CASTLE v. SCHULMAN

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District Court of Appeal, Second District, Division 2, California.

CASTLE v. SCHULMAN et al.

Civ. 16062.

Decided: October 15, 1947

Ernest A. Oswald, of Los Angeles, for appellant. Max Bergman and Leo Goodman, both of Los Angeles, for respondent Schulman.

Plaintiff appeals from an order granting a motion for a new trial in an action to quiet title to certain real property after judgment had been ordered for plaintiff.

These are the undisputed facts:

Plaintiff and his wife are vested with title to a parcel of real estate through a commissioner's deed issued to them upon the completion of a court foreclosure of a defaulted street improvement bond.

Defendant Schulman is the owner of a certificate of sale issued by a city treasurer upon the foreclosure of another street improvement bond on the same property which was issued subsequently to the bond which is the basis of plaintiff's title. The owner or holder of the street improvement bond upon which defendant bases his claim to an interest in the property was not named or brought in as a party to the foreclosure action through which plaintiff obtained a commissioner's deed.

Plaintiff instituted the present action to quiet his title against defendant's subsequently issued bond and junior lien against the property.

This is the sole question for our determination:

Does the foreclosure and sale through court proceedings of property under a defaulted street improvement bond, which is a prior lien on the property, automatically eliminate a junior lien of another street improvement bond on the same property, although the holder of the junior bond is not made a party to the foreclosure action?

This question must be answered in the negative. The lien of a junior bond is not eliminated by the foreclosure through court proceedings of a senior bond when the holder or owner of the junior bond is not made a party to the foreclosure proceedings. (Wood v. Brady, 68 Cal. 78, 79, 5 P. 623, 8 P. 599. See also, Lee v. Silva, 197 Cal. 364, 369, 240 P. 1015; Wemple v. Yosemite Gold Min. Co., 4 Cal.App. 78, 86, 87 P. 280; Fox v. California Title Ins. Co., 120 Cal.App. 264, 266, 7 P.2d 722.)

Plaintiff argues that the foreclosure through court action of a street improvement bond eliminates junior liens, even though the owner or holder of the bond which creates the junior lien is not made a party to the action, because the holder of the street bond could have had the city treasurer, through appropriate proceedings pursuant to the provisions of sections 6500 et seq., of the Streets and Highways Code, foreclose the bond without making the holder or owner of the junior bond a party.

There is no merit in this contention for the reason that if a bond is foreclosed by a city treasurer, the treasurer is required to publish a notice of the sale of the property covered by the bond in a newspaper of general circulation in the city in which the bond was issued. (See. 6503, Streets and Highways Code.) This notice constitutes due process of law and binds the owners and holders of junior bonds.

In the present case plaintiff is attempting to eliminate the lien of the junior bond holder without giving him any notice. Hence the proceeding does not constitute due process of law so far as the junior bond holder is concerned unless he is made a party to the foreclosure action. Since defendant was not made a party to the foreclosure action, his claim was not eliminated by the foreclosure instituted by plaintiff and the trial judge properly granted a motion for a new trial after judgment had been ordered in favor of plaintiff in the present quiet title action.

The order granting a new trial is affirmed.

McCOMB, Justice.

MOORE, P.J., and WILSON, J., concur.