Erich v. Dunkly

ADAMS, P. J.

This is an appeal from a decree of foreclosure and sale which involved two chattel mortgages, the

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one dated October 13, 1941, given by defendants to secure a promissory note for $1,800 assigned to plaintiffs by the mortgagees, and the other dated April 6, 1944, securing a promissory note for $4,175.03, executed by defendants to plaintiffs.

Defendants, at the time of the execution of said notes and mortgages, were engaged in the business of raising trout for market, their place of business, known as Lava Springs Trout Farm, being located upon certain land in Plumas County upon which they held a lease. The earlier mortgage covered some 260,000 trout of various sizes, “together with any and all increases and additions thereto” during the life of the mortgage. It also covered all buildings, improvements, equipment and tools incidental and appurtenant to the operation of the trout farm, and located thereon, together with all of the mortgagors’ right, title and interest in the lease held by them on the property constituting the farm.

The second mortgage covered the leasehold, and a long list of buildings, equipment of various kinds, certain motor vehicles, household equipment, furniture, etc.; also 286,000 trout of various sizes, the instrument reciting that it was intended to include "all trout at hatchery including all future increase.”

Prior to the execution of the latter mortgage an agreement was entered into between plaintiffs and defendants under which the plaintiffs agreed to assume certain specified debts owed by defendants and to make certain advances for purposes connected with defendants’ operations on the trout farm; and defendants undertook certain specified obligations and to keep the hatchery operating at a capacity of not less than 200,000 trout at all times. The agreement, as well as defendants’ promissory note, was agreed to be secured by the aforesaid chattel mortgage. Defendants further agreed to assign their lease to plaintiffs as further security, and provided that upon their default plaintiffs were to be “entitled to immediate possession of the said real property and second parties [defendants] have no further interest thereunder.”

Defendants having defaulted in the performance of their obligations, plaintiffs brought this action, alleging in the first count that there was due them under the first mortgage on account of the note and advances made by them together with interest, the sum of $2,638.75. They prayed judgment for that amount, together with a reasonable attorney’s fee, and that defendants be foreclosed of all interest, lien, and