155 A.D.2d 214 | N.Y. App. Div. | 1990
OPINION OF THE COURT
The Supreme Court should have granted the motion by defendant Morgan Guaranty Trust Company of New York for summary judgment dismissing, the complaint against it since there are no factual issues presented requiring further proceedings. Indeed, what is at issue herein is a dispute between members of an Argentine family over funds which they maintained at defendant bank in the accounts of plaintiff Latallo Etablissement, a Lichtenstein corporation organized to manage these moneys. Morgan Guaranty is simply an incidental participant through no negligent or other wrongful conduct on its part.
When Latallo was created in 1982 by Martha Fació de Staudt and her husband, J. P. Guillermo Staudt, a demand deposit account and a money market account were established at Morgan Guaranty’s New York office. Martha de Staudt was made an authorized signatory, singly. While her husband was initially an authorized signatory, he was subsequently removed as such prior to the transfers that are the subject of the instant litigation and was not reinstated as a signatory until February 1, 1988. Their son, Guillermo Nicolas Staudt, who had his own business in Buenos Aires, was also an authorized signatory, singly, until February 1, 1988. Between October 15, 1987 and December 14, 1987, defendant received written instructions, ostensibly signed by Martha de Staudt, for five separate transfers of money, totaling $325,000, to certain designated transferee banks for named beneficiaries. In addition, a written instruction, also purportedly signed by Martha de Staudt and dated December 15, 1987, directed Morgan Guaranty to reduce plaintiff’s investment in its money market account to $25,000 and to credit the balance to its demand deposit account. Defendant effected the money transfers in conformity with the instructions.
On January 25, 1988, Martha de Staudt’s husband, J. P. Guillermo Staudt, visited defendant’s New York office and
Based upon the signed statement of son Guillermo, defendant informed the Argentine banks that they could release any restrictions on the accounts of Guillermo Nicolas Staudt. On January 28, 1988, Morgan Guaranty’s Vice-President Mur
In this action, plaintiff is seeking to recoup on behalf of the parents the moneys transferred by their son to his personal accounts, thereby compelling defendant, in turn, to endeavor to recover these funds from son Guillermo in Buenos Aires or wherever else he may be found. Yet, it was the parents who made the son an authorized signatory and allowed him, singly, to have uncircumscribed access to Latallo’s accounts. The fact that he may not have exercised his authority in the manner in which his parents would have preferred is hardly the concern of Morgan Guaranty. Regardless of whether or not Guillermo Nicolas Staudt, for some reason known only to himself, chose to sign his mother’s name to the written instructions instead of his own, he was still an authorized signatory in his own right. Consequently, what appears to be involved here is not the case of a stranger to an account forging the name of a proper signatory thereof but the bizarre situation of one authorized signatory forging the name of another. In the first instance, the forger has no right to the account; in the second, the forger has as much right to the account as the person whose name he signed.
The Supreme Court, in denying defendant’s motion for summary judgment dismissing the complaint, perceived unresolved questions of fact as to whether the signatures of Martha de Staudt on the written instructions were operative and whether the cash withdrawals had been ratified. However,
Plaintiff Latallo, as principal, must either ratify or repudiate the entire transaction and cannot elect to ratify only that portion advantageous to its interests (see, Marine Midland Bank v Russo Produce Co., 50 NY2d 31). After acknowledging the existence of a family dispute and removing son Guillermo as an authorized signatory, Latallo still instructed defendant to lift the freeze on the transferred funds. Plaintiff claims that it requested that Morgan Guaranty remove any restrictions on the accounts of Guillermo Nicolas Staudt because the parents did not want their son to be able to blame them for causing the disruption or collapse of his business. Thus, on the one hand, plaintiff contends that it did not ratify the withdrawals, but on the other hand, it admits that the parents authorized the unfreezing of son Guillermo’s accounts since they did not wish to damage his business. This explanation for the decision by the elder Staudts, inherently contradictory on its face, is incomprehensible except as an attempt by plaintiff to shift responsibility from the parents to the bank for the consequences of the farmer’s evident misjudgment of their son.
Further, plaintiff is not alleging that the purported forgeries might have been committed by a third unrelated party. If the signatures of Martha de Staudt were, indeed, forged, then the perpetrator was her son, an authorized signatory, and a depository bank is mandated to obey the commands of an authorized depositor (see, German Educ. Tel. Network v Bankers Trust Co., 109 AD2d 684). Certainly, plaintiff does not challenge the fact that son Guillermo was a duly authorized signatory of Latallo’s accounts or urge that more than one signature was necessary to implement the transfers. Therefore, whatever name son Guillermo signed on the written instructions, it is clear that he was empowered to direct the transfer of money, and, while his authority was still in effect,
Accordingly, defendant is entitled to summary judgment dismissing the complaint on two grounds. First, the money withdrawals were clearly ratified by plaintiff, as manifested in the letter of February 1, 1988, and, second, Guillermo Nicolas Staudt was a duly authorized signatory with whose instructions the bank was obliged to comply. It should also be noted that contrary to plaintiff’s attempt to depict forgery as the underlying subject of this litigation, it is not. Son Guillermo had authority, singly, to direct that every last penny from Latallo’s accounts be transferred elsewhere, a right generously bestowed upon him by his parents. Consequently, his purported signing of his mother’s name is not at all pertinent nor is the adequacy of Morgan Guaranty’s internal review procedures with respect to detecting forgeries and whether the bank complied with those procedures (see, Putnam Rolling Ladder Co. v Manufacturers Hanover Trust Co., 74 NY2d 340).
Therefore, the order of the Supreme Court (Herman Cahn, J.), entered on May 31, 1989, which denied defendant’s motion for summary judgment dismissing the complaint, should be reversed, on the law, and the motion granted, without costs or disbursements.
Ross, J. P., Asch, Rosenberger and Ellerin, JJ., concur.
Order, Supreme Court, New York County, entered on May 31, 1989, unanimously reversed, on the law, without costs and without disbursements, and the motion for summary judgment dismissing the complaint granted.