On appeal from Superior Court, Law Division, Camden County.
Lora, Michels and Larner. The opinion of the court was delivered by Larner, J.A.D.
[167 NJSuper Page 411] Plaintiffs instituted this action against Pioneer State Bank to recover a loss sustained because of
the bankruptcy of a stockbroker to whom the bank entrusted plaintiffs' securities for redemption.
Plaintiffs held two $25,000 bond anticipation notes of the City of New York and requested Mr. Rogers, the bank's officer, as an accommodation, to process them for redemption on the due date. The bonds were payable by the Chemical Bank of New York. And since the bank was located in Camden County, and Mrs. Hoke was anxious to obtain immediate payment because of publicity about the financial distress of the City of New York, Rogers forwarded the notes on August 21, 1975 to a New York broker by registered and insured mail, so that he would physically present them for payment to Chemical Bank on the due date.
The broker did present the notes on the due date, August 22, 1975, and Chemical Bank credited the account of the broker, Scott Gorman Municipals, Inc., for the full proceeds. Scott Gorman did not remit the funds to Pioneer Bank and on September 2, 1975 filed a petition in bankruptcy. As a result thereof, the proceeds from the redemption were frozen by the bankruptcy court and the claim to them has not as yet been resolved.
The complaint alleged several theories of liability sounding in negligence, breach of a fiduciary duty and breach of contract. The case was tried before a judge and jury, and at the completion of the presentation of evidence the judge submitted the case to the jury only on the issue of negligence of defendants. This submission was consistent with the court's denial of defendants' motion to dismiss at the end of plaintiffs' case which addressed the lack of sufficient evidence of negligence and proximate cause for jury determination.
The jury returned a verdict in favor of plaintiffs in the sum of $53,326.98, representing the amount of their loss and a judgment was entered accordingly. A subsequent motion for new trial or judgment n.o.v. was denied, and defendants appeal from the judgment as entered and the denial of the motion.
In his charge to the jury the judge articulated only one factual basis for negligence or proximate cause, i.e. , the circuitous route by which the bank submitted the notes for redemption. Plaintiffs in their appellate brief point to the testimony of an expert that the "normal" procedure is to send bonds directly to the paying agent, and rely solely upon the method of presentment through the broker as the crux of proof of negligence on the part of the bank and its causal relationship with the loss occasioned by the broker's bankruptcy.
While appellants submit multiple grounds for reversal, our view of the essence of this appeal requires consideration only of a single issue, namely, whether plaintiffs made out a prima facie case of negligence which warranted submission to the jury.
Applying the precepts of Dolson v. Anastasia , 55 N.J. 2, 5 (1969), we must conclude, upon the acceptance as true of all the evidence in support of plaintiffs' allegations and the benefit of all reasonable and legitimate inferences therefrom, that plaintiffs failed to present a sufficient case to support a judgment in their favor. Defendants' motion for dismissal as a matter of law should have been granted.
The Uniform Commercial Code, which is declaratory of preexisting New Jersey law on the subject, treats the responsibility of a collecting bank for the presentation of an item for collection in N.J.S.A. 12A:4-202. The bond anticipation notes involved herein are within the broad definition of an ...