged, was a young man, somewhat under 30 years of age at the time of the transaction complained of. He had had business transactions with defendant, who was a lawyer. He had indorsed and made notes for defendant, who claimed to be engaged in an enterprise with Smith, in connection with the purchase of war material from the United States government. Defendant asked him for $25,000.

Smith was entitled to receive $300,000 from the estate of his grandfather, under the terms of his will, on arriving at the age of 30 years. The trustees had power to advance money for his education and maintenance. They had made substantial advancements to him. He had made assignments of the fund as security for loans. Defendant testified that Smith was willing to raise $25,000 for the Wash

(162 N.E.)

Ington enterprise and agreed to assign his of the deposition the people offered 16 writinterest in his grandfather's estate as se- ten exhibits and the defendant offered 5 curity; that the assignment was drawn up written exhibits. They included the check and signed by Smith; six notes were signed described in the indictment; written indorseby Smith representing the loan in question ment thereon; the assignment of Smith's and the money was obtained from Samuel interest in his grandfather's estate; six Barkin, a money lender, who gave the check promissory notes signed in the name of therefor payable to the order of Smith. Smith representing a loan of $25,000; a letSmith denied that he signed the assignment, ter signed in the name of Smith to Barkin, or the notes, or that he indorsed the check. directing him to deliver to defendant a check The money was deposited in Sugarman's bank for the proceeds of the loan of $25,000; a account by his brother and associate Joseph concededly genuine check for the $433, "for H. Sugarman and was drawn out by checks interest and stamps" above mentioned; and signed in defendant's name by Joseph. The five exhibits offered by defendant containing interest and stamps amounted to $433. Smith the genuine signature of George P. Smith, admitted that he gave defendant his check offered for the purpose of comparison of for this amount, but says that he gave it to handwriting. The exhibits were not attached him for cash and that he was induced to add to and made a part of the deposition, but the words "interest and stamps" to carry out were filed separately with the clerk of the some purpose of defendant unconnected. with Court of General Sessions. On the trial of the forgery here charged. the case it appeared that they had been lost and could not be introduced as a part of Smith's deposition. Photostatic copies had been made by the district attorney of some of the exhibits, including the check and the indorsement, but not of all of them. The people's evidence tended to show the forgery of the several writings, made for the purpose of indicating that the check in question was part of a legitimate business transaction. Smith testified, in giving his deposition, that none of the people's exhibits were signed by him, except the check for $433. The deposition was used on the trial after a motion to suppress by reason of the loss of the exhibits had been made and denied and over defendant's objection.

[1, 2] The people make no claim that defendant personally forged the disputed indorsement or uttered the check. The evidence tends to establish that Joseph H. Sugarman did so, being thereto aided and abetted by defendant. The defense is that the indorsement is the genuine signature of George P. Smith, arising out of a legitimate business transaction. A question of fact was thus presented for the jury. It cannot be said that there was no evidence of defendant's guilt. The verdict is conclusive unless material error appears reviewably on the record.

[3] I think that material error does appear. The court made an order on March 21, 1924, that the case be peremptorily set down for trial on March 24, 1924, if the defendant did not file a consent that Smith, the complaining witness, be examined conditionally on behalf of the people and waive his right to confrontation by the witness on the trial. The consent was filed to obtain an adjourn ment of the trial and the deposition of Joseph H. Sugarman as a witness for the defense. The latter deposition was not obtained and Joseph was not a witness on the trial. The condition was a proper one, which defendant complied with to obtain a favor. He merely waived the right to be confronted by one of the people's witnesses. The right of confrontation is a privilege extended to the accused which he may waive. Diaz v. U. S., 223 U. S. 442, 32 S. Ct. 250, 56 L. Ed. 500, Ann. Cas. 1913C, 1138.

The deposition of Smith was taken by the people before one of the judges of the Court of General Sessions a year or more before the trial. Smith left the state and did not return. The deposition consisted of 274 pages of stenographer's minutes. On the taking

[4, 5] This, I think, was reversible error. The loss of the exhibits destroys the completeness of the deposition. The original written exhibits which were before the witness had disappeared. Their place was taken in part by photostatic copies which were not before the witness when the deposition was taken. Secondary evidence of originals, even of a forged instrument, might in ordinary course be produced on the trial of a defendant for the forgery on establishing the loss of the primary evidence. People v. Kingsley, 2 Cow. (N. Y.) 522, 525, 14 Am. Dec. 520; People v. Tilden, 242 Ill. 536, 90 N. E. 218, 31 L. R. A. (N. S.) 215, 134 Am. St. Rep. 341, 17 Ann. Cas. 496. That is not the point. While a witness may by consent of the defendant be conditionally examined on behalf of the people in the manner and with the effect provided by part 4, tit. 12, c. 3, of the Code of Criminal Procedure for taking examination of witnesses conditionally on behalf of the defendant (Code Crim. Proc. § 219), the fundamental right of the defendant to be confronted by the witnesses against him

They

nection with the photostatic copies, it does
not appear that any substantial error was
committed in the proof. The correctness of
the copies was admitted on the trial.
were not used as standards of comparison
by the witnesses. But the exception taken to
the motion to suppress the deposition by
reason of the loss of the exhibits was not

(Civil Rights Law [Consol. Laws, c. 6], § 12; People v. Bromwich, 200 N. Y. 385, 93 N. E. 933), is not waived, except by strict compliance with the law. The witness Smith did not have the photostatic copies of the documents before him and did not testify in regard thereto when his deposition was taken. The deposition may not be pieced out by extrinsic evidence of the correctness of photo-waived. It was impossible to read the whole static copies which were not before the witness and were no part of the deposition.

Secondary evidence of the exhibits in connection with the deposition was improperly received. The Code expressly limits secondary evidence of depositions to a certified copy thereof. Code Crim. Proc. § 631.

It is said that in civil cases there is no difference between lost depositions and any other written testimony, if a proper foundation is laid for their admission. Williams v. Richardson, 66 Fla. 234, 63 So. 446, Ann. Cas. 1916D, note, p. 253. "The rules of evidence in civil cases are applicable also to criminal cases, except as otherwise provided in this Code." Code Crim. Proc. § 392. But in criminal cases depositions are an innovation on the common law. It is for the people to produce either the witness or his deposition or a certified copy thereof. Section 631, supra. When the right to be confronted by the people's witnesses is waived, the waiver goes no further than the law prescribes.

[6] On the trial objections were made to the introduction in evidence of the copies. They need not be considered. Assuming the propriety of admitting the deposition in con

deposition on the trial. To suffer to go to the jury any evidence given by a witness on direct examination by the people where, without the fault of the defendant, the whole evidence cannot be submitted to it is error. People v. Cole, 43 N. Y. 508. The question is one of supreme importance. The loss of original exhibits, even after the trial, may, if the evidence is of a substantial nature require the court on appeal to grant a new trial. People v. Strollo, 191 N. Y. 42, 83 N. E. 573. As the substituted copies of the original exhibits could not be received in connection with the deposition as the equivalent of the exhibits which were before the witness, the motion to suppress should have been granted.

The judgment of the Appellate Division and that of the Court of General Sessions should be reversed, and a new trial ordered.

CRANE, ANDREWS, and O'BRIEN, JJ.,

concur.

CARDOZO, O. J., dissents.
LEHMAN and KELLOGG, JJ., not sitting.

Judgments reversed, etc.

(162 N.E.)

PIVOT CITY REALTY CO. et al. v. STATE SAVINGS & TRUST CO. et al.

(No. 13242.)

Action by the State Savings & Trust Company and others against the Pivot City Realty Company and others, wherein certain parties filed cross-complaints. From the

Appellate Court of Indiana, in Banc. April 24, judgment, defendants appeal. Affirmed.

1928.

1. Appeal and error 1039 (8)-Overruling motion to make complaint more specific held not reversible error as to defendant not harmed by such ruling.

Overruling of motion of one of defendants to make amended complaint more specific held not reversible error, where there is nothing to indicate that such defendant suffered or was harmed by reason of such ruling.

2. Appeal and error 1039 (8), 1040(10) Error, if any, in overruling individual defendants' demurrers and motion to make complaint more specific, held harmless, where final decision was in their favor.

Error, if any, in overruling motion of one of individual defendants to make second paragraph of complaint more specific or in overruling separate demurrer of both individual defendants to such paragraph was harmless, where final decision was in their favor and no

personal judgment was rendered against them, but only against corporate defendant. 3. Bills and notes

534-Allowance of $2,000 attorney's fees in action on note for $29,650 held reasonable.

In action on promissory note for $29,650, allowance of $2,000 attorney's fees held not too large, but supported by the evidence.

4. Bills and notes 534-In action on note court may properly include reasonable attor. ney's fees in judgment.

In action on a promissory note, court did not err in including in judgment amount of attorney's fees which under the evidence was reasonable.

430-Mortgages

306

5. Bills and notes Execution of renewal note held not to discharge indebtedness for which original note was given nor release security.

Where note was executed pursuant to agreement whereby it was secured by conveyance of real estate, mere fact that renewal notes were given for same debt would not release the security, and substitution of renewal note did not discharge indebtedness for which original note was given.

6. Usury 52-Two per cent. yearly commission charged by bank on sum which it agreed to loan at any time held not to render contract usurious or illegal or unfair.

Yearly commission of 2 per cent. charged by bank on $50,000, under agreement whereby it agreed to loan any sum not exceeding $50,000, held not usurious nor illegal or unfair, where commission was to compensate bank for being

at all times prepared to loan full amount and for extra work in connection with conveyances which were to secure any loans made.

Wm. V. Rooker, of Indianapolis, for ap pellants.

Michael A. Ryan, John C. Ruckelshaus, John K. Ruckelshaus, and Russell J. Ryan,' all of Indianapolis, for appellees.

THOMPSON, J. This is an action by appellee State Savings & Trust Company to recover from appellant Pivot City Realty the latter to the former. Company on a promissory note executed by

On February 18, 1916, the Pivot City Realty Company and its officers, Edwin A. Hunt and Will H. Latta, entered into a written agreement with the State Savings & Trust Company. By this agreement the State Savings & Trust Company agreed to loan to the Pivot City Realty Company, during a twoyear period, any sum not exceeding $50,000, said loan or loans to be effective for two

A

years from the time the money was advanced. Notes of the Pivot City Realty Company drawing 6 per cent. interest, payable at intervals of 90 days, and indorsed by both Latta and Hunt, were to be given for the money loaned. To secure said loans and notes warranty deeds to certain real estate to be selected by the Pivot City Realty Company were to be given to the State Savings & Trust Company and held by it as trustee. Credit was to be given up to 50 per cent. of the appraised value of the real estate. Other real estate could be substituted for that already deeded, provided the amount of the loan secured by it did not exceed 50 per cent. of the appraised value thereof, and said real estate was to be increased or decreased according to the variation in the amount of loans. commission of 2 per cent. per annum was to be charged on the $50,000, which appellee was to be ready at all times to loan appellant. The State Savings & Trust Company was to convey any real estate so held by it under said agreement to the person from whom it was received or any other person named, by warranty deed, warranting as against any acts of the trust company, but otherwise conveying only the title so received by it. Costs of making appraisements were to be paid by the Pivot City Realty Company, and abstracts of title, recording of deeds, taxes, and assessments on lands conveyed, were to be paid by the legal owners of said lands. There were two extensions of said agreement, making it effective until February 18, 1922. The last extension, however, was not signed by Hunt and Latta as individuals, but as officers of the Pivot City

Appeal from Marion Circuit Court; Harry Realty Company. O. Chamberlin, Judge.

The second paragraph of complaint, after

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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