Pacific States Savings & Loan Co. v. North American Bond & Mortgage Co.

SPENCE, J.

Plaintiff purchased certain real property at a sale conducted by Pacific Auxiliary Corporation as the

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substituted trustee under a deed of trust. It brought this action to quiet title against the defendant corporation, which was the original trustee under said deed of trust. The claim of the defendant was based solely upon its alleged interest as such trustee. The trial court entered judgment denying any relief to plaintiff and adjudging that title to said real property was vested in defendant as such trustee. Plaintiff appeals from said judgment.

The cause was tried upon stipulated facts. The plaintiff corporation and Olga Rupp were respectively the successor in interest of the original lender and the successor in interest of the original trustor. Said deed of trust did not contain the provision frequently found in such deeds of trust permitting the lender alone to substitute a new trustee. After the enactment in 1935 of section 2934a of the Civil Code, plaintiff and said Olga Rupp jointly executed and recorded a document entitled “Substitution of Trustee” and complied with all the requirements of that section for the purpose of substituting Pacific States Auxiliary Corporation as trustee under said deed of trust. Said substituted trustee conducted the sale thereunder and plaintiff became the purchaser. Thereafter said substituted trustee executed and delivered to plaintiff a trustee’s deed to the property.

The sole question presented is that of the validity of said substitution. It will be noted that the above-mentioned “Substitution of Trustee” was not executed solely by the successor of the lender but was executed by both the successor of the trustor and the successor of the lender. It will be further noted that the original trustee is the only one challenging the validity of said substitution.

The trial court stated in its findings of fact and conclusions of law that it found said substitution invalid first, because said section 2934a applied only to deeds of trust “conferring no other duties upon the trustee than those which are incidental to the power of sale therein conferred”, whereas the deed of trust here “conferred another duty, to wit: the duty of reeonveying the property when the note . . . was paid”; and second, because said section became effective after the execution of said deed of trust and was intended only to affect deeds of trust subsequently executed; and third, because if given retroactive effect, it “would