Baruch Investment Co. v. California Equities, Inc.

SCHAUER, J. Plaintiff brought this action seeking recovery of a fund of $9,875.25 held in escrow by defendant Bank of Belmont Shore, hereinafter called the bank, to which fund defendant California Equities, Inc., hereinafter called [768]defendant, also lays claim. Judgment went for plaintiff, and defendant appeals. We have concluded that the trial court correctly held for plaintiff and that judgment should be affirmed.

Both plaintiff and defendant are in the business of factoring accounts receivable. The chronology of events leading up to this litigation is as follows:

February 7, 1955. Defendant entered into a written factoring agreement with Modern Crane and Conveyor Company, Inc., hereinafter called Crane. Under this agreement Crane agreed to sell and defendant agreed to buy from Crane “at the net face amount of invoices less three (3%) per cent, accounts receivable created by” Crane’s sales on such sales “as shall be approved by” defendant, and defendant agreed to “be responsible for payment when the goods have finally been accepted by” Crane’s customers.

March 10, 1955. Defendant and Crane filed in the office of the county recorder (Los Angeles), pursuant to the provisions of sections 3017 through 3029 of the Civil Code, a notice of assignment of accounts receivable. The notice had been executed by defendant and Crane on February 7, 1955, was signed by both parties thereto, and recited that they thereby gave notice that Crane, as assignor, “expects to assign, or has assigned, an account or accounts receivable now existing or hereafter arising,” to defendant as assignee, and that “the general nature of the business out of which such accounts arise is Manufacturing.”

July 30, 1955. Crane executed a written assignment to defendant of “certain accounts receivable identified as follows:

“Date of Contract 7-30-55 Contract Number N3883S-16654A

Amount $98,505.00.”

The findings and the evidence show that this “Number N3883S-16654A” was a United States Navy prime contract to supply hydraulic jacks.

Some time prior to November 9, 1955, defendant, according to allegations in its answer, under the terms of its above described assignment from Crane became the owner and assignee of an “indebtedness to” Crane in the sum of $9,704.41 representing the unpaid balance on Invoices Numbers 1737, 1820, and 1824, which invoices were dated as of July and August, 1955, and indicated the delivery to the Navy of certain jacks under the Navy contract. The uncontra