First Nat. Bank of Fair Oaks v. Turnbull

ADAMS, P. J.

Plaintiff filed this action on May 28, 1947, seeking a judgment for $18,941.04, for interest, attorney’s fees and costs, and for the foreclosure of a mortgage securing

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the payment of the moneys claimed. The action was based upon a contract executed by Thomas H. Turnbull, M. M. Haslett, B. D. Christensen and L. L. Anderson, alleged to be a copartnership carrying on business as Fair Oaks Manufacturing Company, and upon a promissory note executed by them. The contract, attached to the complaint as an exhibit, provided that the bank should make advances to the borrowers to finance their business, from time to time, and that the latter should execute a mortgage upon its personal property, and take other designated steps to secure such advances, the agreement to be a continuing one to apply to future as well as existing transactions. A note for $15,000 was executed by defendants, the latter agreeing that the mortgage should cover equipment added or substituted, and that they would keep same in repair and fully insured. The complaint then alleged failure of defendants to comply with their agreement in several respects, and that defendants were indebted to plaintiff in the sum claimed. It prayed that the mortgage be foreclosed, and for general relief.

All defendants except Turnbull defaulted in said action, the record showing that appellant Anderson was served with summons on June 14, 1947, and that upon failure to appear, his default was entered July 17, 1947. Turnbull filed an answer admitting the allegations of the complaint, but setting forth that he had been adjudicated a bankrupt on June 3, 1947, that the obligation upon which plaintiff sued was included in his schedule of debts, and that by virtue of said adjudication he was released from the obligation set forth in plaintiff’s complaint.

On October 8, 1948, after a hearing at which plaintiff produced evidence, the court made and entered a judgment which recited that all of the allegations of plaintiff’s complaint were found to be true, that subsequent to the filing of the complaint the personal property covered by the mortgage set forth in the complaint had been taken into the possession of the trustee in bankruptcy in Turnbull’s bankruptcy proceeding and sold, and that the proceeds of such sale had been paid to plaintiff in partial satisfaction of its debt proved in that proceeding; and that, after the application of such payment, there remained due and unpaid to plaintiff the sum of $1,600.79 plus attorney’s fees and interest, for the amount of which judgment was entered against defendants Haslett, Christensen and Anderson. On January 5,