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Show FACE FOUR 3 WEDNESDAY, JULY 5, 1972 THE DAILY RECORD 9 In The Supreme Court Of The State Of Utah The defendant concedes that plaintiff was a holder; the issue to be re(c) solved is whether he took the instrument (a) for value; (b) in good faith;-anwithout notice of the bank's'claim to it; so as to qualify as a holder in due course, U. C. A. 1953. Section E. Keith Howick, Plaintiff and Respondent, v. 70A-3-302- Bank of Salt Lake, Defendant, Third-Part- y (l), 3, U. C. A. The element of value appears to be established. Section or transaction conduct the in 1953. "Good faith" is defined as honesty in fact U. C. A. 1953. A person has notice of a fact concerned, Section when (a) he has actual knowledge of it; (b) has received notification of it; or (c) from all the facts and circumstances known to him at the time in question he has U.C.A. 1953. As previreason to know that it exists. Section ously noted, any filing by defendant would not constitute notice so as to defeat plaintiff's status as a holder in due course. Furthermore, mere notice on the part of plaintiff of the existence of a separate agreement (the pledge) does not prevent him from taking in due course. It is only if he had notice of Roberts' default under the separate agreement, which gave rise to defendant's claim against the instrument, that plaintiff is on notice to the same extent as in the case of any other information as to the existence of a claim or defense, Section 70A-3-30- Plaintiff and Appellant, v. 70A-1-201(1- Richard A. Roberts and Roberts Merchandise Mart, a corporation, Defendants and Respondents. Third-Part- y 70A-1-201(2- ELLETT, Justice: The defendant, hereafter called the bank, appeals from a summary judgment in favor of Howick. Howick1 s corporate client had a certificate of deposit in the amount pf $5, 000 with the bank which it had pledged for a loan. The corporate client obtained temporary possession of the certificate by telling the bank its auditor in order to make up a prospectus for stock sale purposes. Instead bf returning the certificate to the bank as promised, the corporate client assigned it to Howick in payment of attorney's fees which it owed to him. The bank refused to honor the certificate when Howick presented it for payment, and this action was commenced to collect the amount due, together with damages fbr failure to pay. it needed the certificate to Bhow The return of pledged property by the pledgee to the pledgor for a temporary, limited, or special purpose does not divest the pledgee of his lien. The bank claims that there was a material issue of fact existing which would prevent the granting of a summary judgment, to wit: That Howick knew of the existence of the pledge at the time the certificate was given to him by his client. Therefore, if such an issue can be found to exist from the record, a trial would be needed and the matter could not be determined by summary judgment. Howick filed an affidavit wherein he stated that at the time the certificate was given to him, he had no knowledge of the bank's claim thereto. The .70A-3-304(4)(- b), U.C.A. 1953. 1. Also see Official Comment, 9, U. C.C. Finally, I do not believe the principle cited in the main opinion is controlling in the instant fact situation, that is, that the delivery of pledged property by the pledgee for a temporary, limited, or special purpose does not divest the pledgee of his lien. In the Restatement, Security, Section 16, Comment a, p. 63, Possession may be delivered to a pledgor, without terminating the pledge, only for a temporary and limited purpose relating to the maintenance of the value of the pledgee's interest and having to do with the protection, improvement or sale of the chattel, or where the chattel is an instrument or document, its handling or collection. Even in such a case, however, the bona fide purchaser from the pledgor, who has relied on the latter's possession will prevail against the pledgee, (see Section 11, Subsection 2, and : Comment c). . . . Suits District Court 2. That Richard A. Roberts (the incorporator and personal client of Howick) advised the affiant that Howick was aware of the pledge to the bank at h'drYlrfi,hS'g'ot the assignment of the certificate. vs. 6 2. Interstate Collections vs. KEITH PACE Plft; $2, 945. 8 provides: Transport Clearings Intermountaln Inc., vs. INSTANT Plft; INCi, $752.25 NORMAN bal due Sec. 27f. Plft; Plft; vs. SANDAROS Co. AND PATRICK MILK Plft 206502 Shauna Lee Has lam E. LINDSEY, $50,000,'00 bal due CLARNECS vs. Plft; Plft; $4,508.00 206504 Lor In S. F. Henri Henriod, Justice plft; 3. vs. CALLISTER, Chief Justice: The certificate of deposit, in the instant action, comports with the reU. C. A. 1953, and, therefore, may be deemed quirements of a negotiable instrument. The defendant, bank, claims a security interest therein. U. C. A. 1953, a security interest in an instrument Under Section can be perfected only by the secured party's taking possession, with certain U. C. A. 9, limited exceptions not applicable herein. Under Section of a a holder in due course 1953, negotiable instrument takes priority over an earlier security interest even though perfected. A filing under Chapter 9 Secured Transactions, does not constitute notice of the security interest to a U. C. A. holder in due course; this principle is reiterated in Section 70A-3-104(- 70A-9-304(- l), l), 70A-9-30- 70A-304(- 1953. A Co., Inc. Me GARTH $1,250.00 bal due 206507 George ann vs. Plft; ft 5), $185.49, CHY Crete, Inc. vs. ME CHAM baldue Plft; 206510 Joseph M. Newey vs. JOIN RICHARD ASTON AND RICHARD H. ASHTON Plft; $50,000.00 bal due Interstate Collections LAWRENCE $824.13 L. Plft; CLEMENTS 62972 Proctor vs. 7585 0. Ellen Lovejoy vs. VAUGHN LOVEJOY Carolee Seyboldt vs. Schnelter and Jo $12,789.18 bal due 206509 Dura Jack A. Mrs $185592 Divorces Granted 206508 CF& I Fabricators of Utah vs. SKYLINE CONSTRUCTION Plft; Plft; 72 206044 Business Collection Age. vs. ARTHUR C. CHAPMAN Plf; $85391, 52772 7586 schnelter, vs. MIDVALE Plft; selling feravel for CO OLYMPIC BOATS; 28 RICKIE K. SEYBOLDT private use. U. C. A. 1953. l), 206506 Darlene Templer . 5 MILDRED ARLENE PROCTOR INC., $1,114.35 bal due BOYD WILLIAM (Concurring in the result) I concur in the result of the majority opinion that this matter must be remanded to the trial court; however, I believe the relevant issue to be tried is whether plaintiff was a holder in due course, as provided in Section 70A-3-302(- Garment or S. WAHLEN, AND LAVERNE Plft;$l,502,51 7584 Danny L. INC., KAUilDESCOPE, plft; Fox v. Allstate Insurance Company, 22 Utah 2d 383, 453 P.2d 701 (1969). Sel-M- States Credit ARVID Divorces Filed $2,675.52 bal due 206505 J. Allan Crockett, Justice WAHLEN note Miller, vs. GENES TIRE CENTER, Exchange MARTINDALE WAHLEN 62872 204256 206503 Draper and Trust Company, VS. AUDIO TECH, INC. R. L. Tuckett, Justice S. vs. BAnk WE CONCUR: Ins. D. 205265 Middy Marine Products Plft; $6,876.52, baldue The judgment is reversed and the case remanded to the trial court for such further proceedings in harmony with this opinion as are proper. Costs are awarded to appellant. Plft; 62872 DENNIS vs. 206501 Young Electrle Sign Co. VS. WILLIAM VINCENT YERKAY by the jury. loan Co. & CHRISTIANSEN 204018 Westers $2,902.15 baldue This is particularly true where the opposing affidavit of the plaintiff is and the testimony therein, if given at trial, could be disbelieved R. GAYLENN DBA $1,550.00 Center Thrift MAC Asso., vs. Electric Sign vs. $466.00 Plft; 62872 $3,500.00 HOGGAN Plft; 62772 $20.00, Electric Sign CHARLES W00DMANSEE KENT Plft; 200433 Farmers Co., vs. 206500 Young 56(e) is subject to a motion to strike; and formal defects are waived in the absence, of such a motion or other objection. LORDS 206181 Midget Martvs. BILL vs. $2,769.62 ESTATE; bal due E. KALIKAKIS vs. 206499 Young Moore Fed. Pro. at page 2817. Plft; $75. 00 62872 J3200 206498 Newspaper Employees Credit Union vs. KENNETH D. An affidavit that does not measure up to the standards of ng C 206496 bal due 62872 vs. PQARCH 197053 Gary F. Sprouse JACK checks HOT WATER, MARJORIE PORACH mo. per 206495 states the law as follows: self-servi- ALTUS bal due .07 The affidavits filed by the bank may or may not measure up to the requirements of the rule. However, no motion to strike them was made, and under the circumstances of this case these affidavits are sufficient to require proof as to knowledge of the assignment or lack thereof. Professor Moore6 72C.J.S., Pledges, 167282 G. GARTH CAMPBELL AND LILLIAN CAMPBELL Plft; $1,061 Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. . . . 1. Judgments District Court Interstate Collections 206494 pledge. , it is stated: That the business records reflected that Howick had notice of the Rule 56(e), U.R. C.P. 5), 1 bank caused affidavits to be filed wherein it was stated: 1. 9), 312 MarleneDlabus vs. JOHN CIABUS 7480 vs. 2522 CRAIG Julie Diana Morgan GERLAD ERAL MORGAN Jolene Col lard vs. LARRY C0LLARD 6581 Edward George Allen v. CATHLEEN SMITH ALLEN 2965 Julie CECIL R. A. McCray vs. MC CRAY 6560 INEZ GREATHOUSE CAMPBELL boy DEAN CAMPBELL |