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Triffin v. Johnston

359 N.J. Super. 543, 821 A.2d 92 (App. Div. 2003)

CHECKS—A buyer of a dishonored check has the burden to show that its assignment of the check is valid and that it is a holder in due course.

A buyer of dishonored checks from a licensed check casher sought to enforce the dishonored checks free of personal defenses based on his status as the assignee of a holder in due course. The drawers of the checks claimed that they stopped payment on the checks because the goods and services for which the checks were issued were not received. The drawers testified that the check casher’s principal visited them to discuss the dishonored checks and acknowledged that the work was not complete. With that as background, the buyer of the checks sought to enforce payment based on the assignments. The lower court rejected his claims, finding that the assignments were not valid because they were altered and did not reference the check numbers of the dishonored checks. The buyer appealed, claiming that the lower court erred by raising the issue of the genuineness of the assignments after the lower court concluded without allowing the buyer to respond or supplement his proofs. He relied on an Appellate Division case that held that a court violates procedural due process by entering judgment on a cause of action that was never pleaded or tried. The Appellate Division rejected the buyer’s argument, noting that in order to win his case, he had to establish that he was a holder in due course and that his assignments were genuine and valid. Here, the buyer did not demonstrate the validity of his assignments before he closed his case. Consequently, the lower court properly determined that he failed to prove the existence of valid assignments, and therefore did not prove his case.

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