On appeal by defendant from judgment rendered in favor of the plaintiff by the judge of the Second District Court of the city of Newark, sitting without a jury. Affirmed.
For the appellee, Saul & Joseph E. Cohn (Michael Silver, of counsel).
For the appellant, Herrigel, Lindabury & Herrigel (Joseph S. Lindabury, Jr., of counsel).
Before Justices Parker, Lloyd and Perskie.
The opinion of the court was delivered by
PERSKIE, J. The plaintiff was a depositor in defendant bank. On May 23d, 1933, Joseph Heimberg, president of plaintiff corporation, signed a check of the corporation in blank, the date, amount and name of payee not being inserted thereon. Aside from the signature of the drawer there was nothing written on the face of the check. On the back of the check appeared the words "payment on Commercial Ex.," which writing was placed thereon by the bookkeeper of the plaintiff corporation. The aforesaid check was placed in a safe. On May 24th, 1933, it was ascertained that the check, together with others, was apparently abstracted or stolen. The president of the plaintiff corporation thereupon personally appeared at the bank to ascertain whether the check had been presented for payment and to stop payment on it if it had not been so presented. The president at this appearance was told that before any notice had been received by the bank not to pay said check the same had been filled in for $486.50, made payable to cash and endorsed by one, Jack Cohn. The teller of the bank substantially testified that upon presentment of the check as aforesaid, he ascertained that the plaintiff corporation had sufficient funds on deposit to cover the check and upon being told by the said Jack Cohn that he was employed by the plaintiff corporation, without further investigation or otherwise verifying this information, paid the amount of the check to the said Cohn and debited the plaintiff's account with the sum represented by said check.
Defendant's motions for a nonsuit and directed verdict based on its contention that there was no liability on its part in the premises, after extended argument, were denied. Perhaps it shall be useful to quote the trial judge, in extenso, on the motion to direct a verdict for the defendant. He said:
"In so far as the question of the plaintiff's negligence is concerned my response to your application for a nonsuit was dispositive of that, and the same reasons urged in the motion for the direction of a verdict. I further hold that the presumption of negligence, which rests on the person who signs the check in blank, has been successfully met by the plaintiff, overcome by the plaintiff. He exercised the degree
of care consistent, under the circumstances, in this instance a high degree of care, in depositing the blank check in a safety compartment in the safe. Thereafter, it was apparently stolen. There is a presumption that it was stolen under the circumstances related here. Having overcome that, he has removed from his shoulders the consequences of the presumption of negligence. The defendant owes to the plaintiff under the circumstances where he is free from negligence (the bank to its depositor), the exercise of a degree of inquiry that a reasonable person would exercise in disposing of the funds of its depositors. Where a check made to cash bearing the earmarks -- I am using that term advisedly, because it was so designated in the examination -- is presented for cashing, to use the common term, a teller who undertakes to cash, cognizant of the fact that there is some earmark of the back of the check (which of itself is not an inconsistency with the payee termed "cash"), when presented by an unknown person, should put him on inquiry to determine whether that unknown person is a person sufficiently reliable to the extent that his statement may be taken as to his identity. In this instance the unknown person who received the check was unknown, admittedly, to this teller. The only inquiry he himself admits or states that he made was whether he was an employe of the maker of the check. Such inquiry of itself is not sufficient to relieve the bank of its responsibility, particularly so when a check bearing the notation that it is to serve for a certain purpose designated the payee as "cash." That of itself is not sufficient to make the payment of it a negligent act, but coupled with it, a payment to an unknown person, without identifying the unknown person, creates a set of circumstances of facts which does not relieve the bank of its legal obligation to the plaintiff."
The trial judge rendered judgment for the amount of the account debited, $486.56, plus interest, totaling $500, and allowed an exception on his refusal to nonsuit and direct.
Appellant seems to have divided the specifications of the determination which with it is dissatisfied in point of law, into three separate headings or ...