Unico v. Owen

50 N.J. 101 (1967)

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Nature of the Case

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Facts

Owen (D) signed a retail installment contract with Universal for the purchase of 140 albums for $698 and a free Motorola stereo record player plus interest. Universal sold the note to Unico (P) with full recourse. The note demanded payment of $22.77 per month for 36 months, but Universal's performance was to delivery 24 albums per year over a 5.33-year period. D would be finished paying for the goods still in Universal's possession and the contract allowed for no recourse to D in the event Universal assigned the contract to another. D received the stereo record player and 12 albums called for by the contract. D continued to make payments for twelve months and never received another album. D tried to communicate with Universal and finally ceased making payments when the albums were not delivered. P then contacted D and informed them that it held the note and that payment must be made. D had paid $303.24 on the contract for 12 albums and the stereo record player. Universal had become insolvent. P sued for the balance due on the note. The issue was whether P was a holder in due course. Judgment was entered for D. P appealed.