Schwartzler v. Lemas

THE COURT. This is an appeal by the intervener Vierra from a judgment in favor of the plaintiff foreclosing a chattel mortgage on dairy cattle and equipment. The trial court found that the intervener had agreed to purchase a one-half interest in the property covered by the mortgage and had become a partner of the owners in the conduct of the dairy business, but that the intervener’s interest was so acquired after the execution of the chattel mortgage and before a renewal thereof, and was subject and subordinate to the plaintiff’s right of foreclosure. Judgment was accordingly entered against the defendants Lemas decreeing- a foreclosure with a deficiency, if any, against said defendants. No personal judgment was rendered against the intervener, the court merely adjudging that he acquired his interest subject to the existing debt.

This is a second appeal in the same action. The former judgment determined that the intervener’s interest was subject to the existing debt and was reversed for the principal reason that it could not be ascertained from the record whether the personal property included in the original mortgage was the same as that included in the renewal mortgage, inferentially holding, and we think properly, that if it should appear on a retrial that the property included in both mortgages was the same, the intervener’s interest would be [56]subject to the existing debt. (Schwartzler v. Lemas, 11 Cal. App. (2d) 442 [53 Pac. (2d) 1039].) On the retrial it was stipulated that said property was and is the same.

It is insisted By the intervener that by his contract of purchase he became a partner in the dairy business and that the findings and judgment on the second trial to the effect that the partnership property is charged with the mortgage debt is not supported by the evidence, and that in any event he is not personally liable on the mortgage note.

This appeal was before the District Court of Appeal of the Third District, and a judgment of affirmance rendered. A hearing in this court was granted, mainly for the reason that it was indicated therein that a personal judgment had been rendered against the intervener-appellant, when such was not the case. The appellant was not a party to and had not assumed the obligation either directly or indirectly. The other points involved on the appeal are correctly determined in the following portions of the opinion of the District Court of Appeal which are hereby adopted, to wit:

“Prior to September, 1924, M. Lemas and wife owned the dairy cattle and equipment which are involved in this action. September 11, 1924, M. Lemas executed a chattel mortgage on their forty head of cattle and dairy equipment to secure the payment of two promissory notes due in six months, one for $1,500 and the other for $3,317. The intervener, M. C. Vierra, lived in the Lemas home and was employed by them in the dairy business. Vierra had knowledge of the first chattel mortgage. January 1, 1925, the owners of the cattle and dairy equipment executed a written contract agreeing to sell to Vierra ‘ one-half interest in the said dairy business and personal property’, which, it is conceded, are the same business and property involved in this action. The contract provided for payment of the purchase price of $3,500 in instalments ‘on or before the 1st day of January, 1929’. The entire purchase price of the property was fully paid prior to 1928. The original chattel mortgage was never foreclosed. January 20, 1928, Mr. and Mrs. Lemas executed to the plaintiff, Schwartzler, a chattel mortgage on the same dairy cattle and equipment which were involved in the first transaction to renew the promissory note for $3,317, which was included in the first mortgage. This note became due in two years from