[141 NJSuper Page 540] This motion for summary judgment presents the issue of whether the drawer of a check
can maintain an action against a collecting bank. The material facts are not in dispute.
On November 15, 1973 plaintiff issued a check drawn on United Virginia Bank/State Planters (United Virginia), payable to the order of Rudolph J. Caprario Jr. in the amount of $2,566.67. That check was stolen and Caprario's endorsement was forged by defendant Robert H. Snyder. Snyder presented the check to Broadway Bank, which paid over the full face amount to Snyder.
Broadway Bank endorsed the item: "Pay any Bank P.E.G.,*fn1 Broadway Bank & Trust Co., Paterson, N.J." and placed it into the collection process. As a result Broadway Bank received settlement for the item and United Virginia charged plaintiff's account.
On these facts plaintiff advances two bases of liability: Code-imposed warranties and conversion. Before examining these theories, it is appropriate to state, parenthetically, that New Jersey law applies. N.J.S.A. 12A:4-102(2).
Plaintiff contends that it is the beneficiary of the warranties contained in N.J.S.A. 12A:4-207(1) and (2). The specific warranties enumerated in these subsections are not germane. It is sufficient to know that the introductory clauses to each of these subsections mandate, respectively:
(1) Each customer or collecting bank who obtains payment or acceptance of an item and each prior customer and collecting bank warrants to the payor bank or other payor who in good faith pays or accepts the item that * * *
(2) Each customer and collecting bank who transfers an item and receives a settlement or other consideration for it warrants
to his transferee and to any subsequent collecting bank who takes the item in good faith that * * *
Thus, the warranties imposed on a collecting bank*fn2 run to the "payor bank*fn3 or other payor," N.J.S.A. 12A:4-207(1), and to that bank's "transferee and to any subsequent collecting bank," N.J.S.A. 12A:4-207(2). Plaintiff is none of these. United Virginia, on which the item was drawn, is the "payor bank." And plaintiff is not Broadway Bank's "transferee" or a "subsequent collecting bank." No warranty is created in plaintiff's favor by ...