New York Court of Appeals
Putnam Rolling Ladder Co., Inc. v. Manufacturers Hanover Trust Company
October 19, 198974 N.Y.2d 340
Summary
The Court held that under UCC §§4‑103(3) and 4‑406 the burden of proving a bank’s compliance with clearing‑house rules rests on the bank, not the customer, and that comparative negligence cannot be applied to allocate loss under the UCC. It further held that evidence of the bank’s payment of other defective checks was admissible to show lack of ordinary care. Accordingly, the Appellate Division’s dismissal was reversed and judgment entered for the plaintiff for the full amount of its loss.