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Detrolio v. First Union Bank

A-3974-02T1 (N.J. Super. App. Div. 2003) (Unpublished)

BANKS—Regardless of when the account was first opened, it is presumed that if the successor to a bank passbook holder presents the bank with a passbook showing no activity for more than 15 years, the account had previously been paid by the bank, and the presenter has the burden of showing otherwise.

In response to a 1996 New Jersey Supreme Court case, the Legislature adopted a statute regarding passbooks presented to financial institutions where “the financial institution has no record of the account and there is no record of payment of the account” to the state’s escheat fund. It sets forth that: “If the presentation of the passbook is made by a successor of the owner more than 15 years after the date of the passbook, the shall be a rebuttable presumption that the account was paid in full to or on behalf of the owner or to a successor of the owner. The passbook itself does not rebut this presumption.” Here, an executor found five passbooks, four of which were cancelled and one with a remaining balance. The last entry in that passbook was seventeen years before the decedent died. The Court found that “the statute unquestionably applie[d] to this case.” It rejected the executor’s argument that the statute applied only to accounts for which there were records on the effective date of the statute. It believed that “the language of the statute [could] mean only that it applie[d] even if the bank did not have records for the account on the effective date of the statute.” Further, it rejected the executor’s attempt to rebut the presumption by demonstrating that because four of the books had been cancelled and this one was not, the account must still be open. Here, the bank in question was successor to the bank that had issued the passbook. Nonetheless, it didn’t matter that the successor bank admitted that the passbook was valid and admitted that it took over all of the predecessor bank’s records. According to the Court, the bank’s admission, as characterized by the executor, appeared “inaccurate inasmuch as the acquisition was of open [] accounts.”

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