On cross-appeals from the Supreme Court, whose opinion is reported in 133 N.J.L. 285.
For the appellants, Irvin M. Lichtenstein.
For the respondent and cross-appellant, Altman & Backer (Samuel Backer and Emerson L. Richards, of counsel).
The opinion of the court was delivered by
HEHER, J. The action is upon a promissory note made by defendant Taub to the order of Riker & Company, Inc., and indorsed by Taub and the defendant Ostroff. The answer introduced by Taub and Ostroff was struck out as either sham or frivolous; and there was summary judgment for plaintiff. The Supreme Court affirmed the judgment against Ostroff, but reversed as to Taub and directed the issuance of a venire de novo. While the appeal was taken in the names of both defendants, they attack only the judgment against Ostroff. Plaintiff's cross-appeal challenges the Supreme Court's reversal of the judgment against Taub.
The note in suit evidences the maker's promise to pay the payee, a real estate broker not licensed as such under R.S. 45:15-1, et seq., a commission for negotiating a sale of the Strand Hotel property in Atlantic City; and the primary question at issue is whether the note is void and therefore unenforceable against either the maker or the indorsers, even in the hands of a holder in due course. The contention is also made that both indorsements were affixed after the delivery of the instrument to the payee broker, and without a
new, independent consideration, and no contractual liability could thereby arise.
If the note has the qualities of a negotiable instrument, there can be no doubt that plaintiff is a holder in due course, and there is no issue of fact in that regard. The contention contra is sham. There is no competent testimony tending to overcome plaintiff's specific proof in that behalf.
Turning to the basic question, the insistence is that the note is void ab initio, in that it stems from "a transaction prohibited by statute and contrary to public policy," and, by the same token, is a non-negotiable instrument, and plaintiff is not a holder in due course entitled to the protection accorded such by the Negotiable Instruments Act, R.S. 7:2-1, et seq. The cases of Kenney v. Paterson Milk and Cream Co., 110 N.J.L. 141, and Fisher v. Brehm, 100 Id. 341, are cited in support of these propositions.
But the subject-matter of Fisher v. Brehm was a check given in payment of a gambling debt; and it was held void, and therefore unenforceable by a holder in due course, under the express provision of section 3 of the Gaming Act of 1877 (Comp. Stat. 1910, p. 2623; now R.S. 2:57-3) that all such contracts "shall be utterly void and of no effect." The Real Estate Brokers Licensing Act, supra, is not so framed. It prohibits engagement in such brokerage business without the license therein provided; and its sanctions consist solely of pecuniary penalties recoverable by the commission therein created in the several District Courts and Courts of Common Pleas, with imprisonment for a period not exceeding thirty days as the alternative if there be default in payment of a judgment therefor.
The question is one of legislative intention. The particular statute is to be construed in the light of the provisions of sections 55, 57 and 59 of the Negotiable Instruments Act (R.S. 7:2-55; 7:2-57, 7:2-59) that the "title" of a person who "negotiates an instrument is defective" within the intendment of the act "when he obtained the instrument, or any signature thereto, by fraud, ...