Paramount Savings & Loan Ass'n v. Barber

CONLEY, P. J.

This litigation tests the implementation and effect of section 580b of the Code of Civil Procedure relative to the protection from deficiency judgment of a

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person who gives a deed of trust as security for a loan as part of the purchase price.

On March 8, 1963, the Currans, husband and wife, executed to the Paramount Savings and Loan Association for a loan of $10,100, a promissory note and deed of trust by which they conveyed a lot to the Kern County Title Company, as trustee. In the present suit the Kern Financial Corporation was sued as a substitute trustee in place of Transameriea Title Insurance Company, which was immediate successor to Kern County Title. The Currans did not live in the house which was constructed on the lot, nor intend to do so.

On March 18, 1963, the Currans conveyed the lot by grant deed to Wayne Reeder, Inc. On April 2, 1963, Wayne Reeder, Inc., through its president, Wayne Reeder, assumed the agreement to pay the promissory note above mentioned and on April 3d of the same year Wayne Reeder, Inc., by a grant deed, conveyed the property to Fairview Construction Corp., and the latter corporation, by its president, Wayne Reeder, in turn assumed the obligations under the promissory note. On April 29, 1963, Fairview Construction Corp. deeded the property to Olen J. Hughes and Amie Hughes, who assumed the obligations under the note; by grant deed on December 15, 1964, the Hughes’s conveyed the property to defendant Gary R. Barber. Mr. Barber executed an assumption agreement on December 24, 1964, obligating himself under the terms of the original promissory note, and promising to perform the agreement contained in the deed of trust; at the time of the suit defendant Barber was the record owner of the property subject to the deed of trust. By the terms of the note defendant Barber and his predecessors promised to pay plaintiff monthly installments of $69, principal and interest, on the 1st day of each month beginning April 1, 1963; defendant Barber did not make the payments due on January 1, 1966, or thereafter.

Plaintiff filed a foreclosure action and also sued for a deficiency judgment, claiming that Barber was personally liable for payment of the balance of the sum owed. After the trial, the judge awarded a decree of foreclosure and also ordered that defendant Barber was personally liable for the payment of the debt secured by the deed of trust, and that if the money arising from the foreclosure sale was insufficient to pay the amount found due, plus attorneys’ fees, interest, and costs of sale, a deficiency judgment was awarded against the defendant Barber.