Naglee & Parrott v. Lyman

Citations

• 14 Cal. 450

Syllabus

<p>A letter of credit, promising unconditionally to accept bills drawn upon its faith, is deemed, under our statute, an actual acceptance in favor of a person who, upon its faith, receives a bill so drawn, for a valuable consideration.</p> <p>It is no objection to recovery on a bill, that, by special indorsements on it, title is shown out of the payee, without any retransfer from the last indorsee to him, if there be proof that the indorsements were made simply for collecting the bill, and that the indorsees had no interest in it.</p> <p>If, when a creditor takes a bill before maturity, as collateral security for an antecedent debt, there be any change in the legal rights of the parties in relation to such debt, the creditor becomes a holder for value, and the bill is not subject to the equities between the original parties.</p> <p>In this State, taking such collateral security changes the legal rights of the parties, as it operates as a surrender, by the creditor, of the right to attach the property of the debtor, and this surrender is a sufficient consideration for the security.</p> <p>The transfer to a receiver, by order of Court, of the effects of an insolvent, in the suit of a judgment creditor, is not an assignment absolutely void under the Insolvent Act of 1852, according to any decisions of this Court, but only void as against the claims of creditors. The cases of Cheever v. Hays, (2 Cal. 471,) and of Adams v. Woods et al. (8 Id. 152,) on this point, explained.</p>