Hollywood State Bank v. Cook

MUSSELL, J.

This is an appeal by plaintiff from an adverse judgment in an action to foreclose two chattel mortgages given by Cal A. Cook covering certain machinery located in San Diego. These mortgages secured two notes given in February and May, 1946, and were duly recorded.

At the time each of these mortgages was executed, Cook also executed a “collateral security agreement” providing in part:

“In consideration of any financial accommodations given, or to be given, or continued to the undersigned by Hollywood State Bank (hereinafter called the Bank) and as collateral security for the payment of any indebtedness, obligation or liability of the undersigned to said bank now or hereafter

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existing . . . the undersigned does hereby assign, transfer to, and deposit with the said bank all property this day delivered by the undersigned to the bank, or which may now be held by the bank, or which may hereafter be delivered by the undersigned to the bank during the existence of this agreement . . . the power of sale and other powers hereinafter given shall apply to all collaterals of any kind, nature or description, including . . . negotiable instruments ... at any time during the existence of this agreement in possession or control of said bank. . . . belonging to, for the account of or subject to the order of the undersigned.”

Between October 16,1946, and April 2,1947, Cook borrowed additional moneys from the bank, signing five notes therefor, totaling about $47,000.

The United States government acquired various tax liens on the property of Cook amounting to $7,920.75, the first assessment being levied on November 6, 1946, and notice being recorded three days later. Subsequent to April 2, 1947, it acquired additional tax liens, totaling $13,552.66. County taxes also accrued amounting to $2,778.06 for 1947-1948 and $1,711.05 for 1948-1949. None of the county or government taxes have been paid.

At the time of his death, Cook was indebted to plaintiff in a large amount. By stipulation of the parties, the property covered by these mortgages was sold by the administrator for $18,158.75, from which the plaintiff was paid $5,549.60, being the full balance specifically covered by the mortgages. The remaining $12,609.15 is held by the administrator pending the outcome of this action. It is admitted that the estate is further indebted to the plaintiff in the amount of $41,071.93 on the five notes issued from and after October, 1946.