Sullivan v. Vera

WOODWARD, J.,

pro

tem.

This is an appeal by the intervener from a judgment in favor of plaintiff for the foreclosure of a chattel mortgage bearing date March 6, 1930, and given by defendant to plaintiff to secure the payment of a promissory note in the principal sum of $6,500 with interest at seven per cent. Appellant, a creditor, intervened in the action as against both litigants, alleging, among other things, that the chattel mortgage sought to be foreclosed had been executed by the defendant Vera, “with

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out consideration and with intent to hinder, delay and defraud creditors”, including appellant, and that plaintiff had accepted the mortgage with full knowledge of the facts. It is averred also, on information and belief, that the instrument was not acknowledged before the notary public purporting to have taken the same. The defendant made no appearance as against plaintiff, but filed an answer to the complaint in intervention, denying generally the allegations thereof.

The factual background of the controversy may be epitomized thus: During the month of July, 1925, the defendant purchased a ranch from plaintiff, paying a small amount in cash on the purchase price and executing his note, secured by a deed of trust on the property, for the balance. He thereupon began to operate a dairy on the premises, but soon met with financial difficulties and defaulted in payments due plaintiff. Plaintiff, however, evidently believing the defendant would eventually make a success of his business, began to advance him various sums of money to pay for labor and to purchase equipment, including a tractor, pump, electric motor, piping for irrigation, lumber and other materials. These pecuniary advances, aggregating more than $6,500, began in November, 1925, and ended in January, 1930, at which time the plaintiff, dissatisfied with the arrangement, demanded security for his loans. It was in these circumstances that defendant, two months later, executed the mortgage in question.

It seems that for several years prior to the date of the mortgage, appellant had worked continuously as a milker for the defendant and had failed to draw or demand the greater part of his wages. On April 17, 1930, less than a month after the execution of the mortgage, appellant filed a suit in the superior court for the collection of his back wages and, three months later, obtained a judgment against Vera in the sum of $810. It is an admitted fact, also, that on December 15, 1929, appellant, in due course of his employment as a milker for defendant, sustained an injury consisting of a fracture of his right arm. Thereafter he filed a claim with the Industrial Accident Commission, which, on May 7, 1930, made an award of $9.49 a week for temporary disability, payments to begin as of December 23, 1929. The commission found that the employer was uninsured.