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December 22, 1989


The opinion of the court was delivered by: BISSELL

 By this Court's opinion and order entered November 30, 1988, Counts I through VI of the complaint were dismissed. The parties recently appeared before the Court to submit to the Court for resolution certain issues underlying Count VII of the complaint, the only remaining claim in the case. That submission was presented pursuant to a number of stipulated facts which included the following:

 1. The outstanding principal due on the Non-Negotiable Promissory Note ("the Note") dated January 3, 1977 between the parties is $ 179,197.21.

 2. No payments of principal have been made since January 3, 1984.

 3. On or about January 3, 1986, plaintiff received from defendant a cashier's check drawn on Home Savings Association of Florida in the amount of $ 18,316.17 in payment of interest upon the Note for the period January 3, 1984 through December 31, 1985. *fn1"

 4. This cashier's check in payment of interest has been held by plaintiff and/or her attorney since its receipt. It has neither been presented for payment nor returned.

 5. On January 10, 1986, defendant Charlotte Brown Keister (f/k/a Charlotte Gabriel) ("the defendant") served upon plaintiff through her counsel an Offer of Judgment against that defendant in the sum of $ 179,197.21, the principal balance on the Note. That Offer of Judgment was filed with this court on January 13, 1986, and a copy thereof is appended to this opinion and incorporated by reference.

 6. The original of the Note could not be produced at the hearing.

 8. Upon conclusion of proceedings before this Court, an order of final judgment in favor of the co-defendant Lilian Maria Brown will be entered, dismissing all claims against her.

 The issues submitted to this Court for resolution were the following:

 A. May the plaintiff maintain a claim upon the Note, or the debt underlying it, despite being unable to produce the original at the trial?

 B. Was the transmittal of the cashier's check described above an effective tender of interest which had accrued through December 31, 1985, and did it remain so by reason of plaintiff's retention of that instrument?

 C. Did the filing and service of the aforementioned Offer of Judgment, even though unaccepted by the plaintiff, preclude plaintiff from asserting a claim for any interest from and after the date of the Offer of Judgment?

 D. If plaintiff remains entitled to interest from and after December 31, 1985, at the 5% rate reflected in the Note, how shall it be calculated?

 The Court will proceed to resolve the above issues in the order stated.

 A. The parties agreed at trial that exhibit P-6 was an accurate copy of the Note, albeit without the signature of the defendant Charlotte Brown Keister. The plaintiff testified before this Court that she had received the fully executed original of the Note and deposited it in a safe deposit box, which she still maintains, at Morgan Guaranty Trust Company, 59th and Madison, New York, New York. Over the years she occasionally removed papers from that safe deposit box, but has no recollection of either removing or not removing this Note. She has recently searched not only that safe deposit box but other reasonably conceivable locations where the Note might be, to no avail. Despite acknowledging some financial transactions with others since the execution of the Note, the plaintiff has neither delivered, assigned nor pledged that note to any other person.

 N.J.S.A. 12A:3-804 provides in its entirety as follows:

The owner of an instrument which is lost, whether by destruction, theft or otherwise, may maintain an action in his own name and recover from any party liable thereon upon due proof of his ownership, the facts which prevent his production of the instrument and its terms. The court may require security indemnifying the defendant against loss by reason of further claims on the instrument.

 This Court finds that the plaintiff has established that the original Note is indeed lost, in all likelihood for many years. At no time has any other party ever made any claim against either the plaintiff or the defendant based upon that Note. An admittedly true copy of the Note has been introduced into evidence thereby establishing the rights and obligations of the respective parties on this undertaking. Accordingly, plaintiff has satisfied the requirements of § 804 set forth above. Furthermore, because the likelihood of another party's making any "claims on the instrument" is extremely remote, the Court will not require the plaintiff to post security to indemnify the defendant against any such potential claim.

 C. Defendant argues that, whether considered under Fed.R.Civ.P. 68 (Offer of Judgment) or N.J.S.A. 12A:3-604 (Tender of Payment), her Offer of Judgment of January 10, 1986, in an amount accurately stating the principal balance due, is effective to bar plaintiff from asserting any ...

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