knew, or was bound to discover, that that indictment ripened into a conviction. The likelihood that a demonstrably dishonest attorney, chronically short of funds, might attempt to use his fiduciary position to convert a client's check to his own use is hardly remote.
The utility of the bank's inaction, however, was no greater in Yormark's case than in the case of an ordinary customer. Clearly the unusual risks in handling Yormark's deposits substantially outweighed the utility of allowing the Yormark accounts to be handled in a business-as-usual fashion. Cf. Belmar Trucking Corp. v. Am. Trust Co., 65 Misc.2d 31, 316 N.Y.S.2d 247 (N.Y.City Ct.1970); Von Gohren v. Pac. Nat'l Bank of Washington, 8 Wash.App. 245, 505 P.2d 467, 473 (1973). A question exists as to what action the bank could have taken to eliminate or reduce that risk. Perhaps requiring Yormark to furnish the bank with copies of the signatures of all endorsers on an instrument might have proved futile. If he were a determined forger, Yormark might have forged a copy of the endorser's signature as he did the endorsement itself. But cf. Belmar Trucking Corp. v. Am. Trust Co., supra, at 251-52. Yet he also might have been deterred by an awareness that his account was under close scrutiny. Requiring him to furnish each endorser's address and telephone number, moreover, would have afforded the bank an independent basis for determining each endorsement's authenticity. Neither of these alternative courses would be unduly burdensome. The bank utilizes its deposits to generate income. Involved here was a single customer account posing a known and substantial risk to endorsers to whom the bank owed a duty of care. In fairness, Fidelity was required as a matter of law to take some precaution to protect them from the foreseeable and substantial risks posed by Yormark's misconduct.
Accordingly, Devlin's motion for summary judgment against third-party plaintiff Fidelity on its claim for indemnity will be granted.
Two additional matters relating to the banks' claim for contribution, although not raised by Devlin, require consideration. The first is the question whether Devlin's alleged liability to the Wendels is of the sort which would entitle him to indemnity from the banks if he were held liable for plaintiffs' loss. If this were the case, the banks would be barred from seeking contribution. See N.J.S.A. 2A:53A-3. The answer to the question is clearly negative, however. The settled rule in New Jersey is that indemnity will be allowed to a joint tortfeasor only if his liability is merely "constructive" or "vicarious." E. g., Daily v. Somberg, 28 N.J. 372, 385, 146 A.2d 676 (1958); Hut v. Antonio, 95 N.J.Super. 62, 69, 229 A.2d 823 (App.Div.1967); Public Service Elec. & Gas Co. v. Waldroup, 38 N.J.Super. 419, 432, 119 A.2d 172 (App.Div.1955). "Constructive" or "vicarious" liability is liability which is imputed by law, without regard to actual fault. See, e. g., Mayer v. Fairlawn Jewish Center, 38 N.J. 549, 560-61, 186 A.2d 274 (1962). But liability is not "vicarious" merely because resting upon "passive" rather than "active" negligence. See Public Service Elec. & Gas Co. v. Waldrup, supra, 38 N.J.Super. at 443, 119 A.2d 172. Devlin's liability is sought to be predicated upon actual fault in failing properly to supervise Yormark, not upon negligence imputed by law. It is immaterial, therefore, that his omissions might be characterized as "passive" wrongs. He would not be entitled to indemnity for the loss caused by his conduct.
The second matter requiring consideration is twofold: first, whether the terms of the Joint Tortfeasors Contribution law allowing contribution in regard to a "wrongful act," N.J.S.A. 2A:53A-3, bar an action for contribution based on a liability arising without fault under N.J.S.A. 12A:3-419(1), and, second, whether the policy underneath the latter statute's absolute liability provisions bars such action against an alleged concurrent wrongdoer.
The New Jersey Supreme Court considered similar questions in Adler's Quality Bakery, Inc. v. Gaseteria, Inc., 32 N.J. 55, 159 A.2d 97 (1960). In that case the Court rejected the notion that the term "wrongful act" in the contribution statute "necessarily connotes fault, thus excluding from the benefits of the Contribution Law any party whose liability is based on liability without fault." Id. at 74, 159 A.2d at 106. It held that the term included certain damages caused by the operation of an aircraft, for which the aircraft owner was absolutely liable by statute. See id. at 74-75, 159 A.2d 97. Convinced that the Legislature had power to impose absolute liability for damages so caused, see id. at 67-72, 159 A.2d 97, the Court concluded that the "wrongful act" consisted simply of causing damages in the statutorily defined manner. Id. at 75, 159 A.2d 97.
The Court finds that the term "wrongful act" in N.J.S.A. 2A:53A-3 also includes causing damages in the manner defined in N.J.S.A. 12A:3-419(1). That some absolute liabilities for paying an instrument over a forged endorsement, i. e., those to transferees and subsequent collecting banks, see N.J.S.A. 12A:4-207(2), are expressed in terms of "warranty" rather than tort liability, does not compel a different result. The bank remains liable to the owner for conversion. See N.J.S.A. 12A:3-419(1). Fairness would not be served by denying the banks the right to seek contribution merely because their liability, imposed by law, rather than bargained for through negotiation, is phrased in the language of contract.
The Adler's Bakery Court also considered the argument that permitting the aircraft owner in that case to seek contribution from an alleged joint wrongdoer would frustrate the purpose underlying the absolute liability provision. Pointed out was that provision's design to eliminate problems of proof concerning the proximate cause of injuries resulting from the falling aircraft. Noting, however, that the statute's terms applied only to innocent victims, the Court concluded that the alleged wrongdoer was outside the protected class and that the Legislature intended ordinary tort principles to govern problems of proof between him and the aircraft owner. Id. at 78, 159 A.2d 97.
Again, the Court finds the reasoning of Adler's Bakery controlling. The absolute liability provisions of New Jersey's Uniform Commercial Code applicable to collecting banks operate only in favor of an innocent owner, compare N.J.S.A. 12A:3-404 with Salsman v. National Community Bank of Rutherford, 102 N.J.Super. 482, 246 A.2d 162 (Law Div.1968), "transferees" and "subsequent collecting banks" who take the item in "good faith," N.J.S.A. 12A:4-207(2), and "payor banks" and "other payors" who in good faith pay or accept the item," N.J.S.A. 12A:4-207(1). These provisions, designed to distribute risk of loss due to forgery among parties dealing with an instrument during the course of negotiation or payment, cannot reasonably be construed to operate in favor of an alleged joint wrongdoer outside the chain of negotiation. The equities between a collecting bank and such a party have not been addressed by the Legislature. Presumably, they are to be governed by ordinary tort principles. Neither section 3-419 nor section 4-207 of Title 12A bars the banks from seeking contribution from Devlin.
Third-party defendant has also moved alternatively for more specific answers to certain interrogatories. His failure to comply with Local Rule 15 (D), requiring the interrogatories in question to be attached to the moving papers if they have not already been filed with the Clerk, however, precludes a ruling on that request. Accordingly, relief will be denied, without prejudice to a renewal of the motion in accordance with the cited local rule.
Summary judgment shall be granted on third-party plaintiffs' claim for indemnity.
They may proceed to trial on their claim for contribution in accordance with Parts I and II of this opinion. Pursuant to Part I, the banks will not be entitled to prove Devlin's negligence by introducing evidence of Yormark's criminal indictment, conviction, or disbarment. Counsel shall submit an order.