Hellman Commercial Trust & Savings Bank v. Armstrong

CONREY, P. J.

This action was brought by respondent to recover judgment against appellant on a promissory note made and executed by appellant to one E. E. Hewlett, dated March

21, 1913, for

the sum of twenty-five thousand dollars, due nine months after date. Defendant appeals from the judgment.

The plaintiff sued as pledgee of the note, alleging that the same had been indorsed and delivered to it by Hewlett as security for certain notes executed by him. The trial court found that the consideration for the Armstrong note, as between the defendant and Hewlett, had wholly failed; and also held that that was a negotiable instrument, and that the plaintiff, as pledgee, acquired the same as an indorsee in due course.

The note in question is similar to one which came before this court in

Eastman

v.

Sunset Park Land Co.,

35 Cal. App. 628, [170 Pac. 642]. In that case the negotiability of the note was attacked upon the same grounds which are presented by appellant here. On the authority of that decision, we hold that the Armstrong note was a negotiable instrument.

[485]

On May 14, 1913, Hewlett executed to plaintiff a note for eleven thousand dollars. This was done in consideration of the cancellation of an unsecured eleven thousand dollar note previously executed by Hewlett to the All Night and Day Bank, which had been assigned and delivered by that payee to the plaintiff. Hewlett had executed to the All Night and Day Bank two other unsecured one-day notes, of which one was for nine thousand dollars, dated May 1, 1912, and the other was for two thousand five hundred dollars, dated February 1,1913, both of which had been transferred to the plaintiff. The eleven thousand dollar note of date May 14, 1913, executed by Hewlett to the plaintiff, referred to the security given by Hewlett as follows: “I hereby pledge to and deposit with said bank as collateral security for the payment of this or any other liability or liabilities of mine to said bank when due, or to become due, or may hereafter be contracted, the following property: Note of Le Roy Armstrong dated March 21, 1913, due 9 months, for $25,000, and certificate No. 30 for 187 shares of the capital stock of the Pacific Coast Motor Car Company, the market value of which is now-dollars.”