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NEW YORK SUPPLEMENT
SPIEGEL v. PUBLIC NAT. BANK OF NEW YORK.
1. Action 38 (1)-Complaint for breach of contract to honor checks held to state single cause of action.
A complaint alleging a breach of contract by a bank to honor plaintiff's checks, though he had sufficient funds on deposit, whereby the plaintiff's credit and business reputation was injured, and he was required to pay cash for articles purchased, states a single cause of action; the allegations as to injury to reputation being allegations of special damages, not allegations of an action for libel.
2. Banks and banking 143 (4)-Special damages from breach of contract to honor checks must be pleaded.
In an action for damages to plaintiff's business reputation by defendant's breach of contract to honor his checks, injury to plaintiff's business reputation is special damage, which must be pleaded specially.
Action by Julius Spiegel against the Public National Bank of New York. On motion by defendant to require the complaint to be made more definite and certain. Motion denied.
Moses & Singer, of New York City (Sam L. Cohen, of New York City, of counsel), for the motion.
Anton Gronich, of New York City (Ira J. Schuster, of New York City, of counsel), opposed.
GIEGERICH, J. A motion is made on behalf of the defendant to require the complaint to be made more definite and certain, by reducing the same to a single cause of action either on contract or in tort, or by separately stating and numbering each cause of action.
 The complaint alleges that the plaintiff was a depositor with the defendant, and had on deposit with it certain moneys and avails of checks and commercial paper, which the defendant agreed at all times to hold for the plaintiff's credit, and to pay out by checks signed by the plaintiff when duly presented, and that in the month of July, 1920, the plaintiff drew certain checks upon the defendant, and that when the checks were presented the plaintiff had on deposit with the defendant an amount in excess of the amount of the said checks, but that, never
For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes 184 N.Y.S.-1
theless, the defendant refused payment thereof, and returned said checks to the respective banks of the several payees, after having marked on the face thereof "Check returned short," and "Not sufficient funds." It is also alleged that the plaintiff was and still is engaged in business, and had enjoyed a good reputation for paying his bills, and had obtained a good rating and credit by reason thereof, but that because of the failure of the defendant to honor the checks drawn by the plaintiff the plaintiff had suffered "in his business reputation, and his credit has been largely curtailed in that merchants with whom he deals refuse to sell him upon credit, and advise him that any further shipments made to him would be on a cash basis only." The theory on which the motion is made is that the complaint alleges one cause of action in tort, to wit, libel, and another cause of action on contract, to wit, failure to pay checks as agreed.
 The plaintiff disclaims any attempt to set forth more than one cause of action, and argues that the only cause of action set forth is one for breach of contract, with allegations of special damage flowing from the breach. I think this contention is correct. None of the characteristic allegations customary in setting forth an action for libel is found in this complaint. The facts that damage to the plaintiff's business reputation is alleged, and that his credit has been curtailed, are no more than allegations of the special damages resulting from the defendant's breach of contract, and under familiar rules of pleading it was necessary to allege such special damages. In Levine v. State Bank, 80 Misc. Rep. 524, 141 N. Y. Supp. 596, theAppellate Term held that, in an action to recover damages for a bank's refusal to pay checks drawn upon it by the plaintiff on the ground of insufficient funds, it was error to exclude evidence of the injury to the credit resulting from the defendant's breach of contract. The case of Davis v. Standard National Bank, 50 App. Div. 210, 63 N. Y. Supp. 764, is instructive in showing the form of pleading employed, where the plaintiff elected to recover damages for the nonpayment of his checks upon the theory of tort rather than upon the theory of contract.
My conclusion is that the complaint states but a single cause of action upon contract, and that the motion should be denied, with $10 Settle order on notice.
(113 Misc. Rep. 74)
HILTON v. NEW YORK LIFE INS. CO. et al.
(Supreme Court, Special Term, Erie County. September 17, 1920.)
1. Insurance 179%-Insured held owner of life policy for purposes of loan, though wife was beneficiary.
Contract is between the company and insured, and he is the owner and holder of life policy payable to his wife, relative to right to obtain loan from company on the policy, it being issued and delivered to him through his individual negotiations, he paying the premium, though with money given to him by his wife from the allowance which he made to her, and the company having no notice of any interest of the wife, other than that the policy designated her as beneficiary; Domestic Relations Law, § 52, For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes
relative to rights of a wife in a policy on the life of her husband relating to a policy in which the company contracts with the wife.
2. Insurance 1791⁄2-Right to loan on policy held with owner or holder. The right given by a life policy to obtain a loan of the company on the security thereof, silent as to the person to exercise the right, held with the owner or holder of the policy; that is, the one to whom it was issued, or his assigns.
3. Insurance 179-Clause held to protect company against assignment of life policy without notice.
The company issuing a life policy is protected in making a loan thereon to insured, with whom the contract was made, notwithstanding delivery and oral gift of the policy by insured to the beneficiary, without notice to the company; the policy providing that no assignment of it shall be binding on the company, unless filed with it.
4. Insurance 179%1⁄2-Under life policy, dividends held not to be applied to reduce loan.
The owner of a life policy having made no election as to application of dividends, held, under provision of policy, they were to be considered applied to purchase of paid-up additions, and could not be applied by company to reduction of loan on the policy.
Action by Katharine C. Hilton against the New York Life Insurance Company and another, to enjoin cancellation of policy and determine the rights of the parties thereof. Relief granted in part only.
Clinton T. Horton, of Buffalo, for plaintiff.
Lyman M. Bass, of Buffalo, for defendant insurance company.
SEARS, J. On January 14, 1908, the defendant company issued a policy of insurance on the life of Albert B. Hilton, who is the husband of the plaintiff, which read as follows:
"New York Life Insurance Company, in consideration of the annual premium of twelve hundred sixty-five dollars and fifty cents, and of the payment of a like amount upon each fourteenth day of January, until the death of the insured, promises to pay at the home office of the company in the city of New York, upon receipt at said home office of due proof of the death of Albert B. Hilton, of New York, county of New York, state of New York, herein called the insured, twenty-five thousand dollars, less any indebtedness hereon to the company and any unpaid portion of the prémium for the then current policy year, upon surrender of this policy, properly receipted, to Katharine C., wife of the insured, or, in the event of her prior death, to Dorothy C., Albert C., and Barbara I. Trego, her children, share alike, or to the survivors or survivor, or, if there be no such survivor, to the insured's executors, administrators, or assigns, beneficiaries, without right of revocation."
The policy also contained, among others, the following provisions: "Dividends.-Dividends at the option of the owner of this policy shall on the thirty-first day of March of each year be either:
"(1) Paid in cash; or
"(2) Applied toward the payment of any premium or premiums; or "(3) Applied to the purchase of paid-up additions to the policy; or "(4) Left to accumulate to the credit of the policy with interest at three per centum per annum and payable at the maturity of the policy, but withdrawable on any anniversary of the policy.
"Unless the owner of this policy shall elect otherwise within three months after the mailing by the company of a written notice requiring such election, the dividends shall be applied to purchase paid-up additions to the policy."
For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes