Appeal from an order denying the motion of defendant, The First National Bank and Trust Company of Hudson, N. Y., for a summary judgment against Farmers National Bank of Hudson, impleaded as a defendant on the First National’s motion.
The action was brought by plaintiff as subrogee under its policy, which insured the Hudson City Savings Institution against loss through forgery, for $5,000 damages and $71.50 interest, and as assignee for $553.51 attorney’s fees and disbursements, expended by the savings institution in defending an action brought against it by Anna Gaddis, one of its depositors, against whose account $5,000 was charged in May, 1935, being the amount of a draft to her order drawn by the savings institution upon the First National Bank. This draft, purporting to be indorsed by Anna Gaddis by “ her mark,” duly witnessed, and by one Merlon J. White, was presented to and paid by the Farmers National Bank. It, guaranteeing all previous indorsements, presented it to, and received payment from, the First National Bank. The latter charged the amount against the account of the savings institution. The Gaddis action against the savings institution was brought to recover the amount of her deposit, including the $5,000 represented *32by the draft, the receipt and indorsement of which she denied. The savings institution gave notice of the action to the First National and the Farmers banks, and invited each to participate in the defense. The Farmers Bank participated in the preparation of the case, and its attorney and director counseled with the attorneys for other interested parties, but the surety company which insured it against loss through forgery, in a letter written to the attorneys for the savings institution, refused to contribute toward the expenses to be incurred in preparing for trial, giving as a reason, “ the issues involved in the suit are foreign in a sense to the issues that would be involved in a suit against the Farmers National Bank, for whom we are surety, should the latter be sued on the endorsement to the $5,000.00 check.” The letter gave the following assurance: “ We, however, are willing to co-operate with you in any way that we can in the handling of the situation.” It was determined upon the trial that the purported indorsement of the draft by Gaddis was a forgery.
Plaintiff, insurer of the savings institution against loss through forgery, has paid the judgment, and its unopposed motion for a summary judgment against the First National Bank, which it also insures against loss through forgery, has been granted.
The following facts should be stated in view of the arguments advanced by certain of the parties: Anna Gaddis is now deceased. The Glens Falls Indemnity Company insures the Farmers National Bank against loss through forgery. It was asserted in the Gaddis action that the order to the savings institution for the withdrawal of the $5,000, purporting to have been executed by her witnessed mark, was a forgery. Her book, wherein entries were made by the savings institution as to the amount of her deposits, withdrawals and balance, did not contain an entry showing the $5,000 withdrawal. This was explained by a bank official as an oversight. Respondent Farmers National Bank opposed the granting of the motion for summary judgment at the Special Term, and urges an affirmance of the order denying it, upon the ground that there was no privity between it and the savings institution, against whom the judgment was recovered, and that lacking such privity, proof of the judgment is not sufficient to justify the direction to enter a judgment against it; further, that in this transaction its only privy was the First National Bank, not a party to the Gaddis action.
The. warranty given by the Farmers Bank under the Negotiable Instruments Law (§§ 115, 116) as to genuineness of .prior signatures when it presented the draft to the First National Bank for payment, is not affected by criminality or fraud practiced upon the savings institution in connection with the issuance of the draft, payable to *33the order of Anna Gaddis. (Seaboard National Bank v. Bank of America, 193 N. Y. 26; National Surety Co. v. Manhattan Co., 252 id. 247; American Surety Co. v. Empire Trust Co., 262 id. 181.) The savings institution drew its draft payable to Anna Gaddis. Neither the fraud practiced in obtaining the draft nor the negligence of the savings institution in failing to enter the amount on the Gaddis bank book was connected in anyway with, or induced the payment of, the draft by Farmers National Bank, which could pay only after Anna Gaddis had indorsed. It was liable if it paid in violation of the requirements of the drawer, viz., to Anna Gaddis or her indorsee. (Strang v. Westchester County National Bank, 235 N. Y. 68; Ulmann Co., Inc., v. Central Union Trust Co., 257 id. 563; American Surety Co. v. Empire Trust Co., supra.) Hartford v. Greenwich Bank (157 App. Div. 448; 215 N. Y. 726), which held the opposite, was repudiated and overruled by the Ulmann case (supra).
In an analogous case it has been said: “ The doctrine of privity, however, is not so conclusive as it once was.” (City of New York v. Bronx County Trust Co., 261 N. Y. 64, 70.) “ The assault upon the citadel of privity is proceeding in these days apace. How far the inroads shall extend is now a favorite subject of juridical discussion. [Citations.] In the field of the law of contract there has been a gradual widening of the doctrine of Lawrence v. Fox (20 N. Y. 268), until today the beneficiary of a promise, clearly designated as such, is seldom left without a remedy. [Citations.] ” (Ultramares Corp. v. Touche, 255 N. Y. 170, 180.) There was privity of estate between the savings institution, the First National and Farmers banks in this case through succession of relationship to the same chose in action. “ The term privity denotes mutual succession or relationship to the same rights of property ’ (Greenleaf on Ev. § 523). Privies are divided by Lord Coke into three classes — 1st, privies in blood; 2d, privies in law; and 3d, privies by estate. The doctrine of estoppel, however, so far as it applies to persons falling under these denominations, applies to them under one and the same principle, namely, that a party claiming through another is estopped by that which estopped that other respecting the same subject-matter.” (Stacy v. Thrasher, 6 How. [U. S.] 44, 59; 16 U. S. 596, 598 [Little-Brown ed.].) “ The term privity in estate denotes mutual or successive relationship to the same rights of property. * * * It is, however, the same sort of privity which enables the grantee of a purchaser to maintain an action upon the covenants of title given to his vendor.’ ” (Mygatt v. Coe, 124 N. Y. 212, 219; Van Bensselaer v. Hays, 19 id. 68, 91.) Complete identity of the parties is not essential. One may be bound if he was in *34privity to a party and to the subject-matter of a litigation previously determined. Privity means mutual or successive relationships to the same rights of property. The estoppel of a judgment on parties affects their claims on the property. * ,* * A sound public policy demands that successive trials of the same issue of fact shall not be allowed to a party although he select different parties as defendants not technically privy to the preceding judgment or the immediate controversy in which it was granted. Having had one fair trial of an issue, whether on a contract like a joint and several note or in any other action brought against one party liable wherein the merits of a claim or defenses are common to all co-obligors — and having been unsuccessful, the plaintiff cannot try it again against other obligors.” (Haverhill v. International Railway Co., 217 App. Div. 521, 522; affd., without opinion, 244 N. Y. 582.)
In City of New York v. Bronx County Trust Co. (supra) the trust company had paid forged drafts, charging the amounts to the city’s account, and after the commencement of the action, paid the city the sum sued for, and impleaded each indorsing bank on its guaranty. The Appellate Division (234 App. Div. 244) reversed upon the law and facts a judgment in favor of one of the indorsing banks against the depository, Bronx County Trust Company, and directed judgment in its favor against the indorsing bank. This was affirmed by the Court of Appeals. As indicated by the earlier quotation from the opinion, one of the issues was lack of privity, and another had to do with the negligence of the city in issuing the drafts. In National Surety Co. v. Manhattan Co. (supra) the action was brought by the surety company as assignee of its policyholder, Tucker, Anthony & Company, drawer, to recover from the drawee, Manhattan Company, on account of checks upon which indorsements had been forged. The Manhattan Company impleaded the Bank of America where the checks had been cashed. The surety company appealed from a decision of the Appellate Division (225 App. Div. 849) affirming a judgment in favor of the Manhattan Company dismissing the complaint. The Manhattan Company also appealed from that part of the judgment which dismissed its claim against the Bank of America. The negligence of the Anthony Company in drawing the checks was presented as a defense by the Manhattan Company. Both judgments were reversed, the concluding paragraph of the opinion stating: “ In our case, since the defendant, the Manhattan Bank, has a remedy over against its guarantor, the Bank of America, whereby it will be reimbursed for all the moneys which it has paid out upon the forged indorsements, we think it cannot justly maintain that it has been injured by the negligence of its depositor in delay*35ing to report the forgeries after actual discovery thereof. Therefore, the plaintiff should have a recovery in full for the unauthorized payments. The judgments should be reversed.”
Halsey v. Bank of New York & Trust Co. (270 N. Y. 134) was an appeal from a judgment and order of the Appellate Division (244 App. Div. 711) which reversed an order of the Special Term denying a motion for summary judgment. The plaintiff brought the action against the original defendant, Bank of New York and Trust Company, to recover moneys alleged to have been charged improperly against its account. The original defendant impleaded the indorsing banks, among them the Manhattan Company. The order of the Appellate Division granting summary judgment was reversed upon the ground that there was a triable issue as to whether or not the checks were indorsed by the person to whose order they were drawn. There had been no trial of that issue.
The Farmers National Bank took this draft relying upon the responsibility of its transferer and dealt with it at its own peril (Crawford v. West Side Bank, 100 N. Y. 50; American Surety Co. v. Empire Trust Co., supra), and by indorsing it and collecting the amount from the First National Bank warranted all prior signatures. (Neg. Inst. Law, §§ 115, 116.) “ At the moment ” when it transferred this draft to the First National Bank for value, that bank became possessed of a cause of action against it upon the express warranty of the genuineness of the indorsements. (National Surety Co. v. Manhattan Co., supra, p. 261.) “ ‘ The theory of the rule that a party who is hable over and has notice and an opportunity to defend an action is bound by the judgment is not limited to cases of direct liability or suretyship, or those where the liability is predicated upon the same contract or duty. * * * ’ (Prescott v. LeConte, 83 App. Div. 482, 490; affd., 178 N. Y. 585.) ” (Cohen v. Bass, Inc., 246 N. Y. 270, 278.) The same opinion says, in substance, that the rule is one of sound public policy, existing to the end that differing judicial decisions may not be made on the same state of facts, and to prevent their litigation over and over in different actions. It continues: “ ‘ It is not essential that the party who is ultimately hable shall be hable on the same contract or could have been held hable in the former action, or that he shall be directly a party to the transaction by which the person to whom he is hable over becomes obhgated; it is sufficient that between him and the party sued, the duty for a violation of which the action is brought rests primarily upon him, and that the material facts have been htigated in the former action of which he had notice and an opportunity to defend/ ”
*36The only issue of fact raised by respondent in opposition to appellant’s motion is as to the forgery of payee’s indorsement. This has been once litigated in an action of which respondent had notice and an opportunity to defend.
The order should be reversed on the law, with costs, and the motion for summary judgment granted, with costs.
Rhodes and Heffernajst, JJ., concur; McNamee, J., dissents, with an opinion, in which Crapser, J., concurs.