Streiff v. Darlington

EDMONDS, J.

The appellants, in a complaint to recover a deficiency upon a note originally secured by a deed of trust, pleaded facts which were challenged by a demurrer on both general and special grounds. The demurrer was sustained with leave to amend. Choosing to stand upon their complaint, the appellants continue to urge its sufficiency upon their appeal from the judgment against them subsequently entered.

The complaint alleges these facts: Appellants were the payees of a note made by the respondents under date of July 20, 1929, for the principal sum of $20,000. This note was due two years after date and was secured by a deed of trust junior to a deed of trust to secure a note for $23,000 made by one Jose in favor of West Coast Life Insurance Co. The respondents paid the interest on their note in favor of appellants but defaulted in the payment of principal and interest on the Jose note. Foreclosure of the Jose deed of trust being threatened, the appellants “as the owners and holders of said promissory note, and of said trust deed securing the same, so executed by the said F. G. Darlington and Anna Darlington, his wife, declared that a default had been made, as aforesaid; and thereupon . . . recorded . . . due notice of defendants’ default and breach, and of plaintiffs’ election

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to sell the premises ... in accordance with the terms of said trust deed so executed and delivered by said F. G. Darlington and Anna Darlington, his wife, to satisfy said obligations so executed and delivered by said Edward Jose to said West Coast Life Insurance Company. ’ ’ On June 29, 1931, following the notice of default and after notice of sale the property was sold by the trustee. No part of the principal of the note was paid by the respondents except “the net sum of $10,000.00" bid by the appellants “as the purchase price of said premises." On the back of the Darlington note appears an endorsement dated June 29, 1931, and signed by the trustee, which recites: “Received $10,000.00 net, and balance of $23,000.00 applied to pay first lien of West Coast Life Insurance Company, a corporation, total bid $33,000.00 for whole property clear and free of all incumbrances.” As an “addenda” to this endorsement there is the following signed by the trustee: “Balance due on this note is the sum of $10,000.00 plus accrued and unpaid interest, costs and expenses of this sale, plus accrued unpaid interest on West Coast Life Insurance Company first lien, plus costs and expenses accrued to date of redemption therefrom. ’ ’