Bush v. Bank of America National Trust & Savings Ass'n

THOMPSON, J. This is an appeal from a judgment which was rendered against the plaintiffs in an action for the alleged conversion of two automobiles. It is claimed the defendant’s mortgage on the machines is void for failure to record it with the department of motor vehicles as required by section 45% of the California Vehicle Act.

It appears without conflict of evidence that on February 21, 1932, T. S. and Homer S. Pendergrass executed and delivered to the defendant their chattel mortgage on certain personal property, including the two automobiles which are involved in this suit, to secure the payment of a debt of $30,000 which the mortgagors owed to the banking association. This mortgage conformed to the provisions of section 2957 of the Civil Code. It was promptly recorded in the office of the county recorder of Stanislaus County. But it was not recorded with the department of motor vehicles of the state of California as required by section 45% of the California Vehicle Act. It is conceded the plaintiffs examined this mortgage as it was disclosed by the public record thereof, and knew of its existence and purport. For failure to pay the debt pursuant to the terms of the mortgage the bank took-possession of the automobiles and sold them on foreclosure of the mortgage, applying the proceeds therefrom to the satisfaction of the debt.

After the plaintiffs secured actual knowledge of the defendant’s mortgage, for value received, T. S. and Homer S. Pendergrass executed and delivered to them their promissory note for $5,000, together with their chattel mortgage on [590]the two automobiles hereinbefore mentioned. This second chattel mortgage conforms to the provisions of section 2957 of the Civil Code, and it was duly recorded. The plaintiffs also promptly filed with the department of motor vehicles, as required by section 45% of the California Vehicle Act, a certified copy of their chattel mortgage.

After the defendant’s foreclosure and sale of the automobiles, plaintiffs demanded payment of the value of the machines on the theory that the defendant’s chattel mortgage was void for failure to conform to the provisions of section 45% of the California Vehicle Act. The demand for payment was refused. This suit for conversion was then instituted. The cause was tried by the court sitting without a jury. Findings were adopted by the court favorable to the defendant. A judgment was rendered accordingly. From that judgment the plaintiffs have appealed.