Freeman v. Hare & Chase, Inc.

The Chancellor.

The defendant’s business was that of buying on a re-discount basis from dealers in automobiles and trucks paper obtained by them from purchasers of such vehicles. The defendant did a business of great volume and financed it largely on credit obtained from banks upon notes secured by the re-discounted paper as collateral. Its loans from banks in January, 1927, totaled about $26,000,000.00. In that month a crisis in the defendant’s affairs was precipitated by its unwise purchase of something over $4,000,000.00 of so-called taxi-cab notes which were discovered to be almost if not…