Is Bank Liable for An Employee Who Acknowledged a Forged Signature ?
In Commercial Union Insurance Co. of New York v. Burt Thomas-Aitken Construction Co., 49 N.J. 389, 230 A.2d 498 (1967), a bank employee (a notary) acknowledged a signature that was later claimed to be a forgery and the injured party sued the Bank.
The court held that the bank was not liable for two reasons: first, the court noted that a notary public is a public official empowered by the state, not the bank, and as such exercises a power the bank does not possess; the notary is thus not performing the Bank's work. Commercial Union, 49 N.J. at 394, 230 A.2d at 500.
The second reason is that there was no evidence that anyone was relying on the bank and/or its reputation in choosing this particular notary. Commercial Union, 49 N.J. at 394, 230 A.2d at 500.