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Freedland v. Greco

California Supreme Court
45 Cal. 2d 462 (1955)

Written by Daniel Clark, JD

Facts

Morton Freedland (plaintiff) sold his liquor business to Domenick Greco (defendant). Greco paid the purchase price partially in cash and the remaining $7,000 with two promissory notes. The notes had face values of $7,000 each, but Freedland and Greco understood the notes together to comprise a single $7,000 debt. One note was secured by a chattel mortgage on the business’s equipment. The other note was secured by a deed of trust on unrelated real property owned by Greco. Greco defaulted on the notes. Freedland held a nonjudicial foreclosure sale of the real property, but the proceeds totaled only a few hundred dollars. Freedland then filed an action to hold a judicial sale of the equipment under the chattel mortgage and to receive a judgment for any remaining deficiency. The court held the sale, generating a few hundred more dollars, and granted Freedland a deficiency judgment of $6,671. Greco appealed.

Rule of Law

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Holding and Reasoning (Carter, J.)

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