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Triffin v. State Metal Industries, Inc.

A-0214-05T2 (N.J. Super. App. Div. 2007) (Unpublished)

CHECKS; ASSIGNMENT — Parties may agree that an assignee may add the assignor’s signature to an assignment, but where the assignment document does not specifically assign the right to sue a bank that has wrongfully debited the assignor’s bank account on account of a bad check, the assignee has no right to pursue that claim.

An assignee of dishonored checks sued the bank that dishonored those checks for payment. He claimed that the bank did not dishonor the checks in accordance with the midnight deadline rule, N.J.S.A. 12A:4-302, and that as the assignee of those checks, he was entitled to reimbursement. The lower court found that the assignee lacked standing to assert a midnight deadline claim and the assignee appealed. The Appellate Division affirmed, noting that the New Jersey Supreme Court, in Triffin v. TD Banknorth, N.A., 190 N.J. 326 (2007), had held that an assignee taking a check after its untimely dishonor and with full knowledge of its dishonor has no vested interest in the timely payment of that check. The Court recognized that the purpose of N.J.S.A. 12A:4-302 is to enforce a bank’s compliance with its statutory duty to timely honor or dishonor checks. The statute’s purpose is not to create a cause of action against the bank for collection of a negotiable instrument.

The assignee also claimed that the bank wrongfully debited its assignor’s account. The lower court found that the assignee’s practice of digitally superimposing a signature onto an assignment agreement while outside the presence of the assignor, and after the sale was completed, did not create a valid assignment. It found that there was never an original document provided under the best evidence rule. As to this holding, the Appellate Division disagreed. It found that testimony of the parties demonstrated that they had agreed to this method of assignment and that they intended for the digitally superimposed signature to be construed as an original document. However, the Court found that the assignment document did not specifically assign the right to sue for wrongful debiting of the account. It noted that if the assignment is deemed an original document, then as an integrated document, no extrinsic evidence can be introduced to change its plain meaning under the parol evidence rule.

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