For affirmance -- Chief Justice Hughes, Justices Mountain, Sullivan, Pashman, Clifford and Schreiber and Judge Conford. For reversal -- None. The opinion of the Court was delivered by Conford, P.J.A.D., Temporarily Assigned.
Plaintiff, as the sole surviving testamentary trustee of the William O. Allison estate, brought this action to recover for the conversion of assets of the estate. The Chancery Division held there was no cause of action against respondent Jenny G. Martin and her husband, Roy I. Martin, who had received a check on funds belonging to plaintiff's trust estate in payment for a mortgage sold by the Martins to the late Walter D. Van Riper under circumstances to be related. The Chancery Division held that the Martins were free from liability, inter alia, as holders in due course of the check in question. The Appellate Division affirmed for the reasons stated in the oral conclusions of the trial judge. We granted certification, 68 N.J. 489 (1975), and now affirm.
Plaintiff and Van Riper, a since deceased member of the New Jersey bar, were testamentary trustees under the will of William A. Allison, deceased. All of the assets of the trust were held by a New Jersey corporation, Allison Land Company. Title to the shares of that corporation was in the names of the trustees as such. At the same time Van Riper was sole owner of all the shares of a New Jersey corporation named New Jersey Investors, Inc.
On January 30, 1970 Van Riper telephoned Daniel Amster, the attorney for the Martins, expressing an interest in acquiring a mortgage held by the Martins on property owned by people named McGowan. Amster answered this inquiry by letter on February 2, 1970 informing Van Riper that the principal balance on the mortgage was $34,444.88, together with interest from November 28, 1969 at 6%. After another telephone call from Van Riper, Amster sent Van Riper on June 5, 1970 photocopies of the mortgage and of the Last Will and Testament of the late Ivar Martin. In his cover
letter, Amster solicited suggestions from Van Riper as to the manner in which the mortgage might be assigned.
Van Riper wrote Amster on June 9, 1970 acknowledging receipt of the letter of June 5 with its enclosures, and saying:
"I am prepared to take over the assignment of this mortgage and would suggest doing so as of the 16th instant * * * I suggest you let me have the exact amount that will be due as of the 16th and I will have a certified check for you. The assignment should run to New Jersey Investors, Inc., a New Jersey corporation."
Van Riper's June 9 letter and all subsequent correspondence from him were on his law firm stationery.
On June 12, 1970, Amster's office forwarded to Van Riper an original and a copy of an assignment of the McGowan mortgage made out to New Jersey Investors, Inc. as assignee. Also enclosed were an original and copy of an estoppel certificate, and the original bond and mortgage. These documents were to be held in escrow by Van Riper until receipt by Amster of $36,812.40.
On June 16, 1970 Van Riper wrote Amster's office acknowledging receipt of the above documentation and stating that: "In payment thereof, I am enclosing herewith our check to the order of Jenny G. and Roy I. Martin in the sum of $34,156.01."*fn1 The letter further stated that, since the check was certified, Van Riper was proceeding to record the assignment. The check enclosed with Van Riper's letter was drawn on the account of Allison Land Company, 744 Broad Street, Newark, New Jersey, and was signed by Walter D. Van Riper, as President, and Gerald J. Kent, as Secretary. It was dated June 16, 1970 and contained the notation, "Mortgage purchase".
Amster's secretary forwarded the check to Roy I. Martin under cover letter dated June 17, ...