On appeal from the Superior Court of New Jersey, Law Division Camden County.
Approved for Publication May 10, 1996.
Before Judges Shebell, Stern and Wallace. The opinion of the court was delivered by Shebell, P.j.a.d.
The opinion of the court was delivered by: Shebell
The opinion of the court was delivered by SHEBELL, P.J.A.D.
Plaintiff, Danco, Inc. (Danco), filed an action against defendant, Commerce Bank/Shore, N.A. (Commerce), seeking payment of funds on three checks drafted by K. Hovnanian at Valley Brook, Inc. (Hovnanian) made payable to:
Plaintiff's complaint alleged that San-Fran Plumbing, Inc. (San-Fran) presented the three checks to Commerce for payment without the authority of Danco after San-Fran had forged the signature of Daniel Campbell, on behalf of Danco, and that Commerce paid the proceeds on the basis of indorsements believed to be forged by San-Fran. Plaintiff demanded judgment against Commerce for the face value of the checks totaling $22,332.50.
Commerce's answer denied all allegations, and asserted that the action was barred by the Uniform Commercial Code (U.C.C.), that the complaint failed to state a claim for which relief could be granted and was barred by the statute of limitations. Commerce also filed a Third-Party Complaint against San-Fran and its principal Frank Papa, alleging that the damages sought were the direct result of the breach of warranty of San-Fran. Neither San-Fran nor Papa responded to the Third-Party Complaint.
On motion before the completion of discovery, Commerce was granted summary judgment dismissing plaintiff's complaint with prejudice. The Judge held that the checks were payable alternatively to either Danco or San-Fran, and not to the two in conjunction. He reasoned that if the check had been payable to both parties jointly only, it would have had an ampersand ("&") or the word "and" and not a virgule (""), meaning "or".
Danco is in the business of selling plumbing supplies. For approximately four years San-Fran obtained materials and supplies from Danco, on credit, for use in construction projects that included two development projects built by Hovnanian. When the San-Fran account became delinquent, Danco and San-Fran agreed to enter into a joint check agreement, whereby checks drafted by Hovnanian in ...