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    Bliss v. California Coop Producers

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    Trinca Diploma
    This case involves promissory notes executed by agricultural producers to a cooperative. The cooperative later transferred the notes to Bliss after the producers defaulted on the first installment payment. Bliss sued the producers to collect on the notes. The court held that a transferee of an installment note is not a holder in due course if the transfer occurs after one or more installments have come due, unless the past due installments have been paid and the transferee does not have notice that they were unpaid. As the first installments were not paid and Bliss would have been aware of this, Bliss did not qualify as a holder in due course and could not collect on the notes free of the producers' defenses.

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    Bliss v. California Coop Producers

    Uploaded by

    Trinca Diploma
    433 views1 page
    This case involves promissory notes executed by agricultural producers to a cooperative. The cooperative later transferred the notes to Bliss after the producers defaulted on the first installment payment. Bliss sued the producers to collect on the notes. The court held that a transferee of an installment note is not a holder in due course if the transfer occurs after one or more installments have come due, unless the past due installments have been paid and the transferee does not have notice that they were unpaid. As the first installments were not paid and Bliss would have been aware of this, Bliss did not qualify as a holder in due course and could not collect on the notes free of the producers' defenses.

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    This case involves promissory notes executed by agricultural producers to a cooperative. The cooperative later transferred the notes to Bliss after the producers defaulted on the first installment payment. Bliss sued the producers to collect on the notes. The court held that a transferee of an installment note is not a holder in due course if the transfer occurs after one or more installments have come due, unless the past due installments have been paid and the transferee does not have notice that they were unpaid. As the first installments were not paid and Bliss would have been aware of this, Bliss did not qualify as a holder in due course and could not collect on the notes free of the producers' defenses.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    433 views1 page

    Bliss v. California Coop Producers

    Uploaded by

    Trinca Diploma
    This case involves promissory notes executed by agricultural producers to a cooperative. The cooperative later transferred the notes to Bliss after the producers defaulted on the first installment payment. Bliss sued the producers to collect on the notes. The court held that a transferee of an installment note is not a holder in due course if the transfer occurs after one or more installments have come due, unless the past due installments have been paid and the transferee does not have notice that they were unpaid. As the first installments were not paid and Bliss would have been aware of this, Bliss did not qualify as a holder in due course and could not collect on the notes free of the producers' defenses.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    BLISS v.

    CALIFORNIA CO-OP PRODUCERS


    30 Cal. 2d 240
    June 3, 1947
    FACTS:
    The California Co-op Producers was organized to process and ship agricultural
    products through the use of the shipping terminal facilities. Growers of agricultural products
    were to be solicited to use the facilities of the corporation in the marketing of their products.
    Marketing contracts were entered into by the cooperative with many producers. Agricultural
    producers executed non-bearing negotiable notes, payable to the co-operative, in ten
    annual installments, with no acceleration clause. The co-operative agreed to furnish facilities.
    Shidler, Winchester and Galbreath each executed one of the notes. The three makers
    defaulted in the payment of the first installment. Later, while the note is still unpaid, the cooperative negotiated the notes to Bliss to secure payment of the co-operatives note, held by
    Bliss. The co-operative, by reason of insolvency and bankruptcy, was unable to continue
    to perform its obligation in its contracts with the producers, including the makers of the
    three notes. The co-operative defaulted in payment to Bliss. Bliss sued the makers on
    their notes. Judgment was given for plaintiffs against defendants and appellants Shidler,
    Winchester and Galbreath on three promissory notes of which they were the makers. Their
    defenses, among others, were fraud and failure of consideration.
    ISSUE: Whether a transferee of an installment note is a holder in due course where the transfer
    is made after one or more but less than all of the installments are due.
    HELD: No.
    A transferee of an installment note is a holder in due course as to the installments to
    mature in the future when the transfer is made after one or more but not all of the installments
    are due on its face unless the past due installments have not in fact been paid and he has
    notice of that fact. Under the negotiable instruments law and the common law, the transferee of
    an installment note is not a holder in due course as to any part of the note when the transfer has
    been made after the maturity of one or more but less than all of the installments.
    One may assume that the regular course of business has been followed, and that each
    installment was paid when due. It is not significant, like it is where the whole principal is
    overdue, that the note is still in the hands of the payee or holder. Where the whole principal is
    overdue, that should warn the transferee that the note probably has been dishonored and there
    may be some reason for it which would constitute a defense. The possession by the payee or
    holder of an installment note before all of the installments are due does not signify dishonor. The
    holder would necessarily retain it for collection of the balance of the installments. If, however,
    the installments due on the face of the instrument have not been paid and the transferee has
    notice of that fact, he is put on inquiry that there may be some defenses against it and he
    cannot be a holder in due course. As held in one case: where the principal of a note is payable
    in installments and one installment is overdue and unpaid at the time of transfer of the note, the
    transferee is not a holder before maturity and hence is not a holder in due course, unless he
    does not take with notice of the past-due installment.

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