Goodman v. Morthrift Finance Corp.

STURTEVANT, J. —The plaintiff brought this action to recover damages for the alleged wrongful conversion of a certain motor boat. The trial court rendered a judgment in favor of the plaintiff and the defendant Morthrift Finance Corporation, Ltd., a corporation, has appealed.

For some time prior to the 6th day of May, 1937, C. C. Cumby was engaged in the business of buying and selling used automobiles. From time to time he discounted the sales contracts with Morthrift Finance Corporation, Ltd., a corporation. Prior to the 6th day of May, 1937, Cumby had so sold and financed a large number of automobiles. In general the sales were made under contracts which provided that the deferred payments should be made in monthly instalments in from twelve to twenty-four months. There was approximately the sum of $12,000 owing to defendant upon said promissory notes secured by mortgages payable in monthly instalments but no one of said notes was in default. However, as to seven automobiles, deferred payments in the sum of $3,000 had been collected by Cumby and not accounted for. In the early part of May, Cumby made payments on the last-mentioned sum and certain of the automobiles were repossessed by the defendant. In this manner the said sum of $3,000 was fully accounted for.

On May 6, 1937, Cumby met with Mr. Beck, the president of the defendant corporation, and discussed a possible settlement of the alleged misappropriations by Cumby. Prior to that date Cumby had paid defendant certain sums on the above-mentioned $3,000. He promised to pay the balance, an additional amount in the sum of $1,000. As a part of the same transaction and conversation Cumby executed and delivered to the defendant a “Pledge to secure payment of indebtedness.” That document is as follows:

“In consideration of any financial accommodations given, or to be given, I have this day deposited with the Morthrift Finance Corporation, Ltd., a California corporation, the following articles of personal property, to wit: One 19 foot 6 inch Krem Kraft built power boat, powered by one 12 cylinder Lincoln-Zephyr motor, Engine No. 68-7222, together with all accessories and appurtenances thereto, and one automobile boat trailer with two axle cradle, by way of pledge to secure the payment of any indebtedness now due or hereafter to become due from me to the said Morthrift Finance Corporation, [75]Ltd., and in the event all indebtedness owed by me is not paid to said Corporation within ten (10) days from date hereof, I authorize the said pledgee to sell said pledge at any time without notice to me or to the public, at public or private sale, as said Corporation may elect and without any previous demand or notice whatsoever, and out of the proceeds of said sale said pledgee is authorized to reimburse itself for all costs and expenses of making the sale, all sums due, and in the event there shall be a balance then remaining to pay same over to me.