Rainbow Inn, Inc. v. Clayton Nat. Bank, No. A--1087

CourtNew Jersey Superior Court – Appellate Division
Writing for the CourtKILKENNY
Citation205 A.2d 753,86 N.J.Super. 13
Decision Date18 December 1964
Docket NumberNo. A--1087
PartiesRAINBOW INN, INC., a corporation of the State of New Jersey, Plaintiff-Respondent, v. CLAYTON NATIONAL BANK, Defendant-Appellant.

Page 13

86 N.J.Super. 13
205 A.2d 753
RAINBOW INN, INC., a corporation of the State of New Jersey,
Plaintiff-Respondent,
v.
CLAYTON NATIONAL BANK, Defendant-Appellant.
No. A--1087.
Superior Court of New Jersey
Appellate Division.
Argued Nov. 23, 1964.
Decided Dec. 18, 1964.

Page 15

[205 A.2d 754] Neil F. Deighan, Jr., Camden, for appellant (Kisselman, Devine, Deighan & Montano, Camden, attorneys).

Albert G. Driver, Haddon Heights, for respondent.

[205 A.2d 755] Before Judges CONFORD, KILKENNY and LEWIS.

Page 16

The opinion of the court was delivered by

KILKENNY, J.A.D.

Plaintiff corporation sued defendant bank in the Gloucester County Court to recover the sum of $36,513.37, with interest, being the amount of 12 forged checks charged by the bank as drawee against plaintiff's checking account therein. After a trial without a jury, judgment was entered on August 2, 1963 in favor of plaintiff and against defendant in the sum of $33,013.37, with interest at 6% From May 14, 1961 and costs. As hereinafter noted, the difference of $3500 between the amount sued for and the amount of the judgment represents a deposit in that amount in plaintiff's account presumably by the forger, subsequent to the forgery, which offset the first forged check in that amount. Plaintiff agrees that this $3500 item was satisfied by the subsequent deposit. Defendant appeals from the judgment against it.

At the time in issue plaintiff was a family corporation, having its principal place of business in the Borough of Clayton, Gloucester County, and conducted a tavern and liquor package store business there. The corporation had only three stockholders, who were also its officers. Jean Wlodkowski was president of the corporation and had a 50% Stock interest. Jean's nephew, Edmund Jezemski, was vice-president and owned 25% Of the stock. Apolonia Jezemski, wife of Edmund, was secretary-treasurer and held the remaining 25% Of the shares. The corporation had a checking account in defendant Clayton National Bank ever since 1953, and there had been no forgeries prior to the 12 in issue, all of which occurred between February 2 and May 14, 1962. Checks of the corporation required the signatures of all three officers.

It is conceded that Apolonia forged the signatures of the other two officers on the 12 checks in issue and appropriated the proceeds thereof to her own uses and purposes, without any authority from plaintiff corporation or the other officers and stockholders. It was not until May 17, 1962 that the other officers discovered the fact of Apolonia's wrongful conduct. On that day a bank statement was received at plaintiff's office

Page 17

and, from a comparison of the beginning balance of $42,403.86 as of April 30, 1962 and the balance of $17,417.21 as of May 14, 1962, Edmund realized that something was amiss. He examined the checks and noted that the payees included some with whom plaintiff had no dealings. The next day Edmund and Jean informed defendant bank as to the forgeries.

Plaintiff had substantial balances in its checking account in defendant's bank at the times when the forgeries occurred. Bank statements issued at the times hereinafter noted showed the following respective balances:

January 30,1962-- $46,675.07
                February 26, 1962-- $47,331.71
                March 23, 1962-- $49,733.95
                April 30, 1962-- $42,403.86
                May 14, 1962-- $17,417.21
                

Statements were issued by the bank at irregular times 'whenever the sheet was filled up,' and were either mailed or picked up by Apolonia. As the trial court propertly noted, 'the procedure most often practiced was to hand them to Apolonia.' She kept the books of the corporation, attended to its banking, and was entrusted with the duty of reconciling the bank statements with the corporation's books. Thus, she was in an advantageous position to hide her misconduct from the other two officers, at least temporarily until the discovery on May 17, 1962.

The first three forged checks were honored by defendant on the following dates:

$3500-- February 2, 1962
                $5000-- March 30, 1962
                $5000-- April 23, 1962
                

[205 A.2d 756] The bank statements showing these deductions were never seen by plaintiff's other corporate officers but, as the trial judge found, 'were picked up and hidden or destroyed by Apolonia Jezemski, the forger.' She frequented defendant bank because of a series of personal loans and financing matters.

Page 18

Presumably, too, she did so in the performance of her duties as secretary-treasurer of plaintiff. Her husband testified that during the period in question he did miss the statements, inquired about them once or twice at the bank, and was told on one occasion that the statements would be mailed to him and on another occasion that Apolonia had picked them up. He did not ask for duplicate statements.

The bank statement of March 23, 1962 was received by plaintiff. When sent out by the bank is showed a deposit of $3500 on March 7, 1962. This had been made by Apolonia, we presume, to cover the $3500 forged check of February 2, 1962. Thus, at this point, the bank balance coincided with the balance on plaintiff's books. But the March 7, 1962 deposit had been erased from this bank statement after it left the bank, before the other corporate principals saw the statement, thus hiding this evidence of the prior forgery. An item by item checkup would have revealed the discrepancy, but, as Edmund testified, he would usually look only at the balance on the bank statement. No running balance or list of deposits was maintained in the check book. Both Edmund and Jean Wlodkowski testified that they relied upon Apolonia to keep the books and balance the accounts.

The particulars of the other nine forged checks are as follows:

No. Date Payee Amount
                3987 April 27, 1962 Apolonia A. Jazemski $3500.00
                3991 May 1, 1962 Joseph Durham & Co. $4370.00
                3989 May 6, 1962 Dealers Liquor Co. $423.81
                3990 May 6, 1962 Majestic Wine & Liq. $754.01
                3992 May 6, 1962 Goldstein & Goldstein $1703.80
                3993 May 6, 1962 Imperial Dist. Co. $481.75
                3498 May 7, 1962 Frank DiRenzo $900.00
                3971 May 7, 1962 Johnson J. & A. A. Sitass $9500.00
                3972 May 7, 1962 Nicholas Dentino $1380.00
                

As noted above, these nine forgeries were discovered by plaintiff immediately upon receipt of the bank statement mailed on May 16, 1962, and notice thereof was given to the bank the

Page 19

next day. Thereafter, other checks similarly forged by Apolonia were not honored by the bank when they were presented for payment.

The forged checks were taken generally from plaintiff's extra check book available to all officers and kept in the file. Checks issued during this period from the check book normally used were numbered from approximately 3300 to 3418.

Despite their business association, Apolonia and Edmund had been estranged as husband and wife since 1959. While she maintained a room at Rainbow Inn in Clayton, she lived separate and apart from Edmund in another town where she conducted another tavern known as 'Con's Inc.' There was testimony that, about six months before the forgeries, Apolonia had requested what she considered her share of plaintiff's money in the bank. She wanted a third thereof and wanted the other two officers to take a third. This request was refused. Thereupon, she told them that she was going to 'get' her money.

[205 A.2d 757] Apolonia's pressure upon the other two for a split-up of the large amount on deposit was evidently induced by her desperate need of money to pay personal debts. The trial judge observed:

'She appears to the Court as one caught up in the vice of gambling and as a confessed forger and embezzler of thousands of dollars which she converted to her own use. The Court finds her evidence lacking in credibility.'

The trial court found no credible evidence that Apolonia intended to use other than legal means to accomplish her purpose, or that forgery would become her Modus operandi, with all the serious consequences attendant upon such criminal conduct. It gave no credence to a statement in her deposition that she had once threatened to sign all three names on checks, if they did not give her one-third of the money on deposit, and that Jean and Edmund had laughed at her and said, 'Go ahead.' We agree with this appraisal of Apolonia's credibility as to this statement in her deposition, especially in view of

Page 20

her character as a self-confessed forger and the testimony of the other two officers inconsistent therewith.

The trial record shows that Edmund did know, at the time in issue, that one or about July 1, 1961 Apolonia had secured a loan in Philadelphia on an instrument purporting to bear his signature which he had not signed. Edmund was not absolutely certain who had forged his signature on this note, but his wife's signature also appeared on the same note. Edmund's Philadelphia attorney had been handling this matter in an effort to get it settled. However, there is a great measure of common sense in the trial court's observation as to Edmund's knowledge of this Philadelphia matter--that it had not been adjudicated in either the civil or criminal courts that Apolonia had forged her husband's name and 'you would hardly expect a man to go to his bank and say his wife was a criminal and a forger.' Nevertheless, the incident is part of the coloring in...

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15 practice notes
  • Bates v. Valley Fair Enterprises, Inc., No. A--936
    • United States
    • New Jersey Superior Court – Appellate Division
    • 18 Diciembre 1964
    ...of risk. Such knowledge and the degree of risk assumed go only in such case to the issue of plaintiff's contributory negligence, [205 A.2d 753] and the over-all factual issue is the reasonableness of plaintiff's exercise of care for his own safety in the light of all the attendant circumsta......
  • Globe Motor Car Co. v. First Fidelity Bank, N.A.
    • United States
    • Superior Court of New Jersey
    • 3 Diciembre 1993
    ...Un. Tel. Co. v. Peoples Nat. Bank of Lakewood, supra, 169 N.J.Super. at 272, 404 A.2d 1178; Rainbow Inn, Inc. v. Clayton Nat. Bank, 86 N.J.Super. 13, 205 A.2d 753 (App.Div.1965); Forbes v. First Camden Nat. Bank & Trust Co., 25 N.J.Super. 17, 23, 95 A.2d 416 (App.Div.1953); Faber v. Edg......
  • First National City Bank v. Compania de Aguaceros, SA, No. 24137.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • 27 Marzo 1968
    ...Maintenance Co. of Calif. v. Federation Bank & Trust Co., supra, and Rainbow Inn, Inc. v. Clayton Nat. Bank, 398 F.2d 785 1964, 86 N.J.Super. 13, 205 A.2d 753, 759 (in which case the court applied the statute despite certain ambiguities). (2) One year. Clyman v. Marks Glasser, supra, an......
  • Brighton, Inc. v. Colonial First Nat. Bank
    • United States
    • New Jersey Superior Court – Appellate Division
    • 15 Octubre 1980
    ...items..... See Official Comment 1; Bailey, Brady on Bank Checks (5th ed. 1979), § 26.16. Rainbow Inn, Inc. v. Clayton Nat'l Bank, 86 N.J.Super. 13, 23, 205 A.2d 753 (App. Div. 1964), recognizes that the purpose of this statute "was to fix an absolute time limit within which notice of t......
  • Request a trial to view additional results
15 cases
  • Bates v. Valley Fair Enterprises, Inc., No. A--936
    • United States
    • New Jersey Superior Court – Appellate Division
    • 18 Diciembre 1964
    ...of risk. Such knowledge and the degree of risk assumed go only in such case to the issue of plaintiff's contributory negligence, [205 A.2d 753] and the over-all factual issue is the reasonableness of plaintiff's exercise of care for his own safety in the light of all the attendant circumsta......
  • Globe Motor Car Co. v. First Fidelity Bank, N.A.
    • United States
    • Superior Court of New Jersey
    • 3 Diciembre 1993
    ...Un. Tel. Co. v. Peoples Nat. Bank of Lakewood, supra, 169 N.J.Super. at 272, 404 A.2d 1178; Rainbow Inn, Inc. v. Clayton Nat. Bank, 86 N.J.Super. 13, 205 A.2d 753 (App.Div.1965); Forbes v. First Camden Nat. Bank & Trust Co., 25 N.J.Super. 17, 23, 95 A.2d 416 (App.Div.1953); Faber v. Edg......
  • First National City Bank v. Compania de Aguaceros, SA, No. 24137.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • 27 Marzo 1968
    ...Maintenance Co. of Calif. v. Federation Bank & Trust Co., supra, and Rainbow Inn, Inc. v. Clayton Nat. Bank, 398 F.2d 785 1964, 86 N.J.Super. 13, 205 A.2d 753, 759 (in which case the court applied the statute despite certain ambiguities). (2) One year. Clyman v. Marks Glasser, supra, an......
  • Brighton, Inc. v. Colonial First Nat. Bank
    • United States
    • New Jersey Superior Court – Appellate Division
    • 15 Octubre 1980
    ...items..... See Official Comment 1; Bailey, Brady on Bank Checks (5th ed. 1979), § 26.16. Rainbow Inn, Inc. v. Clayton Nat'l Bank, 86 N.J.Super. 13, 23, 205 A.2d 753 (App. Div. 1964), recognizes that the purpose of this statute "was to fix an absolute time limit within which notice of t......
  • Request a trial to view additional results

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