BROWN v. JENSEN

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

BROWN v. JENSEN.*

Civ. 19201.

Decided: December 05, 1952

Ned P. Eads, Sherman Oaks, for appellant. Bertram S. Harris, Los Angeles, for respondent.

This appeal is from a judgment in favor of plaintiff after trial before the court without a jury in an action to recover the amount due on a promissory note.

Facts: On April 26, 1950, defendant and Leota I. Triplett purchased from plaintiff a parcel of real property situated in the county of Los Angeles. As part of the purchase price defendant and Leota Triplett executed a promissory note in favor of Glendale Federal Savings and Loan Association in the sum of $11,300. As security therefor they signed a first deed of trust naming the savings and loan association as beneficiary. At the same time, and as a part of the purchase price, they signed a promissory note in favor of plaintiff, the vendor of the property, in the sum of $7,200 with interest at the rate of 5er annum from the date of the note, the principal payable monthly in instalments of $72.00 each on the 15th day of each month beginning June 15, 1950, plus interest. The note also provided for the payment of a reasonable attorney's fee should suit be commenced to enforce payment thereof. As security for this note they signed a second deed of trust upon the property with plaintiff as beneficiary.

On September 15, 1950, plaintiff signed a promissory note in favor of Morris and Rae Comess in the sum of $2,075 with interest at the rate of 10er annum, payable on or about May 15, 1951. As security for this note plaintiff assigned the above mentioned promissory note in the sum of $7,200 to the Comesses, together with the deed of trust securing it.

No payments were made by defendant or Leota Triplett on account of either promissory note which they had executed, and on November 10, 1950, the Comesses as assignees of the second deed of trust caused notice to be given of default and election to sell the real property under the second deed of trust.

On December 14, 1950, Glendale Federal Savings and Loan Association caused to be given notice of default and election to sell the real property under the first deed of trust.

On April 9, 1951, the real property was sold under a foreclosure of the first deed of trust and the beneficiary purchased the property for the sum of $11,896.63. As a result of this sale the second deed of trust became valueless as security for the note in the sum of $7,200.

Thereafter plaintiff instituted the present action to collect the amount due on the promissory note signed by defendant.

Question: Is the holder of a note which has been secured by a purchase money second deed of trust barred from bringing action on the note after the security becomes valueless by reason of the sale of the security by the holder of the purchase money first deed of trust?

No. This identical question was before the court in Hillen v. Soule, 7 Cal.App.2d 45, 45 P.2d 349, and answered contrary to defendant's contention.

Section 580b of the Code of Civil Procedure reads in part as follows:

‘No deficiency judgment shall lie in any event after any sale of real property for failure of the purchaser to complete his contract of sale, or under a deed of trust, or mortgage, given to secure payment of the balance of the purchase price of real property. * * *’

In answering the contention which defendant here makes, that the foregoing provision of the Code of Civil Procedure barred plaintiff's cause of action, the court in Hillen v. Soule, supra, 7 Cal.App.2d at page 47, 45 P.2d at page 349 said:

‘Appellant first contends that this is an action for a deficiency judgment after a sale under a deed of trust given to secure the balance of the purchase price of real property, and that such action cannot be maintained by reason of the provisions of section 580b of the Code of Civil Procedure. It is a sufficient answer to state that this is not an action for a deficiency judgment. The security was exhausted by the sale under the first deed of trust and no sale was had under respondent's deed of trust. We are therefore of the opinion that the provisions of said section are inapplicable.’

Affirmed.

McCOMB, Justice.

MOORE, P. J., and FOX, J., concur.