Meyer v. Parobek

[511]

MUSSELL, J.

The facts are set forth in a stipulation. Plaintiffs were the owners of premises, known as 509, 511 and 515 Vista Way in Oceanside, leased to Dye-Trans Color Photo, Inc., a corporation. Defendants and appellants Balkema, Ostrow and Russell loaned to the corporation the sum of $25,000 and in return received from it a promissory note, secured by a chattel mortgage on the fixtures and equipment of the corporation. On or about August 1, 1950, the corporation ceased operations due to financial difficulties and the said fixtures and equipment were left on the premises. Shortly thereafter defendant Ostrow, who was also a director of the corporation, spoke to plaintiff Elmere Meyer in regard to the disposition of the fixtures and equipment. It was stipulated herein that Ostrow would testify that he told Meyer that the corporate assets should remain intact at 515 Vista Way to assist in the sale thereof; that the corporate assets should be moved from 509 and 511 to 515 Vista Way and that he held $90 which he would pay to remove the property. It was also stipulated that Meyer would testify that Ostrow told him that it was his desire that the corporate assets remain intact to facilitate a sale thereof, and that he held $90 which he would pay for the cost of said moving should Meyer have the opportunity to rent the premises at 509 and 511 to some other tenant. Plaintiffs did re-rent the premises at 511 on or about June 1, 1951, and at that time moved the equipment therein to 509. Defendants commenced an action to foreclose their chattel mortgage on or about November 10, 1950, served a notice of forfeiture of the lease on the corporation and secured a default judgment of foreclosure on or about November 24, 1950.

The sheriff took possession of the fixtures and equipment but did not proceed immediately with the sale thereof as the State of California questioned the validity of the chattel mortgage. Whereupon the defendants’ attorney instructed the sheriff to hold up the sale and informed him that negotiations would be attempted with a view to making a private sale of the property. Attempts to sell the property thereafter were unsuccessful and on or about April 23, 1951, plaintiffs gave notice to the corporation and the defendants that they would remove all the personal property and would have the same stored in a warehouse at the expense of the said Dye-Trans Color Photo, Inc. and the defendants, such removal to be accomplished on May 5, 1951. Plaintiffs, however, did not immediately move the fixtures and equipment because of the re