Talcott v. Hurlbert

COOPER, C.

This action was brought to foreclose a mortgage on certain personal property described in the complaint. Judgment was entered against plaintiff and defendants Hurlbert, Woolfolk, and Rey, and in favor of intervener, Hansbrow. Defendants have not appealed. Plaintiff prosecutes this appeal from the judgment in favor of intervener, and the contest is here between plaintiff and respondent Hansbrow.

The findings show the following to be the material facts: On the eighteenth day of July, 1893, E. C. Hurlbert and C. A. Woolfolk made and delivered their promissory note to one Hall for five hundred dollars, due October 18, 1893, with interest from date until paid, at the rate of one per cent per month, and, to secure the same, executed and delivered a chattel mortgage upon the personal property described in the complaint. The mortgage was properly verified as required by law, but was not acknowledged by the mortgagors. It was on the following day recorded in the proper book for recording chattel mortgages, in the recorder’s office of Santa Clara County, being the county in which the property was situated.

The note and mortgage were, after maturity, assigned to one Coke, who afterwards assigned the same to plaintiff, who has ever since been the owner thereof.

On September 6, 1893, the said Hurlbert and Woolfolk, with other parties, organized a corporation, and incorporated as the “Hurlbert Printing Company.” At the time of forming the said corporation Hurlbert and Woolfolk were indebted to various creditors, including Hall, the mortgagee, the said indebtedness amounting to $3,874.74. The printing material and plant of Hurlbert and Woolfolk being the property mortgaged to Hall, were transferred to said corporation, and it was agreed by and between the corporation and the

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creditors of Hurlbert and Woolfolk, that the corporation should assume and pay all the creditors, and that the creditors should release the said Hurlbert and Woolfolk from all the indebtedness so due said creditors. The corporation was by such agreement substituted as the debtor of all of said creditors, and the said Hurlbert and Woolfolk were released from all claims on account of the said indebtedness. To this arrangement Hall, who then owned the note and mortgage, assented, but he did not release the lien of the mortgage nor agree to release the same, nor has the note secured thereby been paid.