Rosemary Higgins Cass, J.s.c.
This summary judgment motion raises the issue, not previously decided in New Jersey, of what manner of notice to a bank affords it a reasonable opportunity to stop payment on a check within the intendment of N.J.S.A. 12A:4-403(1).
The pertinent facts are not in dispute. Plaintiff Staff Services Associates, Inc. (hereinafter Staff Service) is a corporation which maintains a checking account with defendant Midlantic National Bank (hereinafter Midlantic). On July 2, 1982, Staff Service's representative, Raymond A. Nelson, issued a check drawn on Midlantic, payable to Lynn A. Gross for the sum of $4,117.12. Thereafter, on July 7, 1982, John J. Tracy, the president of Staff Service, executed a stop payment order to Midlantic and incorrectly wrote the amount of the check as $4,117.72, an error of one digit. Tracy acknowledged that he read the statement at the bottom of the stop payment order which provides as follows:
IMPORTANT: The information on this Stop Payment Order must be correct, including the exact amount of the check to the penny, or the Bank will not be able to stop payment and this Stop Payment Order will be void.
As a result of the incorrect information supplied by Tracy, the wrong amount was programmed into Midlantic's computer and when presented for payment the check was paid and the bank charged it to Staff Service's account. Thereafter, plaintiff brought this action for wrongful payment of the check in violation of the stop payment order.
Midlantic contends that since Staff Service supplied the bank with an incorrect check amount, despite having been apprised of the necessity for precision in the stop payment order, it was not afforded a reasonable opportunity to act upon Staff Service's request to stop payment of the check as required by § 4-403(1) of the Uniform Commercial Code, N.J.S.A. 12A:4-403(1).
Staff Service claims that numerous questions of fact exist, including: whether the condition imprinted on the stop payment order is arbitrary and unreasonable; whether the imposition of such condition is contrary to public policy in light of the unequal bargaining position between the bank and its customers; whether the bank should reasonably be obligated to inform its customers that a computerized system is utilized to stop payment of checks and whether Staff Service's representative did, in fact, reasonably describe the check when he correctly supplied the date, the number of the check, the account number, the payee's name and the actual amount, which varied only by 60 cents.
Section 4-403(1) of the Uniform Commercial Code, N.J.S.A. 12A:4-403(1) provides:
A customer may by order to his bank stop payment of any item payable for his account but the order must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it prior to any action by the bank with respect to the item described in 12A:4-303. [emphasis supplied]
This provision codifies the common law right of a depositor to order payment of a check stopped.
There are no reported decisions in this State which have dealt with the issue of what constitutes a bank's "reasonable opportunity to act" pursuant to § 4-403(1) of the code, where the customer requests stop payment of a check. However, decisions of courts in other jurisdictions are instructive.
One line of cases has looked at the sufficiency of the customer's notice to the bank and found that even though there might be a discrepancy in the check amount or the check number, nevertheless the information supplied was sufficient ...