Sierra Paper Co. v. Greppin

SLOANE, J.

The facts in this case, so far as material to the issues on this appeal, are that one H. A. Miller, engaged in the printing business, being indebted to a number of creditors, including the plaintiff, Sierra Paper Company, a corporation, in varying amounts aggregating several thousand dollars, executed a chattel mortgage upon his printing plant, securing his promissory note for the entire indebtedness, to the defendant E. H. Greppin as trustee for the benefit of the creditors. The note, dated July 29, 1915, was made payable, $176.77 on the 15th of September, 1915, and the balance in fifty-one installments of $150 each, the first to be paid on the 1st of September, 1915, and a like installment on the fifteenth of each and every month thereafter, with interest at eight per cent on each of the deferred payments. The note provided that the whole amount of principal and interest should become immediately due and payable upon the happening of any one of several contingencies, among which was the failure to pay any installment of principal or interest when due, “notwithstanding any other stipulation herein contained.” The mortgage provided that on the happening of any of the contingencies named in the note, the whole sum should become due and payable at the option of the legal holder of the note, at once and without notice. The mortgage further empowered the mortgagee, at his option, upon any default on the part of the mortgagor, to foreclose the mortgage as provided by law. It was also made optional with the mortgagee, in case of default in any of the conditions, to take possession of the property without notice to the mortgagor, and to sell the same at public auction or private sale, with or without notice.

There was nothing in the terms of either the note or mortgage indicating the nature or conditions of the trust,

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or for whose benefit the instruments were executed or the trust created.

Miller defaulted in his payments from the outset, having made only one payment of $75 in over a year, up to the time this suit was commenced. Plaintiff made demand upon the trustee to enforce payment under the note and mortgage, and on his refusal to do so began this suit for a foreclosure of the mortgage in November, 1916, in its own name as one of the beneficiaries of the trust, making Miller the mortgagor, Greppin the mortgagee and trustee, and the other creditors and beneficiaries parties defendant. The judgment was for defendants and plaintiff appeals’.