The Washington times., 1920-07-10

upon 10 give notes TO cover deferred
the truth as to the charges against
the dealer In question.
The law 10 very clear to the efect
that the holder OF A note who bought
the same In the ordinary course or
business Is entitled to collect the
same, regardless OF any claims which
the maker OF the note may be able
TO set up against the original payee-
the dealer. IL the dealer has given
a warranty or other special contract,
or IL he has already collected part or
all of the amount due on the note.
these facts can not be relied upon ss
against the bona fde holder OF the
note. ..
Protection against this risk Is af-
forded only when the following pre-
cautions are taken: % all agree
ments upon which the purchaser re-
lies as the basis or his purchase
should either be embodied in the
notes verbatim, or else should be COW
cred by a reference in the notes TO
the contract of purchase as part
OF the transaction expressed by the
notes; (2) no payment should be made
on such notes unless the purchaser
sees that they are written on the
back OF the notes as credits, and no
final settlement should be made un-
paid or otherwise cancelled; t3) the
amount OF each note should be per
forated or otherwise impressed on
the instrument by a check protector
or other similar device.
OF course, where the dealer Is
man OF unquestionable responsibility
these precautions may appear super
nuous, but lawyers learn only too well
that IL Is the man who has the com
plete confidence OF another that most
frequently is caught IN the meshes of
the law, with consequent loss to the
people who dealth with him.
This Is not an indictment of dealers
in general The observance OF precau-
tions which the courts have declared
to be essential to safety will be en-
dorsed by all reliable business men.
They will be the first to concedc the
propriety OF protecting every pur-
chaser against INSCRIPTIONS dealing,
regardless OF the inherent necessity
of this protection in the given case.
A recent Michigan case shows the
elasticity. of the law in meeting spe-
cial situations. A manufacturer OF
well-known car which was being sold
a
to handle its sales on it's own account.
II proposed to it's dealer to buy out
his stock and fixtures and also his
lease. The lease was extremely valu-
able, owing to the fact that the prem
ises had been successfully used for
many years in the sale of the particu-
lar car. A price was agreed upon
admittedly a ridiculously low price
and subsequently the dealer repented
of his deal and his generosity and re-
fused to comply with his contract. He
preferred to be sued and to pay the
necessary damages. But the law
stepped in and went much further.
Through the remedy known to law
yers as specific performance the
court ordered the dealer to comply in
terms with the specific provisions OF
his agreement. The evidence showed
that under the special circumstances
Of such a case it would be impossible
to estimate on any mathematical ba-
sis the amount of loss that the man
ufacturer would sustain as result OF
the breach of contract, and the court
decided that upon this ground the
dealer should be compelled to make
good by tho only other avenue avail
abie-specific performance Of his
contract.
: This case ILLUSTRATES inc legdi ruie
that q man cannot escape perform
ance Of has contract simply because 1t
works out to his great loss or because
he has made a gross mistake or has
acted very improvidently. or course,
il he were imposed upon through
fraud, this would alter the situation.
A recent Ohio case disposes OF a
problem that gives great deal of
trouble in the trial Of automobile ac-
cident cases involving defective
streets or other external conditions.
In this case an accident had resulted