Gardner v. Sullivan & Crowe Equipment Co.

Opinion

BRAY, J.

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Plaintiff appeals from judgment in favor of defendant after trial by the court.

Question Presented

Civil Code section 3440 in its applicability to the transfer to plaintiff of the community assets is not repealed by the Commercial Code.

Record

On April 30, 1966, in a divorce action filed by plaintiff, and then pending, she and Calvin Gardner, her husband, entered into a marital property settlement agreement. She received a promissory note for $45,000 signed by him and secured by a lien on all the property awarded to husband. Prior to the agreement, Calvin purchased from defendant a log loader on a conditional sales contract. Thereafter, on May 2, 1966, Calvin purchased from defendant a water truck, also on a conditional sales contract.

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On June 30, 1967, defendant repossessed both pieces of equipment for failure to pay the purchase price. On October 24, 1967, both were sold at public sale. The amount received for the log loader was in excess of the amount necessary to pay off the contract balance and expenses of sale. The amount received for the water truck was less than its contract balance. Defendant applied the excess from the log loader sale to the water truck contract deficiency and to an open book account incurred by Calvin on September 14, 1966, leaving a net loss.

The log loader was purchased over two years prior to the settlement agreement. The water truck was purchased two days after the marital property agreement was entered into, and the book account was incurred some four and one-half months subsequent to the agreement. Defendant knew nothing of the agreement nor of the pendency of the divorce at the

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time of any transaction with Calvin. There never was a change of possession of the loader or the truck from Calvin to plaintiff.

On October 5, 1966, plaintiff filed with the Secretary of State a financing statement relative to her lien against Calvin’s equipment, and on October 19, 1967, plaintiff served upon defendant “Notice of Subordinate Security Interest and Demand,” claiming any proceeds from the sale of the loader in excess of the amount necessary to pay the amount due defendant on the loader. At the time of the trial the amount due plaintiff on the note executed by Calvin was $25,011.