Seaboard Finance Co. v. Carter

236 P.2d 27, 106 Cal. App. 2d 738, 1951 Cal. App. LEXIS 1822
CourtCalifornia Court of Appeal
DecidedOctober 11, 1951
DocketCiv. No. 18536
StatusPublished

This text of 236 P.2d 27 (Seaboard Finance Co. v. Carter) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Seaboard Finance Co. v. Carter, 236 P.2d 27, 106 Cal. App. 2d 738, 1951 Cal. App. LEXIS 1822 (Cal. Ct. App. 1951).

Opinion

MOORE, P. J.

Respondent sued to recover a deficiency remaining after the sale of movables made pursuant to a chattel mortgage.

On March 11, 1946, respondent loaned appellant $15,658 on a note and chattel mortgage to pay the balance of the purchase price of four vehicles, to wit, a CMC truck and Weber trailer and a Sterling truck and a Fruehauf trailer. They were acquired for the partnership of Carter and Spurgeon which had theretofore engaged in the fishing business. Carter made the down payment of $4,700 and alone executed the note and the mortgage. By agreement they were to share the profits equally in their new enterprise of transporting goods for hire. On July 2, 1946, there was a default in the payments on the note. Demand was made for possession of the chattels as provided by the mortgage. Thereupon Mr. Spurgeon, without objection on the part of appellant, voluntarily delivered the mortgaged chattels to respondent. The [740]*740latter promptly forwarded to appellant a notice in writing that unless all sums due under the note be paid, it would sell the chattels on or after five days following the notice. That document was received by appellant. However, no sale was made for over a year for reasons about to be related.

Within a week after the vehicles were delivered to respondent, appellant filed action No. 516539 to recover moneys paid, damages, and for cancellation of the note and mortgage on the ground of fraud in their procurement, and for injunction against respondent’s foreclosing the mortgage or exercising the power of sale. He procured a restraining order against such sale which was not dissolved until February, 1947. The sale of the vehicles took place July 2, 1947, exactly one year after they came into respondent’s possession. At the foreclosure sale the sum of $10,000 was received for all four vehicles. During that period the chattels were kept on vacant lots and at all times prior to the sale their whereabouts were known to appellant.

In the meantime the judgment on his action, No. 516539, had gone against Carter and he had appealed. The Supreme Court annulled the mortgage insofar as it affected the Sterling truck and Fruehauf trailer by reason of respondent’s failure to comply with sections 2981 and 2982 of the Civil Code relating to conditional sales but affirmed the validity of the mortgage lien on the CMC and Weber vehicles. All other demands of Carter were rejected and the court ordered the trial court “to determine the sums due to the plaintiff on the unenforceable portion of the contract relating to the Sterling and Fruehauf vehicles and enter judgment accordingly.” (Carter v. Seaboard Finance Co., 33 Cal.2d 564, 588 [203 P.2d 758].) Pursuant to such directive further proceedings were had in the court below and judgment was entered in action No 516539 in favor of Carter for 22/45 of the amount loaned on the mortgage, to wit, the sum of $4,314.20. Immediately following the award of such judgment, the same court tried the instant action for the deficiency claimed and held that the loan as to the CMC truck and Weber trailer was valid and awarded respondent $5,034.65. That judgment was credited with the amount recovered by appellant in action No. 516539 leaving respondent’s net recovery $570.75.

The court made findings that appellant did not pay as provided by the note; that his partner without objection delivered the truck and trailer to respondent; that on July 2, 1947, the truck and trailer, having been continually advertised, and in[741]*741spected by prospective purchasers, was sold by respondent for $5,000, the reasonable market value thereof; that after crediting that sum to the balance of principal and interest due on appellant’s obligation there remained a deficiency balance due from defendant to plaintiff on July 2, 1947.

Appellant now demands that such judgment .be reversed and that he be awarded the full value of the last above mentioned truck and trailer. He grounds his contention upon the asserted insufficiency of the notice of sale.

Notice op Sale is Res Judicata

The issue of insufficiency of the notice of sale is not a legal basis for reversal. It was adjudicated in action No. 516539. Appellant made no allegation in his several pleadings there with respect to the notice save and except the declaration that “defendant notified plaintiff that it intends to sell said trucks on or after five days following the third day of July 1946."1 The vices, if any, of the notice of sale were known to appellant when he filed his action to enjoin the sale of the vehicles. While he alleged then that notice had been given of the intended sale he evidently chose not to make it a leading issue in a contest wherein he hoped to gain an annulment of the entire mortgage and note. But since a permanent injunction could have been obtained against the alleged sale, if appellant’s present contentions are sound, the judgment he obtained in action 516539 is an adjudication of the issue of the insufficiency of the notice of sale. (Sutphin v. Speik, 15 Cal.2d 195, [742]*742202 [99 P.2d 652, 101 P.2d 497].) Whatever grievance a litigant may have at the time he is involved in a legal contest must be included in his pleadings then. If he neglects or chooses not to do so the judgment entered will be deemed final as to such question as may have been a potential issue. (Ibid.)

The “notice of foreclosure” which was served on appellant on July 3, 1946, complied with the terms of the chattel mortgage which provided “upon a breach of the mortgage then the entire balance may be declared due and payable forthwith, and mortgagee . . . without previous notice or demand, may . . . take possession of the property according to law ... it may be sold at public or private sale, anytime not less than five days after notice is mailed . . . advising him said property has been repossessed and will be sold at a time and place designated in said notice. . . . The property need not be present at place of sale.”

Appellant contends that the deficiency sued for in the instant action could have been pleaded in appellant’s action No. 516539 and therefore the right to a deficiency is res judicata. By such contention appellant ignores the fact that judgment was entered on February 17,1947, in No. 516539, whereas respondent did not sell the vehicles until July. 3, 1947. Moreover, while appellant’s action No. 516539 was in the judicial process, after reversal by the Supreme Court, respondent filed a supplemental answer alleging the deficiency resulting from the sale of the chattels. This court (Division III) issued a writ of mandate requiring the superior court to disregard respondent’s counterclaim for a deficiency and to proceed as directed by the Supreme Court. (Carter v. Superior Court, 96 Cal.App.2d 388, 391 [215 P.2d 491].) Since it has been finally decided that respondent had no right to litigate its claim for a deficiency in action No. 516539, appellant’s asserted plea of res judicata with respect to the deficiency is without merit.

Appellant Waived Notice

If appellant had been entitled to any further notice than that which he admits was received, his behavior shows an intentional waiver thereof.

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Related

Carter v. Superior Court
215 P.2d 491 (California Court of Appeal, 1950)
Carter v. Seaboard Finance Co.
203 P.2d 758 (California Supreme Court, 1949)
Sutphin v. Speik
99 P.2d 652 (California Supreme Court, 1940)

Cite This Page — Counsel Stack

Bluebook (online)
236 P.2d 27, 106 Cal. App. 2d 738, 1951 Cal. App. LEXIS 1822, Counsel Stack Legal Research, https://law.counselstack.com/opinion/seaboard-finance-co-v-carter-calctapp-1951.