On appeal from Superior Court, Law Division, Bergen County.
Before Judges Pressler, Conley and Newman.
The opinion of the court was delivered by
This appeal requires us to consider whether a presumption of payment applies to a savings account deposit evidenced by an uncancelled passbook where the bank has no record of the account and the passbook is presented with a demand for payment by the depositor's heir twenty years and two months after the last transaction recorded in the passbook. In the circumstances here, we are satisfied that the bank is not entitled to such a presumption. Accordingly we affirm the judgment appealed from.
Rose Guarino, a lifelong resident of Lodi, New Jersey, died in June 1990 survived by her only child, plaintiff Linda Pagano. Mrs. Guarino had lived by herself after her husband's death in 1976, and in her later years supported herself exclusively by means of social security payments and a federal rent subsidy. Her estate consisted only of her personal effects. Several months after Mrs. Guarino's death, plaintiff, who later qualified as her administratrix, found the passbook which is the subject of this
action in her mother's bureau drawer. The passbook showed that on July 10, 1970, Mrs. Guarino had deposited $4,400 in a pyramid savings account at a branch of Peoples Trust of New Jersey, a state-chartered commercial bank which later changed its name to United Jersey Bank (UJB). That was the only transaction noted in the passbook, which bore no stamp or other marking showing that the account had been closed or the book canceled. Nor was there any posting in the book of any interest paid by the bank on the account. Plaintiff, who had had no prior knowledge of the account despite her close relationship with her mother, presented the passbook at the branch office of UJB in August or September 1990. She demanded payment. Payment was refused.
This action ensued against defendant UJB. UJB, which had been unable to find any internal record corroborating the existence of the account, assumed that it must have been long since closed by the depositor and the proceeds paid to her. It therefore asserted the affirmative defense of payment, claiming its entitlement to a common-law presumption of payment of a debt after a lapse of twenty years. The trial Judge held that no such presumption applied in the circumstances here and submitted the cause to the jury, which returned a verdict in plaintiff's favor in the amount of the deposit. The Judge ordered that interest be added at the bank's passbook account rates. The gravamen of defendant's appeal is the court's rejection of its asserted right to a rebuttable presumption of payment as well its rejection of its asserted limitations defense.
According to defendant's proofs, a bank-wide search of its retained records, undertaken after plaintiff's presentation of the passbook, failed to disclose any indication of the account's existence. More specifically, defendant's employees testified that there was no extant record of any kind demonstrating that there was either an active or a closed account in Mrs. Guarino's name or identified by her social security number. Based on records still in existence, the bank determined that there was no record of an active
account at least since 1983, no record of an escheat of the account at least since 1980, no record of a publication of notice of the account as inactive at least since 1975, and no indication of an interest notice sent by the bank to the depositor by way of a 1099 form at least since 1983. With respect to the uncancelled passbook in plaintiff's possession, bank personnel explained that ordinarily a depositor must fill out a withdrawal order and present the passbook for appropriate notation when either all or part of a passbook savings account is withdrawn. A depositor who claims to have lost the passbook is required to execute an affidavit of lost passbook and is accorded access to the funds thirty days later. Thus funds may not be withdrawn from a passbook savings account without both a withdrawal order and either presentation of the book for appropriate marking or execution of the affidavit. The bank did not, however, retain such affidavits executed prior to 1980, and its search of its file of affidavits executed thereafter did not turn up one by Mrs. Guarino.*fn1 Defendant's speculation, therefore, was that Mrs. Guarino had either withdrawn the deposit some time prior to 1980 by executing a lost-passbook affidavit or that she had withdrawn it by presenting the passbook which the teller neglected to stamp.
The only other proofs consisted of expert testimony offered by both parties describing applicable state and federal regulation and internal bank policy regarding record retention. The substance of the testimony, not in the end particularly helpful, was that state regulation of minimum retention periods for various types of bank records applies only to ...