Eastland Sav. & Loan Ass'n v. Thornhill & Bruce, Inc.

MeCABE, P. J.

—Defendant Bruce leased a tract of 12 parcels of unimproved property in the City of Orange. He obtained a construction loan from plaintiff in the amount of approximately $405,000 ($33,800 per parcel) for the purpose of constructing apartment buildings on the leased property. Bruce executed trust deeds in favor of plaintiff as beneficiary, securing a promissory note on each parcel. The trust deeds contained provisions giving plaintiff, as additional security, the right to collect rents and also conferring upon plaintiff a power of sale.

Defendant Bruce assigned the leasehold to Thelma P. Mathewson, subject to plaintiff’s encumbrance. Thelma P. Mathewson assigned the leasehold to Del Mar Mortgage, subject to plaintiff’s encumbrance. The present dispute concerns plaintiff and Del Mar Mortgage, joined as a defendant in the action against defendant Bruce.

On August 15, 1965, Del Mar defaulted in monthly payments due on the promissory notes. In order to preserve its interest in the property, plaintiff advanced Del Mar approximately $24,000 ($2,000 per parcel) to pay rent, taxes and insurance. Del Mar executed additional promissory notes covering plaintiff’s advances, which notes were secured by trust deed. Del Mar defaulted on these later notes by failing to pay the first installment on October 1, 1965. Del Mar continued to default on the original notes.

On December 14, 1965, plaintiff filed an action of foreclosure and for specific performance under the trust deeds. Concurrently plaintiff requested appointment of a receiver to collect rents and profits. A receiver was appointed, took immediate possession and proceeded to manage the property and collect rents pending judicial determination of plaintiff’s suit.

On April 20, 1966, prior to judicial determination of the action, plaintiff caused the property to be sold under the power of sale conferred by the trust deeds. Plaintiff purchased the property, as sols bidder, for the sum of $426,484.94; said sum included unpaid principal on each note, interest due, advances made by plaintiff to Del Mar and costs of sale.

After the sale,

on April 22 1966, the receiver filed with the court his final accounting, showing a net balance from rents

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