Fleisher v. Continental Auxiliary Co.

AGEE, J.

Plaintiff appeals from a judgment of dismissal which was rendered after he elected not to amend his complaint, following the sustaining of a general demurrer thereto. The complaint alleged facts which are summarized as follows:

On April 22, 1960, plaintiff executed and delivered to the Bank of America his promissory note for $13,133.19, and as security therefor, he executed a deed of trust upon real property which he owned, and which was valued in excess of $15,-000. Defendant was named trustee.

On April 27, 1960, plaintiff deeded the real property to one Hansen, Jr. subject to the deed of trust. On October 24, 1960, Hansen, Jr. conveyed the property to Hansen Pacific Corporation, subject to the deed of trust. On November 10,

1960,

approximately two weeks later, the corporation was adjudged a bankrupt and its assets were sold in the ensuing bankruptcy proceedings.

On May 27, 1960, just one month after plaintiff had conveyed to Hansen, defendant had executed and delivered to the beneficiary of the trust deed (the bank) a reconveyance of the deed of trust. Defendant executed the reconveyance at the express written request of the bank. It did so with no evidence that the note had been paid; in fact, the note at the time was fully unpaid.

By reason of the reconveyance and the bankruptcy sale, the property became lost as security for the payment of the original note. Plaintiff learned of the reconveyance and the subsequent events on December 16, 1960, at which time the bank called upon him for payment of the note. He then paid the bank $3,706.94 in cash and executed a new note for $10,000 as payment of principal and interest on the original note.

[138]

The gravamen of plaintiff’s cause of action is stated in paragraph X of his complaint: “That said Deed of Reconveyance was executed and delivered by defendant to Bank of America, National Trust and Savings Association

in violation of its trust as Trustee,

under said Deed of Trust,