Goldmann, Kilkenny and Collester. The opinion of the court was delivered by Collester, J.A.D.
Defendant Joseph Shulman appeals from a summary judgment granted by the Bergen County Court in favor of plaintiff James Talcott, Inc. (Talcott) for $25,124.60 in a suit on a negotiable promissory note. The issues on this appeal are (1) whether the pleadings, affidavits and depositions filed showed a genuine issue of material facts precluding the entry of summary judgment, and (2) whether plaintiff occupied the status of a holder in due course of a negotiable instrument.
Defendant is a New Jersey resident engaged in the practice of dentistry. One Jerome Wallens of Atlanta, Georgia, who was related by marriage to defendant, was president of Franchised
Business Opportunities, Inc. (Franchised Business), which corporation was a sales agent for Sayve Corporation of America (Sayve). Sayve was a manufacturer and manufacturer's representative for the sale of portable laundry establishments and equipment.
In 1959 defendant became interested in a proposed venture to install a coin-operated laundry business in Georgia. As a result, a corporation known as Professional Investment Corp., Inc. (Professional Investment) was organized in Georgia, in which defendant and others became stockholders. Defendant was elected president.
On October 15, 1959 Professional Investment purchased the equipment and a portable building required to install a coin-operated laundry in Atlanta from Franchised Business for $33,932.50. As part of the transaction, Professional Investment executed a conditional sales contract with the seller and delivered over its promissory note to Franchised Business in the sum of $27,007.52 as part of the purchase price. Defendant signed the note as a comaker.
The note was payable in 59 successive monthly installments of $450 each and a final installment of $457.50. It further provided that payments would be made at the office of plaintiff James Talcott, Inc. in New York City, "or at such other place as the holder hereof may from time to time appoint."
The conditional sales contract contained the following provision:
"Seller may transfer and sell this agreement and note to James Talcott, Inc., 225 Fourth Avenue, New York 3, New York, in which event assignee shall have all the rights of the Seller hereunder and Buyer agrees to pay the unpaid balance owing to James Talcott, Inc., on due dates. Buyer agrees that Buyer's obligation hereunder shall be unaffected by any default or obligation of the Seller arising out of the sale of the chattels or otherwise and agrees not to interpose any claim against the Seller as a defense, offset or counterclaim in any action by assignee upon this contract or said note."
Following the execution of the conditional sales contract and promissory note, Franchised Business assigned the contract and transferred the note by endorsement to Sayve.
Plaintiff is an industrial finance company. On September 11, 1959 it had entered into an agreement with Sayve whereby it agreed to purchase from the latter conditional sales contracts, installment sales paper, promissory notes and other forms of obligation acceptable to plaintiff, arising out of a sale, lease ...