Decided: December 22, 1952.
ELEANOR S. WERBEL, PLAINTIFF-RESPONDENT,
BELLE MULLEN, DEFENDANT-APPELLANT
On appeal from a judgment of the Superior Court, Appellate Division, where the following opinion was filed.
For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling, Jacobs and Brennan. For reversal -- None.
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"The dispositive question projected by this appeal is whether the pleadings, affidavits, interrogatories and depositions exhibited by the record raise a genuine issue of a material fact. Rule 3:56-3; Templeton v. Scudder, 16 N.J. Super. 576, 582 (App. Div. 1951), the trial judge resolved that they did not and entered a summary judgment in favor of the plaintiff.
"In the summer of 1950 an explosion of several barges loaded with munitions was of sufficient intensity to cause considerable damage to property in South Amboy, including the house owned by the defendant. For the repair of the damage to her property she engaged the services of a corporate contractor, to which she made and delivered, in payment her negotiable note in suit for $930 dated September 11, 1950, and payable on November 11, 1950. Prior to its maturity, the contractor-payee, in pursuance of a proper
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corporate resolution, negotiated to the plaintiff 'without recourse' for a consideration which reflected a discount of approximately 7% of their face amounts a number of notes made to and held by it, including the note made by the defendant. At maturity, the defendant refused to make payment of her note on the bases of the alleged improper and incomplete performance on the part of the contractor and claimed fraudulent conduct on the part of its representatives.
"Recently this court determined that an endorsement 'without recourse' is a qualified endorsement under R.S. 7:2-38, and as such it does not impair the negotiable character of the instrument. Eastern Acceptance Corp. v. Kavlick, 10 N.J. Super. 253, 255 (App. Div. 1950).
"Our negotiable instrument statute provides in part as follows:
' R.S. 7:2-52. What constitutes a holder in due course
A holder in due course is a holder who has taken the instrument under the following conditions:
1. That it is complete and regular upon its face;
II. That he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was the fact;
III. That he took it in good faith and for value;
IV. That at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it.'
' R.S. 7:2-56. What constitutes notice of defect
To constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the person to whom it is negotiated must have had actual knowledge of [the infirmity or defect, or knowledge of] such facts that his action in taking the instrument amounted to bad faith.'
"We invite attention to a recent decision of our Supreme Court expository of the general subject matter. Driscoll v. Burlington-Bristol Bridge Co., 8 N.J. 433, 480 (1952).
"Upon a consideration of the evidentiary matter before us in the light of these statutory provisions and their construction, we entertain no difficulty in concluding that plaintiff
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enjoys the status of a holder in due course. Accordingly, any legal claim the defendant may have against her contractor is unavailable as a defense here. Eastern Acceptance Corp. v. Kavlick, supra.
The judgment is affirmed for the reasons expressed in the opinion per curiam filed in the court below.