Jones v. Approved Bancredit Corp.

256 A.2d 739 (1969)

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Nature of the Case

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Facts

D owned a lot and wished to have a house built on it. She responded to a newspaper advertisement by Albee Dell Homes, a sales agency for pre-cut homes. D signed a purchase order contract and credit application and made a deposit. Several weeks later, Dell presented a series of documents evidencing an obligation of $3,250 to be paid by D in monthly installments over a period of years for the house. The documents included a mortgage; a judgment bond and warrant; a promissory note; a construction contract; a request for insurance; an affidavit that the masonry work and foundation were completed and paid for (when in fact none of the work had been commenced); and an affidavit that no materials were delivered, or work started as of the date of the mortgage. D stated that she would like to consult her attorney before signing because she did not understand the documents. D stated that she would like to consult her attorney before signing because she did not understand the documents. Dell insisted upon her signing the papers and assured D that Dell would take care of the entire situation to her satisfaction. D rolled over and signed all the documents. The paper was endorsed and assigned by Dell to P, which paid Dell $2,250. for the $3,250. note. An employee of the builder drove a bulldozer into the side of the partially completed house and knocked it off its foundations. The builder refused to go forward with the work. Dell claimed that the damages were from a 'cave-in' and was 'a work of God'. The structure was left as is with the water-filled basement and the County authorities demanded the problems be fixed. Dell and P did not respond and D remove the remnants of the building and filled the basement. Dell closed its office and terminated its business except for the servicing of certain contracts through a representative in Delaware. P sued D seeking foreclosure and collection of an unpaid balance of $2,560.20, with interest. D asserted her defenses and P claimed holder in due course status. P moved for summary judgment. It was denied. Dell and P were both wholly owned subsidiaries of Albee Homes, Inc. All (99%) of P's business came from Dell and the other wholly owned sales agency subsidiaries of Homes. Homes and P had the same officers and directors; Homes named the directors and officers of Dell. Checks of P were countersigned by Homes. The manager of P testified on deposition that P was a 'finance department' of Homes. The court entered judgment for P on the ground that it was a holder in due course. D appealed.