New Jersey § 12a:3-420

§ 12a:3-420.

a. The law applicable to conversion of personal property applies to instruments. An instrument is also converted if it is taken by transfer, other than a negotiation,

from a person not entitled to enforce the instrument or a bank makes or obtains payment

with respect to the instrument for a person not entitled to enforce the instrument

or receive payment. An action for conversion of an instrument may not be brought by the issuer or acceptor

of the instrument or a payee or indorsee who did not receive delivery of the instrument

either directly or through delivery to an agent or a co-payee. b. In an action under subsection a. of this section, the measure of liability is presumed

to be the amount payable on the instrument, but recovery may not exceed the amount

of the plaintiff's interest in the instrument. c. A representative, other than a depositary bank, who has in good faith dealt with

an instrument or its proceeds on behalf of one who was not the person entitled to

enforce the instrument is not liable in conversion to that person beyond the amount

of any proceeds that it has not paid out.