On appeal from Superior Court of New Jersey, Law Division, Union County.
Brody, Gruccio and D'Annunzio. The opinion of the court was delivered by Brody, J.A.D.
[246 NJSuper Page 275] The trial judge held that plaintiff is a holder in due course of a $75,000 note payable August 10, 1989. Defendants Diab and Golden, makers of the note, had made the note payable to third-party defendant Anderson who assigned it to plaintiff on May 25, 1989, to satisfy Anderson's $70,000 antecedent debt to plaintiff and plaintiff's wife.*fn1 In return for the note, plaintiff's attorney sent to Anderson's attorney a written release*fn2 of
Anderson's debt with a covering letter containing the following instruction: "Please hold [the release] in escrow pending my client's receipt of the sum of $75,000." Diab and Golden have raised several defenses to the note that are not available if plaintiff is a holder in due course.
Defendants argue that plaintiff is not a holder in due course. The precise issue they raise is whether plaintiff gave value for the note in view of the conditional nature of his release of Anderson's debt. Judge Lawrence Weiss granted plaintiff's motion for partial summary judgment, holding that plaintiff had given value.*fn3 The judge relied on Altex Aluminum Supply Co. v. Asay, 72 N.J. Super. 582, 585, 178 A.2d 636 (App.Div.1962), a case governed by the Negotiable Instruments Law, where we said:
It is settled law that a party taking a negotiable instrument in payment of, or as security for, an antecedent debt, is a holder in due course. Citrin v. Tansey, 107 N.J.L. 368 [153 A. 523] (E. & A. 1931). Cf. Colozzi v. Bevko, Inc., 17 N.J. 194, 209 [110 A.2d 545] (1955). This is so even though satisfaction of the antecedent debt is conditioned on actual payment of the note. Citrin v. Tansey, supra; Ahern v. Towle, 310 Mass. 695, 39 N.E. 2d 561 (Sup.Jud.Ct.1942); Brannan, Negotiable Instruments Law (7th ed. 1948), § 25, pp. 515-516.
Defendants contend that a change in the definition of value brought about by adoption of the Uniform Commercial Code, N.J.S.A. 12A:1-101 et seq., requires a different result. We disagree and affirm.
Value is defined in N.J.S.A. 12A:3-303, which provides:
A holder takes the instrument for value
(a) to the extent that the agreed consideration has been performed or that he acquires a security interest in or a lien on the instrument otherwise than by legal process; or
(b) when he takes the instrument in payment of or as security for an antecedent claim against any person ...