Bodden v. Community National Bank of Kern County

STONE, J.

Appellant bank appeals from an adverse judgment in a declaratory relief action holding that its deed of trust is unenforceable against respondent’s property by reason of a prior recorded homestead.

The property was first purchased by respondent and her former husband in 1958. They lived in the five-room house, described as “old,” located on the rear part of a single lot 142 feet 10 inches deep and 53 feet 6 inches wide. Respondent became the sole owner of the property upon her husband’s death in 1960. During the year 1961 she married Daniel Bod-den, and they resided in the five-room house for approximately a year during construction of a new home in front of the old house. Construction funds were obtained from First Federal Savings & Loan Association, which required respondent to execute a grant deed to herself and Daniel Bod-den as joint tenants. This was done on July 24, 1961. The loan was evidenced by a note secured by a deed of trust executed by both respondent and Bodden on August 8, 1961. After moving into the new house, they rented the old one on the back of the lot to friends. It remained rented up to the time of trial.

' Respondent and Bodden recorded a declaration of homestead covering the entire parcel of real property, on May 2,

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1962, asserting there were two houses located on the property and that the value of the entire premises was $12,500.

During 1961 and 1962, Mr. Bodden, without his wife’s knowledge, obtained loans from appellant bank for his use in the operation of a dress shop in the City of Bakersfield. The loans were evidenced by promissory notes signed by him alone; when he failed to meet his payments, the bank required him to secure the unpaid balance of $5,128.31 by executing a deed of trust covering the homesteaded property. It is this deed of trust, recorded on March 22, 1963, that appellant seeks to enforce. Shortly after the declaration of homestead was filed and before he executed the deed of trust, Bodden brought divorce proceedings against respondent.

Eventually Bodden defaulted, and the bank commenced proceedings to sell the property under the terms of the deed of trust. Respondent learned for the first time of the second deed of trust through a notice of default and election to sell that was tacked on her door. She sought the advice of her lawyer immediately upon learning the facts, and this declaratory relief action followed.