Hawley

Appellant corporation is in the business of financing automobile dealers. Respondent was the Studebaker distributor in Imperial County. Appellant floored one sedan automobile and one automobile truck for respondent and accepted as to each a trust receipt and time draft which constituted the agreement of the parties as to each vehicle. Appellant filed this action in two counts to recover the unpaid balance of the amounts which respondent agreed to pay for the automobile and truck, according to the trust receipt-time draft transaction after respondent had placed the vehicles with a subdealer who had sold them and absconded with the proceeds. The case was tried before the court sitting without a jury, resulting in a judgment in favor of respondent. The judgment also allowed respondent a recovery against appellant on a cross-complaint for payments which respondent had made to appellant to apply on the purchase price of the cars in question after the subdealer had disposed of them. Judgment was duly entered. Appellant moved the court for a new trial, which motion was denied.

On July 6, 1936, the respondent signed a dealer’s application for flooring plan accommodations. Thereafter…