Hamaker v. Williams

[257]

BARNARD, P. J.

This is an action for a deficiency on a note after the sale of property under a trust deed. The findings and judgment were in favor of the defendant and the plaintiff has appealed.

The note was payable “on or before” November 30, 1931, and contained the usual acceleration clause providing that on a default in the payment of interest the entire amount of principal and interest should become due and payable a.t the option of the holder. The note was secured by a deed of trust, which was subject to a prior deed of trust securing another note. On September 25, 1931, the interest being delinquent, the holder of the note executed and recorded a declaration of default and election to act under the power of sale, and ordered the trustee to sell the property. The sale took place on February 26, 1932, the property bringing but a small part of the amount due. This action to recover the balance was brought on November 15, 1935, more than four years after the election to declare the entire amount due but less than four years after the maturity date named in the note. The only question raised is whether the statute of limitations commenced to run from the time the declaration of default was filed or from a later date.

The appellant’s position is that since no action could be maintained until the security had been exhausted

(Bank of Italy etc. Assn.

v.

Bentley,

217 Cal. 644 [20 Pac. (2d) 940, 941]) a suit could not have been filed between the time when default was declared and the date of maturity named in the note, and that the statute commenced to run at the latter date. If this reasoning were correct a suit could not have been started until after the sale, which took place on February 26, 1932, and the period of limitation would begin at that time and not at the maturity date named in the note. It is well settled that the statute of limitations never runs against the power of sale in a deed of trust, that the title remains in the trustee until the debt is paid or the property sold, and that the power of sale may be enforced when otherwise the debt would be barred by the statute.