This issue in this case is whether a holder in due course of a check may recover the amount of the check from a defendant whose blank check has been stolen and then completed by forgery.
After plaintiff introduced the check in evidence defendant overcame the presumption that the signatures (and other entries) were genuine or authorized (N.J.S.A. 12A:3-307), and they must be regarded as forgeries. See N.J.S.A. 12A:1-201(43); Solomon v. National Community Bank of Rutherford , 102 N.J. Super. 482, 492 (Law Div. 1968), aff'd 105 N.J. Super. 164 (App.Div.1969). The court is now required to determine whether a motion to dismiss the action must be granted (R. 4:40-1) under the circumstances of this case despite plaintiff's contention that a jury question is presented by virtue of N.J.S.A. 12A:3-406 which provides:
Any person who by his negligence substantially contributes to a material alteration of the instrument or to the making of an unauthorized signature is
precluded from asserting the alteration or lack of authority against a holder in due course or against a drawee or other payor who pays the instrument in good faith and in accordance with the reasonable commercial standards of the drawee's or payor's business.
Defendant bank had kept a series of unbound prenumbered checks in a vault which was locked each evening and opened each morning by officers who possessed the safe combination. The vault was not located in an area open to the public and a limited number of persons were authorized to enter the vault.
The checks were printed at the instance of defendant bank and used by it for the payment of certain obligations. They were drawn on the Chase Manhattan Bank and were mainly used to reimburse that bank after defendant bank issued to its customers and received payment for money orders drawn against the Chase Manhattan Bank.
On November 16, 1979 defendant learned that two checks of this stock of checks had been cashed in another area of the State, and after investigation found that these checks and 20 others in this group, prenumbered 4092 to 4123, were missing from the vault.
Lower-numbered checks and higher-numbered checks were found intact. At no previous time had any bank officer or employee actually examined all of the checks seriatim to ascertain if the printer or the Chase Manhattan Bank had delivered all of the checks that were supposed to comprise the large stock of checks.
Defendant bank had no previous larcenous or embezzled loss experience. Neither the bank nor the police authorities were able to ascertain when or how the 22 checks came to be missing. The bank notified all banks in the area to be on the look-out for persons attempting to pass forged checks of this series.
On January 5, 1980 plaintiff sold an automobile to a buyer for $22,000 and accepted in payment one of the checks of this group, numbered 4113, made payable to the buyer and endorsed to plaintiff. The names of the signers on the check were actually ...