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Commercial Union Insurance Co. v. Burt Thomas-Aitken Construction Co.

Decided: May 19, 1969.


For affirmance -- Chief Justice Weintraub and Justices Jacobs, Proctor, Hall, Schettino and Haneman. For reversal -- Justice Francis. Francis, J. (dissenting).

Per Curiam

[54 NJ Page 78] Plaintiff, a surety company, sued upon an indemnity agreement to recoup a loss on a performance bond. One of the indemnitors asserted his signature was forged, whereupon plaintiff joined the notary public who took the acknowledgment on the agreement, and also the bank which employed the notary. The bank prevailed on a motion for summary judgment. The Appellate Division reversed, 91 N.J. Super. 13 (App. Div. 1966), and we reversed the judgment of the Appellate Division and affirmed the trial court's judgment, with, however, leave to plaintiff to file an amended complaint. 49 N.J. 389 (1967). We there held that the

private employer of one who is also a notary public is not liable vicariously for the notary's neglect in his public office. We said (pp. 395-396):

"We add that the private employer of a notary public might be liable for the notary's breach of duty if the employer participated in that breach, as for example if the employer should ask or encourage the notary to act without appropriate inquiry. It may also be that the private employer could be held if it led another to believe the notary was acting for it and on its credit or responsibility. Neither of those conceivable bases of liability is suggested in the case at hand, but the situation being novel, we reserve to plaintiff the right to file within 30 days of the date of our mandate an amended complaint upon the first of those theses if plaintiff believes it can succeed upon it."

We limited an amended complaint to the one thesis since, as to the other, plaintiff conceded it did not know who the notary was when it accepted the indemnity agreement and of course had no idea that he worked for the bank.

Plaintiff filed an amended complaint in harmony with the leave so reserved to it. Upon trial the jury found that the indemnitor's signature was forged but that the defendant notary did not know his acknowledgment was untrue and was not negligent. Upon those findings, the trial court gave judgment for the notary and for the bank. Plaintiff appealed and we certified the appeal before argument in the Appellate Division.

Plaintiff seeks reversal as to the notary upon two grounds.

The first is that the trial court should have stricken the notary's testimony because he had declined to answer this question at pretrial discovery:

"Q. Have there ever been occasions in which you have used your notarial powers with respect to documents, specific acknowledgments, without having the person whose signature is being acknowledged personally before you?"

Counsel who then represented both the bank and the notary directed his client not to answer. Plaintiff sought to compel

an answer before trial but, we are told, the court sustained an objection based upon the privilege against self-incrimination. At the trial, the notary, testifying in his own defense, answered in the negative a similar question put by his own attorney. Plaintiff did not object. Indeed, on cross-examination plaintiff put the same question, but after receiving the same negative answer, sought to bring out that the witness had refused to answer that question on the deposition. The trial court sustained defendant's objection. Later in the trial, plaintiff moved to strike this testimony, asserting that where a party refuses to answer on pretrial discovery, he should be barred from offering testimony on the subject at the trial. The motion to strike was denied.

Duratron Corp. v. Republic Stuyvesant Corp., 95 N.J. Super. 527 (App. Div. 1967), to which plaintiff refers, dealt with the question whether an inference may be drawn in a civil suit against a defendant who does not testify. That is not the situation here; defendant did testify. Nor do we have the question whether sanctions may be imposed against a party to a civil suit who refuses to answer, before or at trial, on the plea of self-incrimination. ...

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