On appeal from a judgment of the Camden City District Court.
For the plaintiff-appellant, Benjamin F. Friedman.
For the defendants-appellees, Kenworthy & Clark.
Before Justices Case, Donges and Porter.
The opinion of the court was delivered by
DONGES, J. This is an appeal from a judgment of the District Court of the City of Camden in favor of the defendants and against the plaintiff in a suit upon a promissory
note. It appears by the agreed state of case that the defendants-respondents purchased a quantity of furniture from Louis-Harold Furniture Company, making a down payment of $75 and executing the note in suit in the sum of $344.95 and a conditional sales contract. At the time of execution the note and the conditional sales contract were attached, but the note was detached before the institution of the suit.
The note and the sales contract were sold by Louis-Harold Furniture Company to the plaintiff, B.A.C. Corporation. The transaction called for monthly payments upon the indebtedness of $22.99 by the defendants and three such payments were made. Defendants-respondents refused to make further payments because of alleged defects in the furniture. There was ample testimony, which was accepted as depicting the true situation by the trial court, to the effect that the furniture delivered did not conform to the sample exhibited, that the top of the wardrobe split, the front leg came off, and it was otherwise defective.
The position of the defendants was and is that the plaintiff is not a holder in due course of the note; that in this suit all defenses that would be available to defendants in a suit by the vendor of the furniture are available to them; and that, by reason of the defective condition of the furniture, there was a breach of contract by Louis-Harold Company which absolves defendants from liability.
The sole question argued and presented here for determination is whether or not such a defense may be raised by the defendants in a suit of this character.
The respondents rely upon the recent case in the Court of Errors and Appeals of General Contract Purchase Corp. v. Moon Carrier Corp., 129 N.J.L. 431, and state that the applicable rule is "where a bill or note refers to or is accompanied by a collateral, contemporaneous, agreement or the purchaser has actual knowledge of the same, he takes subject to its contents or conditions." We think the Moon case is clearly distinguishable from the present one. In that case the defendant gave the note in payment of ...