Schneider v. Turner

THE COURT.

This is an action to foreclose a deed of trust and a chattel mortgage executed by defendants II. B. Turner and Alice M. Turner, his mother, to secure a promissory note in the principal sum of $1250, payable to plaintiff. The court below found that in addition to the principal sum of $1250, there was due on said note interest from date of execution in the sum of $275.74. It further found that said deed of trust and said chattel mortgage also secured an unpaid balance of account in the amount of $232.58 due from defendant II. B. Turner to plaintiff, and attorney’s fees in the amount of $150. Defendants appeal from said judgment. They contend that said balance of account, or a portion thereof, is not secured by the deed of trust.

[773]

The chattel mortgage by its terms was security for all existing and future indebtedness owing from the mortgagors to the mortgagee, as well as for the promissory note. The deed of trust, however, was security for the promissory note and for “all amounts of principal

hereafter borrowed

by said grantors from said beneficiary to the limit aforesaid [$6,000] and interest thereon.” (Italics ours.)

Defendant H. B. Turner is a grower of prunes. Plaintiff F. A. Schneider conducts a business for the marketing of dried fruit under the name of Warren Dried Fruit Company. Plaintiff and Turner commenced to do business in 1930, when Turner contracted to dispose of his 1930 crop through plaintiff. Due to the prevailing economic depression a large part of the 1930 crop was not readily marketable. In this situation plaintiff made cash advances or loans to Turner against his prunes delivered to plaintiff, in advance of the sale of the prunes by plaintiff. In most instances a promissory note was given for cash advances made. On April 13, 1932, when the note for $1250 was executed, Turner was indebted to plaintiff in a large sum on account of cash advances and charges made against him on account of the undisposed portion of his crops. The note for $1250 and deed of trust and chattel mortgage were executed for a further cash advance of $1250 then made by plaintiff to Turner. The deed of trust covers an acre of land in Yuba County, while the chattel mortgage applies to fruit dehydrating equipment on said land. The mother joined in the deed of trust and mortgage by reason of her interest in the property subject thereto.