Carpenter v. Hamilton

McCOMB, J.

Plaintiffs appeal from a judgment in favor of defendants, predicated upon the sustaining of a demurrer to plaintiffs’ complaint without leave to amend, in an equitable action to set aside a judgment of the superior court decreeing foreclosure of a trust deed as a mortgage, and ordering sale of the property described in the trust deed for the purpose of satisfying the amount due on the note for which the trust deed was given as security. The basis of the complaint is alleged fraud upon the part of defendants.

Plaintiffs also urge that it was error for the trial court to refuse them leave to file a proposed amended complaint.

The essential allegations of the complaint and the proposed amended complaint which are well pleaded

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are that:

(a) Plaintiffs executed a trust deed as security for a promissory note payable to defendant Archibald J. Hamilton, which trust deed was foreclosed as a mortgage pursuant to the requirements of section 725a of the Code of Civil Procedure. (See

Hamilton

v.

Carpenter,

15 Cal.2d 130 [98 P.2d 1027].)

(b) Defendant Title Insurance and Trust Company was named as trustee in the trust deed mentioned in paragraph (a).

(c) Prior to the filing of the foreclosure action mentioned in paragraph (a), defendant Hamilton had deposited the note and trust deed above referred to with defendant trustee together with a written declaration of default and a demand for the sale of the property described in the trust deed pursuant to the terms thereof.

[148]

(d) Pursuant to the demand of defendant Hamilton, defendant trustee recorded in the office of the County Recorder of Los Angeles County a notice of default and election to sell the property described in the trust deed pursuant to the power of sale contained therein.

(e) After electing to have the trustee proceed under the terms of the trust deed, defendant Hamilton cancelled the notice of default and election to sell the property described in the trust deed. Defendant trustee did not mail to plaintiffs a copy of the notice of default defendant Hamilton had elected to declare, but instead, returned the note and deed of trust to defendant Hamilton, who thereafter instituted the foreclosure action mentioned in paragraph (a).