254 P. 642 | Cal. Ct. App. | 1927
The plaintiff, as assignee of Central Finance Company, a corporation, brought this action to recover the amount of six trade acceptances drawn by J.B. Vallen, doing business as Cadillac Manufacturing Company, upon defendants and duly accepted by them. They are all of one series, dated February 2, 1923, and payable 65, 70, 75, 80, 85, and 90 days respectively after date. They are all identical in amount and in terms except as to time of payment. The first one of the series reads as follows:
"Trade Acceptance $105.00 San Francisco, California Feby 2, 1923. Date of Sale.
To Ives Hdw CoDealers Name. 6th St Los Banos CalifStreet Address Town and State Sixty Five Days after date pay to the order of ourselvesdays or Months. at San Francisco, Calif One Hundred and Five and no/100 Dollars. *655
This is one of a series of Trade Acceptances. Failure to pay any when due gives holder the option to declare any or all of the series due and payable. If action is instituted hereon, the undersigned promise to pay a reasonable attorney's fee in any such action.
Accepted at Los Banos Calif. On Feb 2 1923 Dealer's Town Same date of Order. Payable thru Portuguese American Bank Name of Dealer's Bank. Cadillac Mfg. Co. Located at Los Banos Calif Ives Hdw CoSignature of Acceptor or Trade Name By WL Foskett. J.B. VallenAuthorized Buyer.
The obligation of the acceptor hereof arises out of the purchase of goods from the drawer."
All of these acceptances were sold to the Central Finance Company February 6, 1923, for a valuable consideration. They were indorsed on the back thereof, "Cadillac Mfg. Co. by J.B. Vallen Mgr. Demand, notice nonpayment and protest hereby waived. Cadillac Mfg. Co. By J.B. Vallen, Mgr." All of the instruments, after the maturity thereof, were assigned by the Central Finance Company to the plaintiff for collection. Vallen procured the instruments through fraud and the goods in payment for which they were given were never delivered. The court found:
"That each of said six trade acceptances or bills of exchange provided, that upon the default in the payment of any one of the series, said acceptances setting forth the fact that each was one of a series, all others would become due and payable at the option of the holder of the one whereof default in payment had been made; that said trade acceptance or bills of exchange did not in any way identify any of the others of the series, and the court finds that said trade acceptance or bills of exchange are non-negotiable. . . . That the plaintiff took each and all of said trade acceptances or bills of exchange after maturity and at a time more than one month after the first one became due; that no consideration therefor was paid by the plaintiff; and that the plaintiff took by an assignment, not made or endorsed upon the original trade acceptance nor upon any paper attached to the same." *656
Judgment was entered in favor of the defendants and the plaintiff has appealed therefrom.
[1] Respondents contend that the fact that the trade acceptances were given for the purchase price of goods "was sufficient notice to put the purchaser, Central Finance Company, on guard to ascertain if in fact goods had been sold by the drawer. The Central Finance Company knew Vallen, and knew him to be a dealer in paper for it had bought other paper from him prior to this transaction. . . . It knew that Vallen was not a dealer in commodities. Why then should he have paper reciting the fact that he sold commodities? With these facts before it, the Central Finance Company cannot truthfully say that it took paper as abona fide holder for value and without notice." Respondents have not called attention to any evidence to the effect that "Vallen was not a dealer in commodities" and none has been discovered. [2-4] The purchase of the instruments by the Central Finance Company appears to have been made in the usual course of the business in which it was engaged and the record does not show anything to create a suspicion even which should have put the company on inquiry. It purchased the instruments for their full value, less a discount of five and one-half per cent. If the facts were as stated by respondents they would not show that the company is not a holder in due course. (8 C.J. 501;Popp v. Exchange Bank,
[5] Respondents' main contention is that the acceleration clause in the instruments rendered them non-negotiable. In support of this contention several California cases, decided before the enactment of the Uniform Negotiable Instrument Law, are cited. In Utah State National Bank v. Smith,
The judgment is reversed.
Plummer, J., and Hart, J., concurred. *659