Dubonnet Fabrics, Inc. v. First National City Bank , 25 A.D.2d 839 ( 1966 )

Appeal from an order of the Supreme Court at Special Term, entered May 19, 1964 in New York County, which denied a cross motion by defendants for summary judgment.

Per Curiam.

The plaintiff corporation in this ease sues the defendant banks for having deposited cheeks made to the order of the corporation, in an account, not of the corporation, but of a partnership of the same name. The defense of the banks is that the checks belonged to the partnership rather than to the corporation and, consequently, the plaintiff has no cause of action.

The defendants moved for summary judgment dismissing the complaint, which motion Special Term denied.

In support of its application the defendants relied exclusively upon an admission made by the president of the plaintiff corporation in another proceeding (Action No. 1) where this same plaintiff sues Crompton-Richmond, its factor. The defendants are not a party to that action.

In order to better understand the significance of the admission, we must consider briefly the issues presented in that action. The factor held two accounts, one concededly, of the plaintiff corporation and the other (Account No. 3) which the plaintiff alleges here and in the companion action, belonged to the partnership rather than to the corporation. The admission relied on by the defendants for summary judgment is as follows: “ It was recognized by all concerned — including the officials of Crompton-Richmond — that Account No. 2 was to be for the exclusive benefit and use of the Company, not the corporation.”

Defendants urge that inasmuch as there was an admission that “ Account No. 2 was for the exclusive benefit and use of the company and not the corporation ” it establishes as a fact, that the cheeks made in the name of the corporation, but credited to the partnership account, really belong to the partnership and, therefore, the corporation has no claim. The weakness of the defendants’ position is that the evidence is not sufficiently clear with respect to what extent, if any, the checks so deposited were referable to Account No. 2. The admission must be broad enough to indicate that the checks in question were properly issued against Account No. 2. We do not tbink that this record establishes that fact. Accordingly, it cannot be said that the defense is established by the admission relied upon, and summary judgment may not be had. There certainly are issues of faet which need to be tried.

The order should be affirmed, on the law, on the facts and in the exercise of discretion, with costs and disbursements.