Frank H. Buck Co. v. Buck

HENSHAW, J.

Appellant, California Fruit Exchange, a corporation, is the mortgagee of a recorded crop mortgage executed to it by respondent F. M. Buck. It claims priority of right and lien by virtue of this crop mortgage and by virtue of an unrecorded crop contract also executed to it by F. M. Buck, over a subsequent chattel mortgage executed by F. M. Buck to respondent Frank H. Buck Company, a corporation. The action was commenced by the Frank H. Buck Company to foreclose its chattel mortgage for the sum of fifteen thousand dollars and for a decree establishing its priority of right over the California Fruit Exchange contracts. Frank M. Buck suffered default, judgment passed for plaintiff as prayed for, and from that judgment and from the order denying its motion for a new trial the California Fruit Exchange appeals.

The facts disclosed are the following: In December, 1905, F. M. Buck executed to the appellant a mortgage upon the crops of fruit “now standing and growing and that may hereafter be grown upon my farm and orchard comprising 140 acres in Solano County.” The mortgage was given to secure an indebtedness of twenty-five hundred dollars. It contained an added provision as follows: “Provided, nevertheless, and these presents are upon the express condition that if the said party of the first part, his heirs, executors, administrators or assigns, shall well and truly pay, or cause to be paid unto the said party of the second part, its successors or

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assigns, all sums of money that are now due, or that may hereafter become due, from the party of the first part to the party of the second part, then these presents shall be void. It is the purpose of this mortgage to secure future advances to, as well as the present indebtedness of, the party of the first part.” It likewise contained a covenant upon the part of the mortgagor to deliver the crops grown on the land to the mortgagee to be marketed. This mortgage was duly recorded. Under it appellant marketed the crops and credited them to the account of Buck, and also made numerous advances of

money

to Buck,

many

of which were evidenced by his promissory notes. In December, 1906, Buck requested appellant to assist him in obtaining a loan of three thousand dollars from the Fort Sutter National Bank of Sacramento, appellant did so assist and Buck secured the money upon the guaranty by the appellant of the loan. This note was a demand note. No part of the interest was paid by Buck. Appellant paid it all, and finally paid the principal on September 27, 1907. At the trial an expert employed to examine into and report upon the condition of Buck’s account with appellant as disclosed by the appellant’s books, reported in effect that the books showed a continuous balance against Buck, excepting that on September 15, 1907, there appeared upon the books a sum to the credit of Buck greater than the debits in the amount of $442.32, and on September 21, 1907, appeared an amount so in excess of the debits in the sum of $1,238.44. As between the parties, however, no balance had been struck by the appellant, no statement had been made to Buck, and there were promissory notes from Buck to appellant which were not yet due upon either of these dates. Buck continued as before to receive advances from and to request payments of money to be made by appellant, and the condition of the account from one of apparent credit to one of actual debit was speedily changed. Thus on September 27th there was the payment of three thousand dollars on the promissory note guaranteed by appellant. On October 4th following five hundred and fifty dollars was paid out by appellant on Buck’s account, on October 8th in like manner seven hundred and fifty dollars, on October 25th, seventy dollars, and on October 26th, one thousand and seventy-eight dollars. Thereafter the transactions between Buck and appellant con-