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CENTRAL CADILLAC, INC. v. STERN HASKELL

November 13, 1972

CENTRAL CADILLAC, INC., Plaintiff,
v.
STERN HASKELL, INC., Defendant & Third-Party Plaintiff, v. The COMMUNITY BANK a/k/a Marine Midland Bank-New York et al., Third-Party Defendants


Motley, District Judge.


The opinion of the court was delivered by: MOTLEY

Memorandum Opinion and Order

MOTLEY, District Judge.

 The third-party defendants, Chemical Bank New York Trust Co. (Chemical), Morgan Guaranty Trust Co. of New York (Morgan), and Royal National Bank of New York (Royal), move to dismiss the third-party complaint against them on the ground that the third-party complaint fails to state a claim upon which relief can be granted. *fn1" Fed. R. Civ. P. 12 (b)(6). The defendant and third-party plaintiff, Stern-Haskell, Inc., sets forth its claims against the movants in paras. 27 through 47 of its third-party complaint. The motions to dismiss are granted for the reasons stated below.

 For purposes of this decision only, this court will accept the statement of facts submitted by counsel for Stern-Haskell, Inc., in its brief in opposition to the instant motion, as follows:

 
FACTS
 
Stern-Haskell is a wholesale distributor of used cars. It purchases used automobiles from leasing companies and from new car dealers who take old cars in as trade-ins. This practice facilitates the expeditious disposition of used cars, as the wholesale distributor transports the cars it purchases to its garage where used car dealers, from all over the country, go to Jerome Avenue, in the Bronx, the hub of this market, to purchase their vehicles in an "as is" condition. The turnover is rapid (24-48 hours in most instances), at a marginal profit.
 
The practice in the trade entails negotiating the price; the issuance and delivery of a check, on-the-spot, in exchange for the documents of title, and the transportation of the vehicle from the premises of the Seller to the wholesaler, within hours.
 
Cadillac [Central Cadillac, Inc.] is a new car dealer from whom Stern-Haskell purchased some 42 vehicles during the period January 30, 1970 to July 16, 1970, at a cost of approximately $121,425.00, for which it issued its checks, on the spot, and concerning which its bank account, maintained with the Community Bank ("Community") [n/k/a Marine Midland Bank-New York] was charged in a like amount.
 
It appears that the checks, made payable to "Central Cadillac" and "Central Cad", in varying amounts, were negotiated through various banks (the third-party defendants herein) with forged endorsements.
 
Cadillac claiming it never received payment for its cars sued Stern-Haskell to recover $121,425.00. Stern-Haskell thereupon impleaded not only Community where it maintained its account and upon which bank the checks were drawn, but all of the collecting banks, which include Chemical, Morgan and Royal, the movants herein.
 
All of the checks, nineteen (19) of which involve Chemical and three (3) of which involve Morgan and Royal, bear on the reverse side thereof, the legend:
 
"This check is issued solely for the purpose of buying used cars on behalf of Stern Haskell, Inc. and for no other reason.
 
By endorsement this check when paid is accepted in full payment of the cars listed below and seller guarantees cars to be free and ...

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