BILLINGS v. EAST RIVER SAVINGS BANK

Order entered September 13, 1968, denying third-party defendant-appellant's motion to dismiss the third-party complaint, unanimously reversed, on the law, with $50 costs and disbursements to the third-party defendant-appellant, and the motion granted, the action severed and the third-party complaint dismissed as to Morgan Guaranty Trust Company of New York. The depositor, the third-party plaintiff-respondent, having failed to give notice of the forged indorsements within three years from the date a statement of account accompanied by the checks was received from its bank, the third-party defendant-appellant, its claim against appellant is barred by both section 43 of the Negotiable Instruments Law and subdivision (4) of section 4-406 of the Uniform Commercial Code. These are not limitation statutes fixing the time within which action must be brought. They create a rule of substantive law, a statutory prerequisite of notice. A Statute of Limitations may be tolled; the bar of a condition precedent to liability may not be lifted. ( Shattuck v. Guardian Trust Co., 204 N.Y. 200, 209; Bloch v. Schwartz, 266 App. Div. 188, 190; Cohen v. Manufacturers Trust Co., 144 N.Y.S.2d 366, 370, Commander-Larabee Milling Co. v. Manufacturers Traders Trust Co., 61 F. Supp. 341; Wm. M. Barrett, Inc. v. First Nat. Bank of Shreveport, 191 La. 945.)

Concur — Stevens, P.J., Eager, Markewich, Nunez and Tilzer, JJ.