General Securities Corp. v. Reo Motor Car Co.

Defendant was at the time of the transaction which gave rise to this litigation engaged in the business of selling automobiles to dealers and plaintiff was engaged in the business of buying conditional sale contracts on automobiles from dealers who were selling automobiles to purchasers on such contracts. The car handled by defendant was known as the “Reo,” and one F. S. Stewart was the Reo dealer in the city of Santa Barbara. Stewart conducted a business establishment in that city in which he was engaged in the business of buying and selling automobiles and in which he displayed automobiles for sale to the general public. On January 23, 1922, defendant sold to F. S. Stewart the automobile described in the complaint by conditional sale contract. This automobile was delivered to Stewart and by him displayed for sale in Ms place of business at Santa Barbara. On February 8, 1922, Stewart drew up a conditional sale contract purporting to sell the ear to one L. C. Simmons, the contract reciting a valuable consideration. Thereafter, Stewart, in the ordinary course of business and for a valuable consideration, sold the Simmons conditional sale contract to plaintiff. At that time…