Security First Nat. Bank v. Haden

• Decision Date: 27 December 1962
• Citation: 2 A.L.R.3d 832,211 Cal.App.2d 459,27 Cal.Rptr. 282
• Court: California Court of Appeals Court of Appeals
• Parties: , 2 A.L.R.3d 832 SECURITY FIRST NATIONAL BANK, Plaintiff and Appellant, v. Robert H. HADEN, Defendant and Respondent. Civ. 171.

Page 282

27 Cal.Rptr. 282

211 Cal.App.2d 459, 2 A.L.R.3d 832

SECURITY FIRST NATIONAL BANK, Plaintiff and Appellant, v. Robert H. HADEN, Defendant and Respondent.

Civ. 171.

District Court of Appeal, Fifth District, California.

Dec. 27, 1962.

Miles, Sears & Franson, Fresno, for appellant.

Robert H. Haden, Merced, respondent, in pro. per.

CONLEY, Presiding Justice.

The plaintiff, Security First National Bank, a national banking corporation, appeals from a judgment of the superior court in favor of the defendant. The plaintiff filed an action for the recovery of a Model LU-2 Boxmaster, commonly called a box making or nailing machine of the alleged value of $2,200 to which it claimed title by reason of a sale under a chattel mortgage which it had held on the property to secure a note of the former owners, John E. Spomer and Katherine J. Spomer.

The trial court held that title to the machinery was in the defendant and respondent, who had acquired the nailing machine as a fee for future services in the bankruptcy court through a purported transfer of title to him by the Spomers. The court also held that Mr. Haden was a bona fide purchaser for value and that the description of the machine in the chattel mortgage was not sufficient under the law.

The respondent in this case did not file a brief within 30 days after the filing of appellant's opening brief, as required by rule 16 of the California Rules of Court. Accordingly, pursuant to rule 17(b), the clerk notified the parties by mail that the case would be submitted for decision on the record and appellant's opening brief unless respondent's brief should be filed within 30 days after the date of the mailing of the notification or unless good cause were shown for relief. The respondent did not file his brief within the additional period; he offered no excuse for his default and did not ask for additional time; the appellant did not request oral argument, and the cause was accordingly ordered submitted.

The facts of the case are briefly as follows: in the year 1959 the plaintiff, through its Visalia branch, advanced the sum of approximately $28,000 to John Spomer and his wife, for use as operating capital in their fruit packing business situated on North Alta Avenue at Dinuba, Tulare County, California. Originally this was an unsecured loan which was to be repaid by December 15, 1959. The loan was not paid on the due date, and on January 7, 1960, the obligation was extended to January 15, 1960, to be paid out of crop monies which it was hoped would be received by the Spomers by that date. Again, they failed to meet their obligation when due, and the plaintiff thereupon requested security for the outstanding loan. On March 15, 1960, John Spomer wrote a letter to the bank offering to pledge all of his packing house property, buildings and equipment as security for the monies owed. On March 29, 1960, the Spomers signed a promissory note in the sum of $28,000 in favor of plaintiff and executed, acknowledged and delivered to plaintiff a chattel mortgage covering all of their office and packing shed equipment. The note was predated to January 15, 1960, in order to include interest on the outstanding obligation from that day, and according to its terms it was to be paid on or before July 15, 1960. The chattel mortgage was duly recorded by plaintiff in Tulare County on March 30, 1960.

The mortgage contained this all-inclusive or 'catch-all' clause:

'All of the furniture, furnishings, fixtures, machinery, equipment, livestock and personal property of every kind and nature, now or hereafter owned by the mortgagor or in which mortgagor may have or may hereafter acquire any interest and now or hereafter located at, upon or about or located in or attached to the buildings on real property known as 345 North Alta Avenue, in the City of Dinuba, County of Tulare, State of California.' The mortgage provided:

'Without in anywise limiting the generality of the foregoing description of said personal property it shall specifically include the following: [listing specifically described office and packing shed equipment.]'

At the trial Mr. Spomer testified that the address set forth in the chattel mortgage, '345 North Alta Avenue in the City of Dinuba, County of Tulare, State of California,' was defective as to the street number, but that his packing house was in fact located on North Alta Avenue in the unincorporated area immediately outside of the City of Dinuba, in Tulare County. He admitted that at the time of the execution of the mortgage he intended to cover all of the equipment located at his office and packing shed at Dinuba, California, and that he operated only the one place of business.

At the time of the execution of the mortgage there was included in the equipment located in the packing shed the nailing machine which is the subject of the present suit; it is a Model LU-2 boxmaster with 14 chucks and head feed; it had been regularly used in connection with the operations there. The machine had been purchased for cash by Spomer several years before, and it was unencumbered by any other mortgage or lien. It was used by the Spomers as part of their packing house operations during the 1959 crop year and remained on the premises until removed by the defendant under the circumstances hereinafter described.

On July 15, 1960, the Spomers were in default with respect to the note and remained so on January 17, 1961, when a written notice of default, together with a demand for payment and notice of sale under pledge was mailed by plaintiff to the Spomers. The date, time and place of the sale were fixed for January 27, 1961, at 10 a. m. at the Spomers' packing shed premises, and a notice of the sale was posted on January 19, 1961, in three places, including the packing house premises, as required by law. The notice of pledge sale referred to the chattel mortgage and to the property covered thereby.

After the notice of sale was given and posted and prior to January 27, 1961, the defendant removed the nailing machine with the consent of the Spomers, but without the acquiescence of the plaintiff, and placed it in storage on his ranch in Merced County. The defendant honestly stated the facts leading up to the removal and concerning his knowledge of all details of the security transaction; he testified that before removing the nailing machinery he had read the posted notice of sale, and was thoroughly familiar with the provisions of the chattel mortgage and of the status of the chattels located on the Spomer premises. He testified that Spomer transferred the machine to him as a fee for legal services to be rendered in contemplated bankruptcy proceedings. He also talked with officers of the bank before removing the nailing machine and told them that he intended to take the chattel based on his theory that it was not covered by the mortgage.

On January 27, 1961, the sale was conducted at the premises in accordance with the notice. At that time an announcement was made that the various chattels present in the packing house and the nailing machine located on the defendant's ranch in...