Faivret

Robert Faivret brought an action for conversion of certain merchandise held by the defendant Bank as pledgee. The case was tried without a jury. In its memorandum opinion the trial court found as facts that plaintiff entered into arrangements with defendant for financing a merchandise jobber business to be conducted by plaintiff in San Francisco. Under the plan, merchandise purchased by Faivret was to be placed in a field warehouse established on his premises and warehouse receipts covering the same were to be issued to the Bank. The Bank would then lend up to 85 per cent of the invoice price of the merchandise so purchased, all purchases to be subject to the approval of the Bank. A “blanket release” agreement provided for the release to Faivret of $3,000 worth of merchandise each week. When this was sold the resulting accounts receivable were assigned to the Bank which was to lend 90 percent of the invoices covering such sales, the accounts also being subject to the Bank’s approval.

*829 Shortly after this arrangement and in the early part of 1944, the Bank advised Faiv-ret that the accounts receivable entailed too much work and asked him to secure another financial arrangement,…