193 Misc. 681 | N.Y. Sup. Ct. | 1948
Motion by plaintiff for an order restraining defendant trust company, pending a final determination of this action, from transferring to defendant Katzenstein the dollar deposit account or securities account maintained with the trust company in Katzenstein’s name. In effect, the action, instituted in 1945, is to determine the rights of adverse claimants to the accounts. It rests upon the plaintiff’s allegation that Katzenstein orally assigned the accounts to him in 1940. Katzenstein categorically denies making the assignment.
Plaintiff, as adverse claimant, has not executed the statutory indemnity bond. Nevertheless, he contends that the restraining order or injunction prescribed by statute is not conditioned upon the execution of any such bond, and asserts, in effect, that the provision of the statute is mandatory, and that he is entitled to the restraining order or injunction as a matter of course. I do not so construe the statute.
That the purpose of the statute is to protect the bank against adverse claims to a deposit is clear (see Gendler v. Sibley State Bank, 62 P. Supp. 805, 810-811). The bank, of course, is protected, in the event of action against it by the depositor, if the statutory bond is given. So, also, if a restraining order or injunction is issued. Conceivably, the restraining order or injunction, without more, may work irreparable injury. For that reason, it would seem that the depositor is also entitled to protection, and that a restraining Order or injunction should not be issued as a matter of course, but in the exercise of discretion. Certainly, an injunction should not be issued where, as in the instant caqe, the 'third' party claim is based entirely upon the mere statement of the claimant that the deposit was orally assigned to him and the depositor, categorically denies making any such assignment.
In my opinion the provision of the statute should be read in connection-with section 893 of the' Civil Practice Act, which provides for security to be given by a party applying for an injunction where special provision therefor is not made by law. Any other construction ■ of the statute would be contrary to what appears to be the plain intention .of the Legislature to protect both the bank and the depositor. It would certainly be contrary to the general policy of the law, which is to require a bond or undertaking in order to protect the party enjoined or to preserve the status quo, as a condition for granting a
The motion is denied, unless security is given as provided in section 893 of the Civil Practice Act. Settle order.