Unico v. Owen
Supreme Court of New Jersey
232 A.2d 405 (1967)
Owen (defendant) agreed to buy records from Universal on an installment promissory note that was immediately assigned, per standard practice, to Unico (plaintiff), a company created specifically to finance Universal's sales and which participated in setting the standards of Universal's sales agreements; after Universal stopped delivering records having received a year of payments, Unico still demanded Owen pay the note in full, and the trial court and appellate court both found Unico was not a holder in due course subject to Owen's defenses.
Whether a financer with a substantial voice in setting or approving a dealer's transaction standards, and who agrees to take all or a substantial quantity of the resulting negotiable paper, should be considered a participant in the original transaction and thus denied holder in due course status.