Karrell v. First Thrift of Los Angeles

California Court of Appeal Jun 1, 1951 No. Civ. 18284Published

Before: McCOMB

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Holding. The court held that a trustee's sale was valid and that the purchaser was a bona fide purchaser for value without notice, thereby precluding the original owner from quieting title against him. Consequently, the municipal court properly exercised jurisdiction over the resulting unlawful detainer action.

Issues

Did the original trust deed properly incorporate by reference provisions of the previously recorded master deed of trust?
Were there any irregularities in the sale which vitiated it?
Was the purchaser a bona fide purchaser for value without notice?
Did the municipal court have jurisdiction to entertain the unlawful detainer action?

Disposition. reversed

Quotations verified verbatim against the opinion

“In the absence of fraud which is not here claimed such recital is conclusive pursuant to section 2924b of the Civil Code”

“Therefore he was a bona fide purchaser for value without notice and as such was not chargeable with the fraud of his predecessor”

“The judgment is reversed with directions to the trial court to enter a judgment quieting title in the property in question in defendant Howard M. Kessler.”

McCOMB, J.

This action was instituted by plaintiff against three separately appearing defendants: First Thrift of Los Angeles (hereinafter called First Thrift); Great Western Title Company (hereinafter called Great Western); and Howard M. Kessler (hereinafter called Kessler).

The action sought declaratory relief and an injunction.

Facts:

On January 21, 1948, plaintiff executed and delivered her promissory note in favor of First Thrift in the amount of $1,450. At the same time she executed and delivered a deed of trust to secure the note by the terms of which trust deed Great Western was named trustee and First Thrift beneficiary. This trust deed was duly recorded and by reference certain provisions contained in paragraphs A and B of another deed of trust recorded in the county of Los Angeles were incorporated. This latter deed of trust will be hereinafter referred to as the “master deed of trust.”

Thereafter plaintiff became in default in payment of the note and deed of trust. A notice of default and an election to sell was executed by First Thrift and duly recorded on January 20, 1949. A copy of the notice of default was sent by registered mail to plaintiff to the address supplied by - her in the trust deed. However it was not received by her but was returned to the sender.

A copy of the notice of sale was posted on the front door of the property which was to be sold and this notice plaintiff found. The property was noticed for sale on May 16, 1949, which was thereafter continued until 10 a. m. June 1, 1949.

Plaintiff and First Thrift agreed that in consideration of the payment of $700 to First Thrift by plaintiff, the time for payment of the remaining balance of principal, interest and costs was to be extended to and including June 1, 1949, and that no sale of the property would be made if such payments took place on or before June 1, 1949.

The property was in fact sold on June 1, 1949, at 10 a.m. to Kessler for the sum of $925, and thereafter Great Western executed and delivered to Kessler a trustee’s deed to the property. Kessler was not acquainted with any of the officers of Great Western or with any of the personnel of First Thrift. He originally learned of the proposed sale either by seeing

[538]

Karrell v. First Thrift of Los Angeles

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