Westlake Mercantile Finance Corp. v. Merritt

PRESTON, J.

On April 30, 1925„ under the trade namo of Aristocrat Distributing Company, one J. B. Vallen entered into a contract in writing with Chas. A. Merritt and Chas. A. Parlier, a copartnership, doing business under the

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name of Merritt and Parlier, with reference to the sale and delivery by the former to the latter of a certain number of dishwashing machines. The contract need not here be set out other than to state that it was never fulfilled on the part of the Aristocrat Distributing Company, and there is no pretense that its covenants were observed. At the time of the making of the contract, and as a part of the transaction, Merritt and Parlier accepted two drafts or trade acceptances drawn by the Aristocrat Distributing Company, payable to themselves, alike except as to date of maturity, for $420 each, and payable sixty and ninety days after date, respectively. The material part of the earliest of these acceptances is here set forth:

“No. -, Los Angeles, Calif. 4/30, 1925, date of sale. $420 to Merritt & Parlier, San Jose, Calif., on June 30th, 1925. Pay to the order of ourselves at Los Angeles, Calif., the Sum Of Four Hundred Twenty and 00/100 Dollars. The obligation of the acceptor hereof arises out of the purchase of goods from the drawer, maturity being in conformity with original terms of purchase. Accepted at San Jose, Cal. Dealer’s Town on 4/30, 1925, Date of Order. Payable thru Security State Bank, San Jose, Cal., Dealer’s Bank. Merritt & Parlier, Trade Name of Acceptor. By Chas. A. Merritt, Authorized Acceptor. Aristocrat Distributing Co., J. B. Vallen.”

Plaintiff, alleging itself to be a holder in due course (Civ. Code, sec. 3133) of these instruments, sued the defendants as acceptors thereof for the amounts specified therein. Defendant copartnership, pleading the non-negotiability of said instruments introduced and proved an uncontradicted defense to said obligations unless plaintiff can be said to be an innocent purchaser thereof for value. Plaintiff showed a payment of $786.90 for said instruments and that it was ignorant of all infirmity in them. The whole question turns upon the negotiability or non-negotiability of said drafts and this question must be determined from the face of the instruments themselves.

(International Finance Co.