Hill v. Gibraltar Sav. & Loan Ass'n of Beverly Hills

JEFFERSON, J.

This suit concerns the manner in which a sale of realty was conducted by a trustee under a power of sale in a deed of trust.

Plaintiffs husband and wife, holders of a note secured by a second deed of trust, filed a complaint for damages against Gibraltar Savings and Loan Association of Beverly Hills (hereafter “Gibraltar”), the holder of the first deed of trust, and against Security Allied Services (hereafter “Security”), its trustee, based on alleged irregularities in the conduct of a trustee sale which extinguished plaintiff’s security interest. At the trial plaintiffs stipulated to a judgment in favor of Gibraltar and proceeded against Security alone. From a judgment in favor of Security, plaintiffs bring this appeal.

No real dispute exists as to the material facts. On March 22, 1962, Gibraltar, as beneficiary under the first deed of trust, caused to be recorded a notice of default and election to sell the subject property. As trustee, Security duly published this notice. On March 30, 1962, plaintiffs received a copy of the

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notice and, on July 17, 1962, they received written notice that the trustee’s sale was to be held on August 10, 1962. Stated in the notice was the fact that, as provided in the deed of trust, the property was to be sold “to the highest bidder for cash payable at the time of sale. ’ ’

The sale was held as scheduled at 11 a.m. on August 10, 1962. Plaintiff David Hill and his attorney were present. The auctioneer, an officer of Security, commenced the sale. Gibraltar, through its representatives, made an opening bid of $20,955.38, which was the amount due under its note secured by the first trust deed, including costs. At this point, Mr. Siegal, a third party previously unknown to either plaintiffs or defendants, bid $21,000 and qualified the bid by showing a cashier’s check in his hands in excess of the amount bid. Thereafter, plaintiff bid the sum of $22,000, but when the auctioneer asked him to show cash or a cashier's check in that amount, he produced a cashier’s check in the amount of only $20,955.38. The auctioneer refused to accept the bid stating that he had not properly qualified it. Plaintiff then informed the auctioneer that he held a second trust deed on the property and asked that the sale be postponed for a “couple of hours’’ in order to give him time to secure the additional amount required to qualify his bid. Siegal demanded that Security go ahead with the sale. No other bidders were present. After consulting with a representative of Gibraltar, who asked that the auctioneer proceed with the sale, the auctioneer refused plaintiff’s request for a postponement and sold the property to Siegal for the sum of $21,000.